Preliminary Proxy Statement | ||||||||
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Definitive Proxy Statement | ||||||||
☐ | Definitive Additional Materials | |||||||
☐ | Soliciting Material under §240.14a-12 |
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BY ORDER OF THE BOARD | Registered Office | |||||||
3rd Floor 1 Ashley Road Altrincham Cheshire WA14 2DT United Kingdom | ||||||||
Ben Harber Company Secretary April | No. 12696098 |
Proposal | Description of Proposal | Board’s Recommendation | ||||||||||||
1. | Re-election of | FOR | ||||||||||||
Re-election of | FOR | |||||||||||||
3. | Re-election of | FOR | ||||||||||||
4. | ||||||||||||||
Re-appointment of PricewaterhouseCoopers LLP, an English limited liability partnership, as U.K. statutory auditors of the Company, to hold office until the conclusion of the next annual general meeting of shareholders | FOR | |||||||||||||
Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, | FOR | |||||||||||||
Authorization for the Audit and Risk Committee to determine the Company’s auditors’ remuneration for the fiscal year ending December 31, | FOR | |||||||||||||
Receipt of the U.K. statutory annual accounts and reports for the fiscal year ended December 31, | FOR | |||||||||||||
Receipt and approval on an advisory basis of the Company’s U.K. statutory directors’ annual report on remuneration for the year ended December 31, | FOR | |||||||||||||
9. | Approval of our U.K. directors’ remuneration policy, which, if approved, will take effect upon the conclusion of the Meeting, which is set forth as Part I of Annex A | FOR | ||||||||||||
10. | Advisory vote on the compensation of the Company’s named executive officers for the year ended December 31, | FOR | ||||||||||||
11. | Authorization for the Board of Directors to allot shares or to grant rights to subscribe for or convert any security into shares up to a maximum aggregate nominal amount of £820,100 | FOR | ||||||||||||
12. | Empowering the Board of Directors to allot equity securities for cash up to a maximum aggregate nominal amount of £820,100 pursuant to the authorization in Proposal No. 11 as if U.K. statutory pre-emption rights did not apply. | FOR | ||||||||||||
Fees | Fees | December 31, 2022 ( (1) “Audit Fees” consist of fees billed for the audit of our annual consolidated financial statements and statutory accounts. (2) “Audit-related” fees consist of fees in connection with the review of our interim consolidated financial statements. (3) “Tax Fees” consist of fees billed for tax planning advice in respect of intercompany arrangements and structuring in connection with both our initial public offering (“IPO”) and ongoing operations. (4) “All Other Fees” consist of non-audit fees paid to PwC for advisory services in relation to fundraising and registration statements filed with the SEC. The Audit and Risk Committee has determined that the rendering of non-audit services by PwC is compatible with maintaining the principal accountant’s independence. Pre-Approval Procedures The Audit and Risk Committee pre-approves all audit and permissible non-audit services provided by the independent registered certified public accounting firm unless an exception to such pre-approval exists under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or the rules of the SEC. These services may include audit services, audit-related services, tax services and other services. Our Audit and Risk Committee has pre-approved all services performed by the independent registered public accounting firm since the pre-approval policy was adopted prior to our initial public offering. REQUIRED VOTE The ratification of the selection of PwC as our independent registered public accounting firm requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. This vote is advisory and non-binding. Abstentions and broker non-votes, if any, RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, PROPOSAL Proposal 7 authorizes the Audit and Risk Committee to determine our auditors’ remuneration for the fiscal year ending December 31, The Audit and Risk Committee is directly responsible for the appointment, retention and termination, and for determining the compensation of the Company’s independent registered public accounting firm. The Audit and Risk Committee shall pre-approve all auditing services and the terms thereof and non-audit services (other than non-audit services prohibited under Section 10A(g) of the Exchange Act or the applicable rules of the SEC or the Public Company Accounting Oversight Board (“PCAOB”)), except that pre-approval is not required for the provision of non-audit services if the “de minimis” provisions of Section 10A(i)(1)(B) of the Exchange Act are satisfied. The Audit and Risk Committee may delegate to the chairperson of the Audit and Risk Committee the authority to grant pre-approvals for audit and non-audit services, provided such approvals are presented to the Audit and Risk Committee at its next scheduled meeting. All services provided by PwC during fiscal year REQUIRED VOTE The authorization of the Audit and Risk Committee to determine auditor remuneration requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” the authorization of our Audit and Risk Committee to determine our auditors’ remuneration for the fiscal year ending December 31, PROPOSAL At the Meeting, our Board will present our U.K. statutory annual accounts and reports for the period January 1, REQUIRED VOTE The receipt of the U.K. statutory annual accounts and reports requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” the resolution to receive our U.K. statutory annual accounts and reports. PROPOSAL Our U.K. statutory directors’ remuneration report is set forth as Annex A to this Proxy Statement. The directors’ remuneration report includes the annual report on remuneration. This document describes in detail our remuneration policies and procedures and explains how these policies and procedures help to achieve our compensation objectives with regard to our directors and the retention of high-quality directors. Our Board and our Compensation and Leadership Development Committee believe that the policies and procedures as articulated in the directors’ remuneration report are effective and that as a result of these policies and procedures we have and will continue to have high-quality directors. Our Board has approved and signed the report in accordance with English law. At the Meeting, the shareholders will vote on the annual report on remuneration. This vote is advisory and non-binding. Although non-binding, our Board and Compensation and Leadership Development Committee will review and consider the voting results when making future decisions regarding our director remuneration program. Following the Meeting, and as required under English law, the directors’ annual report on remuneration will be delivered to the U.K. Registrar of Companies. REQUIRED VOTE The approval of our U.K. statutory directors’ annual report on remuneration requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. This vote is advisory and non-binding. Abstentions and broker non-votes, if any, RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” approval of our U.K. statutory directors’ annual report on remuneration set forth in Annex A. PROPOSAL 9—APPROVAL OF OUR U.K. STATUTORY DIRECTORS' REMUNERATION POLICY Our U.K. statutory directors’ remuneration policy is set forth as Annex A to this proxy statement. Our directors’ remuneration policy is used to determine the remuneration for our directors, including our Chief Executive Officer (our sole executive director). The policy has as its key objective the engagement and retention of high-quality directors. The last approved remuneration policy was approved by the shareholders at our 2021 annual general meeting and the new remuneration policy is proposed for approval at this AGM, as required by the U.K. Companies Act 2006. As set forth in Annex A, we submit our new proposed remuneration policy, which our Board of Directors has determined is competitive and consistent with current market practices. The proposed policy is largely similar to our previously approved policy, but includes the following material changes. •The proposed policy sets the maximum annual bonus payable to an Executive Director to 100% of his or her annual base salary and provides that the bonus amount may be paid in cash or shares, at the Compensation and Leadership Development Committee's election. •The proposed policy provides that the maximum pension or retirement contribution, cash supplement (or combination thereof) payable by the Company shall be up to 5% of base salary, or such lesser percentage which is available to the general workforce. •The proposed policy includes compensation recovery provisions, which are designed to comply with the mandatory compensation “clawback” requirements under Nasdaq rules that became effective as of October 2, 2023. Under the policy, in the event of an accounting restatement, we will be required, subject to limited impracticability exceptions, to recover erroneously received incentive‑based compensation from our current or former executive officers representing the excess of the amount actually received over the amount that would have been received had the financial statements been correct in the first instance. 18 Our Board of Directors has approved the directors’ remuneration policy and believes it is effective to achieve its objectives. The directors’ remuneration policy, if approved, will take effect immediately upon conclusion of this Meeting and will remain valid until replaced by a new or amended policy (expected to occur at the 2027 annual general meeting of the Company). Further information about the policy is available at “Director Remuneration” and the policy is set forth as of Annex A to this proxy statement. REQUIRED VOTE The approval of our U.K. statutory directors’ remuneration policy requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, are not counted in the calculation of votes for or against this proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” approval of our U.K. statutory directors’ remuneration policy set forth in Annex A. 19 PROPOSAL 10—ADVISORY (NON-BINDING) VOTE TO APPROVE THE COMPANY’S EXECUTIVE COMPENSATION Section 14A of the Exchange Act requires that we provide our shareholders with the opportunity to vote to approve, on a non-binding, advisory basis, not less frequently than once every three years, the compensation of our named executive officers. Based on the voting results of the vote on the frequency of future votes on executive compensation at our 2022 Our compensation programs are designed to effectively align our executives’ interests with the interests of our shareholders by focusing on long-term equity incentives that correlate with the growth of sustainable long-term value for our shareholders. Shareholders are urged to read the section titled “Executive Compensation” in this Proxy Statement, which discusses our executive compensation policies and practices and contains tabular information and narrative discussion about the compensation of our named executive officers for the year ended December 31, The vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the compensation of our named executive officers, as described in this Proxy Statement in accordance with the compensation disclosure rules of the SEC. Accordingly, we are asking our shareholders to vote on the following resolution at the Meeting: RESOLVED, that the shareholders hereby approve, on a non-binding advisory basis, the compensation paid to the Company’s named executive officers, as disclosed in the Company’s Proxy Statement for the REQUIRED VOTE The approval of this advisory non-binding proposal requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, The vote is advisory, which means that the vote is not binding on the Company, our Board or our Compensation and Leadership Development Committee. To the extent there is any significant vote against our named executive officer compensation as disclosed in this Proxy Statement, our Compensation and Leadership Development Committee will evaluate whether any actions are necessary to address the concerns of shareholders. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” the approval, on a non-binding advisory basis, of the compensation of our named executive officers, as disclosed in this Proxy Statement. PROPOSAL 11—AUTHORIZATION OF ALLOTMENT OF SHARES Under the U.K. Companies Act 2006, our Board of Directors cannot allot shares in the Company unless they are authorized to do so by our shareholders at a general meeting. The Directors currently have an existing authority to allot shares in the Company and to grant rights to subscribe for or convert securities into shares in the Company. This authority was granted to the Directors prior to our initial public offering in September 2020 and was in respect of a maximum aggregate nominal amount of up to £536,000 (the "Existing Authority"). The Existing Authority remains unexercised in respect of approximately 43% of the Company’s issued ordinary share capital; however 37% is allotted and reserved for future issuances under outstanding warrants and under 20 outstanding equity awards and in connection with future awards under our equity compensation plans . This Proposal 12 is an ordinary resolution to seek a new authority, in addition to such subsisting amounts under the Existing Authority. Proposal 12 proposes that the Board of Directors are granted authority to allot new shares or to grant rights to subscribe for or to convert any security into shares in the Company up to a maximum aggregate nominal amount of £820,100, which represents approximately 150% of the Company's issued ordinary share capital. If approved by shareholders, this authority will expire on May 8, 2029. If shareholders do not approve Proposal 12, the subsisting amounts under the Existing Authority granted at the time of the Company's initial public offering will continue to apply until September 10, 2025 or until such earlier time as it has been fully utilized. However, such existing authorization is only sufficient to cover future issuances under outstanding warrants, under outstanding equity awards and future equity awards under our equity compensation plans. Absent a further shareholder authorization, we do not have sufficient shares to raise capital to fund the development of the Company’s business and to increase the shares reserved for issuance under the Company’s equity compensation plans in accordance with such plans' "evergreen provisions". The grant of this authority will not exempt the Company from applicable Nasdaq requirements to obtain shareholder approval prior to certain share issuances or to comply with applicable SEC disclosure requirements and other rules and regulations. Our Board of Directors will continue to focus on and satisfy its fiduciary duties to our shareholders with respect to share issuances. If shareholders do not approve this Proposal No. 12, the Existing Authority to allot and issue shares up to the amount of our authorized but unissued share capital will continue to apply until September 10, 2025. However, our Board would generally not be able to issue any shares after September 10, 2025 (other than pursuant to any pre-existing contractual obligations, including upon exercise of outstanding warrants) without first seeking and obtaining shareholder approval for each such issuance. This limitation on our ability to issue shares would disadvantage us vis-à-vis many of our late-stage clinical biotechnology peers (many of which are incorporated in the United States) in competing for capital. Like other late-stage clinical biotechnology companies, we intend to seek additional fundraisings when necessary to implement our operating plan. Failure to raise additional capital may inhibit us from being able to file for regulatory approval and commercialize COMP360 and could delay research and development of our investigational COMP360 psilocybin treatment, research and discovery efforts for prodrug candidates and new compounds and the achievement of other strategic goals. In light of our size and status of being a pre-revenue-generating company, the Board believes that equity financings are an appropriate method to support any potential future funding requirements. The Board believes that, in the event of an equity financing, having authorization to allot, or grant rights to subscribe for or convert securities into, our shares without needing to seek approval from shareholders at the time should allow Compass to raise funds more efficiently, with more Company favorable terms and in a timely fashion. REQUIRED VOTE The approval of this proposal to authorize allotment of shares requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, are not counted in the calculation of votes for or against this proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” this proposal to authorize allotment of shares. PROPOSAL 12—DISAPPLICATION OF PRE-EMPTION RIGHTS As a UK incorporated company, the Company’s shareholders are entitled, under the U.K. Companies Act 2006, to pre-emption rights, whereby, in the event that the Company wishes to allot new equity securities for cash, those securities must first be offered to existing shareholders in proportion to the number of ordinary shares they each hold before they can be offered to new shareholders unless the shareholders have sanctioned the disapplication of their statutory rights of pre-emption in respect of such allotment or grant of rights. 21 In practice, the operation of such pre-emption rights is onerous and can result in significant delay and additional expense to the cost of an equity fundraising. It is therefore customary for our Board of Directors to seek authority from our shareholders to dis-apply statutory pre-emption rights for cash issues of up to a limit approved by the Company’s shareholders. With the Company solely listed on Nasdaq, and the Company’s peers, key shareholders and primary target market being in the United States, the Board of Directors is mindful of the fact that equivalent United States incorporated companies are not required to offer shares to existing shareholders on a pre-emptive basis in the event they are pursuing an equity fundraising. The Board considers that its requirement to offer shares to existing shareholders on a pre-emptive basis may place the Company at a disadvantage in competing for capital. Therefore, Proposal 13 seeks a disapplication of pre-emption rights for cash issues of up to a certain proportion of the Company’s issued ordinary share capital. Our Board of Directors currently has a power to allot shares as if the rights of pre-emption applicable under the U.K. Companies Act 2006 did not apply for cash issues. This power was granted to the Directors pursuant to shareholder resolutions passed on September 11, 2020 and was in respect of a maximum aggregate nominal amount of £536,000. It remains unexercised in respect of approximately 43% of the Company’s issued ordinary share capital; however 37% is allotted and reserved for future issuances under outstanding warrants, under outstanding equity awards and in connection with future awards under our equity compensation plans. Our Board of Directors have decided to seek a new disapplication of pre-emption rights for cash issues to replace the existing power. This Proposal will, if passed, give the Directors power, pursuant to the authority to allot granted by Proposal 12, to allot shares for cash or to grant rights to subscribe for or to convert any security into shares without first offering them to existing shareholders in proportion to their existing holdings up to an aggregate maximum nominal amount of £820,100, which represents approximately 150% of the Company’s issued share capital as of March 27, 2024. This Proposal will be required to be passed as a special resolution and, if passed, this power will expire on May 8, 2029. If shareholders do not approve Proposal 12 or this Proposal 13, the subsisting amounts under the existing authorization granted prior to the Company's initial public offering in September 2020 will continue to apply until September 10, 2025 (other than pursuant to any pre-existing contractual obligations, including upon exercise of outstanding warrants) or until such earlier time as it has been fully utilized. However, such existing authorization is only sufficient to cover future issuances under outstanding warrants, under outstanding equity awards and future equity awards under our equity compensation plans. Absent securing further shareholder authorization to allot new equity securities and disapply pre-emption rights for cash issues, we do not have sufficient shares to raise capital to fund the development of the Company’s business through completion of our phase 3 clinical program for our investigational COMP360 psilocybin treatment and to increase the shares reserved for issuance under the Company’s equity compensation plans in accordance with such plans' "evergreen provisions". Our Board of Directors considers that, as a late-stage clinical biotechnology company, the ability to raise new equity funds at relatively short notice and at low cost is vital to the continuing financial health of the business and our ability to continue our research and development activities. We believe that it is in the best interests of the Company and our shareholders for the Board of Directors to seek to retain the ability to raise new equity funds efficiently on the best terms available and in a timely fashion. REQUIRED VOTE The approval of the disapplication of pre-emption rights is a special resolution and requires the affirmative vote of not less than 75% of the votes cast by shareholders present (in person or by proxy) at the Meeting and entitled to vote. On a poll, a special resolution is passed if it is approved by holders representing not less than 75% of the total voting rights of shareholders present (in person or by proxy) who (being entitled to vote) vote on the resolution.. This vote is advisory and non-binding. Abstentions and broker non-votes, if any, are not counted in the calculation of votes for or against the proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” the disapplication of pre-emption rights. 22 BOARD OF DIRECTORS AND CORPORATE GOVERNANCE BOARD OF DIRECTORS Below is a list of our directors and their positions and ages as of
During the year ended December 31, The biographical information for Below is biographical information for those directors who are not standing for re-election at this Meeting and who will remain seated following the Meeting. Kabir Nath has served as our Chief Executive Officer and a member of our Board since August 2022. Previously from March 2016 until July 2022, Mr. Nath held positions of increasing responsibility and leadership at Otsuka Holdings Co., Ltd., a leading global healthcare group listed on the Tokyo Stock Exchange (JP 4578). Most recently, from March 2020 until July 2022, Mr. Nath served as senior managing director of global pharmaceuticals at Otsuka. From March 2016 until April 2022, Mr. Nath served as president and chief executive officer of Otsuka’s North America Pharmaceutical Business. Prior to Otsuka, from 2003 until December 2015, Mr. Nath held positions of increasing responsibility and leadership at Bristol-Myers Squibb Company (NYSE: BMS). Mr. Nath holds an M.A. from King’s College, University of Cambridge, and an M.B.A. from INSEAD. We believe that Mr. Nath is qualified to serve on our Board because of his extensive experience in the pharmaceutical and biotechnology sector and his commercial and senior leadership experience. 23 Annalisa Jenkins, MBBS, FRCP, has served as a member of our Board since May 2018. Thomas Lönngren has served as a member of our Board since May 2018. Mr. Lönngren currently serves as the Director at PharmaExec Consulting AB and as a Strategic Advisor at the NDA Group, which he has done since 2010. He is non-executive board member and chairman at Egetis Therapeutics AB, believe that Mr. Lönngren is qualified to serve on our Board because of his experience, qualifications, attributes and skills, including his extensive pharmaceutical consulting experience. Linda McGoldrick, Ph.D, has served as a director of our company since September 2020. In 1985, Dr. McGoldrick founded, and currently serves as Chair and Chief Executive Officer of, Financial Health Associates International, a strategic consulting company specializing in healthcare and life sciences. From April 2019 through December 2019, Dr. McGoldrick served as President and interim Chief Executive Officer of Zillion, Inc., 24 Sciences Industry Practices at Marsh-MMC Companies, international operations and marketing director of Veos plc, a European medical devices company, and managing director Europe for Kaiser Permanente International. In 2018, Dr. McGoldrick was appointed by the Governor of Massachusetts to serve on the state’s Health Information Technology Commission. Dr. McGoldrick currently serves on the board of Alvotech (Nasdaq: ALVO) and a number of privately-held life sciences companies. Dr. McGoldrick has served as a director of numerous publicly traded and private held companies and non-profit organizations in the United States, United Kingdom and Europe and currently serves on the faculty of the National Association of Corporate Directors. Dr. McGoldrick previously served on the board of directors of Avadim Health, Inc. Dr. McGoldrick received her bachelor of arts in sociology from Ohio Wesleyan University and master of social work in healthcare from the University of Pennsylvania, master of business administration in management and finance from the Wharton School, University of Pennsylvania and a Ph.D. in global health from Worcester Polytechnic Institute. We believe that Dr. McGoldrick is qualified to serve on our Board because of her extensive experience as a public company director, chief executive officer of various global organizations and corporations, global business strategy leader and policy expert for U.S. and European companies and organizations. Robert McQuade, Ph.D. has served as a member of our Board since CORPORATE GOVERNANCE Structure of our Board of Directors Our Articles of Association and Corporate Governance Guidelines gives our Board the flexibility to determine the appropriate leadership structure for the Board, including whether the offices of Chief Executive Officer and Chair of the Board should be separate or combined and why the Board’ leadership structure is appropriate given the specific characteristics or circumstances of our Our Board is currently chaired by our co-founder and a significant shareholder, George Goldsmith. Independence of our Board of Directors Our Board has determined that all of our current directors, other than George Goldsmith, our co-founder and Board Chair, Kabir Nath, our Chief Executive Officer, and Ekaterina Malievskaia, our co-founder and former Chief Innovation Officer, qualify as “independent” directors in accordance with the independence requirements under the applicable Nasdaq rules as well as applicable rules promulgated by the SEC. Mr. Nath is not considered independent 25 because he is an executive officer and employee of the Company. Mr. Goldsmith and Dr. Malievskaia are not considered independent because Our Board has made a subjective determination as to each independent director that no relationships exist that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, our Board reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and our management. Mr. Goldsmith is married to Dr. Malievskaia. There are no other family relationships among any of our directors or executive officers. Our independent directors meet in regularly scheduled executive sessions at which only independent directors are present. The Audit and Risk Committee, the Compensation and Leadership Development Committee and the Nominating and Corporate Governance Committee are each comprised entirely of directors determined by the Board to be independent. Board Oversight of Risk Management and ESG Matters Our management is primarily responsible for assessing and managing risk and one of the key functions of the Board is informed oversight of our risk management process. In carrying out its risk oversight responsibilities, the Board reviews the long and short-term operational and external risks facing the Company through its participation in long-range strategic planning, and ongoing reports from various Board standing committees that address risks inherent in their respective areas of oversight. On an ongoing basis, the Board and management identify key long and short-term risks, assess their potential impact and likelihood, and, where appropriate, implement operational measures and controls or purchase insurance coverage in order to help ensure adequate risk mitigation. The Board is supported by its committees in fulfillment of its risk oversight responsibilities. For example, our Audit and Risk Committee focuses on our overall financial risk by evaluating our internal controls and disclosure policies as well as ensuring the integrity of our financial statements and periodic reports. The Audit and Risk Committee also monitors compliance with legal and regulatory Most of the Environmental, Social, and Governance (“ESG”) matters prioritized as part of our ESG framework are embedded in the Company’s strategic and operational plans, and are therefore overseen by the Board as part of regular updates and discussions that the Board receives and holds on these plans. The Board also specifically discusses our ESG framework at least once a year. Furthermore, Board oversight of specific ESG matters occurs through the committees of the Board: our Nominating and Corporate Governance Committee oversees our corporate governance guidelines; our Audit and Risk Committee oversees our risk and compliance framework, our code of conduct and ethics, as well as data privacy and security matters; and our Compensation and Leadership Development Committee oversees talent and employee-related matters, and human capital management strategies, including our employee well-being program and equity, diversity and inclusion initiatives. Board Evaluation Process Our Board is committed to assessing its own performance as a board in order to identify its strengths as well as areas in which it may improve its performance. The board evaluation process, which is overseen by the Nominating and Corporate Governance Committee, involves the completion of annual written questionnaires by the directors and interviews with members of the Board and, where appropriate from time to time, may include interviews with key members of management and key advisors to the Board. The results of the board evaluation process are reviewed and discussed, including considerations of action plans to address any issues, by both the Nominating and Corporate Governance Committee and our Board. Committees of Our Board of Directors Our Board has three standing committees: the Audit and Risk Committee, the Compensation and Leadership Development Committee, and the Nominating and Corporate Governance Committee. We also have an Innovation 26 and Research Committee, which meets on an ad hoc, as needed basis and does not yet have a charter in place that governs its purpose and duties. The Innovation and Research Committee meets to oversee the development and progress of programs to research and develop drug and technology assets that aid our mission to accelerate patient access to evidence-based innovation in mental health. The charters for our Audit and Risk Committee, Compensation and Leadership Development Committee and Nominating and Corporate Governance Committee can be found on the “Corporate Governance–Documents and Charters” section of our investor relations website at ir.compasspathways.com. Each such committee reviews these charters at least annually.
Audit and Risk Committee Our Audit and Risk Committee currently consists of Annalisa Jenkins, Daphne Karydas, Linda McGoldrick and Robert McQuade and assists our Board in overseeing our accounting and financial reporting processes. Ms. Our Audit and Risk Committee’s responsibilities include: •appointing, approving the compensation of, and assessing the performance and independence of our independent registered public accounting firm; •approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm; •reviewing the audit plan with the independent registered public accounting firm and members of management responsible for preparing our financial statements and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures as well as critical accounting policies and practices used by us; •discussing with the independent registered public accounting firm its independence and obtaining required written communications required by the PCAOB; •exercising general oversight over our information security and technology risks, including our cybersecurity and information security and related risk management programs; and 27 •monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements and reviewing all related party transactions for potential conflict of interest situations and approving all such transactions. Compensation and Leadership Development Committee Our Compensation and Leadership Development Committee currently consists of Annalisa Jenkins, David Norton and Wayne Riley. Dr. Jenkins serves as chair of our Compensation and Leadership Development Committee. Under SEC and Nasdaq rules, there are heightened independence standards for members of our Compensation and Leadership Development Committee, including a prohibition against the receipt of any compensation from us other than standard board member fees. Each member of our Compensation and Leadership Development Committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act. Our Board has determined that each member of our Compensation and Leadership Development Committee is “independent” as defined under the applicable Nasdaq rules. Our Compensation and Leadership Development Committee held Our Compensation and Leadership Development Committee’s responsibilities include: •reviewing policies relevant to the consideration and determination of compensation of our directors and executive officers; •overseeing and administering our employee equity incentive plans in operation from time to time, including reviewing and approving grants and awards; •reviewing and approving certain corporate goals and objectives relating to the compensation of our chief executive officer, evaluating the performance of our chief executive officer in light of such corporate goals and objectives, and recommending the compensation of our chief executive officer to the Board based on such evaluation; •reviewing and recommending to our Board the compensation of our other executive officers and our directors; •overseeing our strategies, programs and initiatives related to equity, diversity and inclusion, gender pay parity and creating a positive working environment; •reviewing and overseeing our human capital management strategies, policies and practices, including employee health, safety and well-being, workforce belong, inclusion and diversity efforts and overall employee engagement and retention; and •reviewing and approving the retention of consulting firm or outside advisor to assist in the evaluation of compensation matters. The Compensation and Leadership Development Committee has the authority to delegate certain responsibilities to one or more subcommittees consisting of one or more of its members, but has not delegated such authority to a subcommittee. Our Board has delegated to the Compensation and Leadership Development Committee the authority to approve any proposed compensation for our executive officers other than the Chief Executive Officer whose compensation is recommended to the Board for approval based on the Compensation and Leadership Development Committee’s evaluation of his performance in relation to our goals and objectives. Non-executive director compensation is recommended by our Compensation and Leadership Development Committee to the Board for approval. Our Chief Executive Officer may participate in general discussions with our Compensation and Leadership Development Committee and Board about these compensation matters, but he does not participate in discussions during which his individual compensation is being considered and approved. In Nominating and Corporate Governance Committee 28 Our Nominating and Corporate Governance Committee currently consists of Thomas Lönngren, Linda McGoldrick and Wayne Riley. Mr. Lönngren serves as chair of our Nominating and Corporate Governance committee. Our Board has determined that each member of our Nominating and Corporate Governance Committee is “independent” as defined under the applicable Nasdaq rules. Our Nominating and Corporate Governance Committee held Our Nominating and Corporate Governance committee’s responsibilities include: •developing and recommending to the Board criteria for board and committee membership; •establishing procedures for identifying and evaluating board of director candidates, including nominees recommended by shareholders, including procedures by which shareholders may recommend director candidates; •identifying individuals qualified to become members of the Board; •evaluating the suitability of individual prospective director candidates, including considering the benefits of diversity, including diversity of thought, educational and professional background, gender, race, age, sexual orientation or ethnic and national background; •recommending to our Board the persons to be nominated for election as directors and to each of our Board’s committees; •developing and recommending to our Board a set of corporate governance guidelines, and regularly reviewing policies and guidelines adopted by the Board or its committees; and •overseeing the evaluation of our Board and its committees. Our Board is responsible for filling vacancies on our Board and for nominating candidates for election by our shareholders each year in the class of directors whose term expires at the relevant annual general meeting. The Board delegates the selection and nomination process to the Nominating and Corporate Governance Committee, with the expectation that other members of the Board, and of management, will be requested to take part in the process as appropriate. The Nominating and Corporate Governance Committee considers candidates for Board of Director membership by soliciting recommendations from any of the following sources: independent directors, the Chief Executive Officer, other executive officers, third-party search firms, or any other source it deems appropriate. Additionally, the Nominating and Corporate Governance Committee will review and evaluate the qualifications of any such proposed candidate, and conduct inquiries it deems appropriate. Any shareholder who wishes to recommend a candidate for consideration by the committee as a nominee for director should follow the procedures described later in this Proxy Statement under the heading “Additional Information—Shareholder Proposals.” Director Nomination Process The process followed by our Nominating and Corporate Governance Committee to identify and evaluate director candidates includes requests to board members and others for recommendations, including through the use of search firms or other advisors, meetings from time to time to evaluate biographical information and background material relating to potential candidates, and interviews of selected candidates by management, recruiters, members of the committee and our Board. Once candidates have been identified, the Nominating and Corporate Governance Committee confirms that the candidates meet all of the minimum qualifications and other criteria for director nominees approved by the Board and all facts and circumstances that it deems appropriate or advisable. The Nominating and Corporate Governance Committee may gather information about the candidates that relate to their skills, their depth and breadth of business experience or other background characteristics, their independence, the needs of the Board and any other item of information that the Nominating and Corporate Governance Committee deems to be appropriate in the evaluation process. The Nominating and Corporate Governance Committee then meets as a group to discuss and evaluate the qualities and skills of each candidate, both on an individual basis and taking into account the overall composition and needs of our Board. Based on the results of the evaluation process, the Nominating and Corporate Governance Committee recommends candidates for the Board’s approval to fill a vacancy or as director nominees for election to the Board by our shareholders each year in the class of directors whose term expires at the relevant annual general meeting. 29 The qualifications, qualities and skills that our Nominating and Corporate Governance Committee believes must be met by a nominee for a position on our Board are as follows: •The nominee shall have experience at a strategic or policymaking level in a business, government, non-profit or academic organization of high standing. •The nominee shall be accomplished in his or her respective field, with superior credentials and recognition. •The nominee shall be well regarded in the community and shall have a long-term reputation for the high ethical and moral standards. •The nominee shall have sufficient time and availability to devote to the affairs of the Company, particularly in light of the number of boards of directors on which such nominee may serve. •To the extent such nominee serves or has previously served on other boards, the nominee shall have a demonstrated history of actively contributing at board meetings. While we have no formal policy regarding board diversity, our Corporate Governance Guidelines and Nominating and Corporate Governance Committee charter provide that when evaluating proposed director candidates, the Nominating and Corporate Governance Committee (or any search firm acting under the direction of the Nominating and Corporate Governance Committee) shall consider the benefits of diversity, including diversity of thought, educational and professional background, gender, race, age, sexual orientation or ethnic and national background. Our priority in selection of board members is identification of members who will further the interests of our shareholders through consideration of a number of facts and circumstances, including among other things, the skills of the prospective director candidate, his or her depth and breadth of business experience or other background characteristics, his or her independence and the needs of the Board. The table below provides certain highlights of the composition of our Board members and nominees as of
In addition, one director has identified as a military veteran. Shareholder Recommendations and Nominees Our Nominating and Corporate Governance Committee considers both recommendations and nominations for candidates to the Board from shareholders so long as such recommendations and nominations comply with our Articles of Association, Nominating and Corporate Governance 30 Nominating and Corporate Governance Committee by writing to our Company Secretary at the address below not less than 120 days prior to the date on which the Company’s proxy statement is released to shareholders in connection with the previous year’s annual meeting. Shareholder recommendations for director candidates must include the nominee’s name and address of record, a representation that the shareholder is a holder of the Company’s securities, as well as the nominee’s detailed biographical data and qualifications for board membership, information regarding any arrangements or understandings between the shareholder and the recommended candidate, the consent of the proposed nominee to be named in the proxy statement and serve as a director if elected and any other information regarding the nominee that is required to be included in a proxy statement. Following verification of the shareholder status of the person submitting the recommendation, all properly submitted recommendations will be promptly brought to the attention of the Nominating and Corporate Governance Committee. Shareholders who desire to nominate persons directly for election to the Board at an annual general meeting of shareholders must meet the deadlines and other requirements set forth under “Additional Information —Shareholder Proposals.” Any vacancies on the Board occurring between our annual general meetings of shareholders may be filled by persons selected by a majority of the directors then in office, in which case any director so elected will serve until the next annual general meeting of shareholders when such director will offer himself/herself for re-election, or by persons elected by an ordinary resolution of the shareholders of the Company. You may write to the Nominating and Corporate Governance Committee at: c/o Ben Harber Company Secretary COMPASS Pathways plc 3rd Floor 1 Ashley Road, Altrincham Cheshire WA14 2DT United Kingdom Code of Business Conduct and Ethics We have adopted a Code of Business Conduct and Ethics applicable to all of our directors, officers, employees and certain designated agents. The Code of Business Conduct and Ethics is available on the “Corporate Governance –Documents and Charters” section of our investor relations website at ir.compasspathways.com. We expect that any amendments to this code or any waivers of its requirements will be disclosed on our website. Shareholder Communication with the Board of Directors Our Board has implemented a process by which our shareholders or any interested parties may communicate with our Board as a whole or with individual members of our Board. Communications directed to our Board as a whole should be addressed to COMPASS Pathways plc 3rd Floor, 1 Ashley Road, Altrincham Cheshire WA14 2DT, United Kingdom Attn: Chair of the Board, and communications directed to individual directors, including our Lead Independent Director, should be addressed to the attention of the individual director at the same address. Such communications may be made on an anonymous or confidential basis. All such communications received by the Company shall be delivered initially to the Company’s General Counsel, who shall review and maintain a log of all such communications. Directors may at any time review this log and request copies of any shareholder communication. Communications received will be promptly forwarded to the specified addressees thereof at the Company’s discretion. In general, communications relating to board and chief executive officer succession planning, corporate governance matters, executive compensation matters, general board oversight matters and long-term corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances, and matters as to which we tend to receive repetitive or duplicative communications. Any interested party with concerns about our company may report such concerns to the Board or the chairman of our Board and Nominating and Corporate Governance Committee by following the procedures described above. A copy of any such written communication may also be forwarded to our legal counsel and a copy of such communication may be retained for a reasonable period of time. The director may discuss the matter with our legal counsel, with independent advisors, with non-management directors, or with our management, or may take other action or no action as the director determines in good faith, using reasonable judgment, and applying his or her own discretion. Communications may be forwarded to other directors if they relate to important substantive matters and include suggestions or comments that may be important for other directors to know. 31 The Audit and Risk Committee oversees the procedures for the receipt, retention, and treatment of complaints received by us regarding accounting, internal accounting controls or audit matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting, internal accounting controls or auditing matters. Any shareholder communications that include concerns or complaints regarding accounting, internal controls or auditing matters or potential violations of the federal securities laws or the Foreign Corrupt Practices Act will be handled in accordance with procedures adopted by the Audit and Risk Committee. We have also established a toll-free telephone number for the reporting of such activity, which is +1 877 306 1965 or +44 (0) 800 032 5911. DIRECTOR COMPENSATION Under our Directors’ Remuneration Policy for Non-Executive Directors (“Director Compensation Policy”), the Board has the discretion to pay cash and equity fees to our non-executive directors for their Board and committee service. Our compensation arrangements for non-executive directors during Our Director Compensation Policy In addition to cash compensation, each non-executive director is eligible to receive share options under our equity incentive plans. We have historically awarded share options to certain non-executive directors in an amount determined at the discretion of the Board or Compensation and Leadership Development Committee. The value of all equity awards and cash compensation to any non-executive director in any calendar year for services as a non-executive director shall not exceed £750,000. We do not have a formal share ownership guideline policy for non-executive directors. During 2023, our Director Compensation Policy provided that each new non-executive director elected to our Board was granted an initial one-time equity award of options to purchase 52,000 of our ADS on the date of such director’s initial election or appointment to the Board and each continuing non-executive director will The table below shows the compensation paid to our non-executive directors during the year ended December 31, 33
(1) The amount reported represents the aggregate grant date fair value of share options awarded to our non-employee directors during the (2) At December 31, (3) (5) Dr. Malievskaia earned $24,827 in board fees under the Director Compensation Policy for the portion of the year during which she served as a non-executive director. Such compensation amounts are reported under the heading “Named Executive Officer Compensation—Summary Compensation Table” below. EXECUTIVE OFFICERS OF THE COMPANY Below is a list of our executive officers and their positions and ages as of the date of
For biographical information regarding Mr. Nath, Guy Goodwin has served as our Chief Medical Officer since August 2021. Dr. Goodwin currently serves as Emeritus Professor of Psychiatry at The University of Oxford, where he has been a professor of psychiatry since October 1996. Additionally, Dr. Goodwin served as Medical Director at P1vital, where he worked between April 2018 and July 2021. Dr. Goodwin previously served as WA Handley Chair of Psychiatry and Head of the University of Oxford’s Department of Psychiatry. Dr. Goodwin is a Fellow of the Academy of Medical Sciences, the American College of Neuropsychopharmacology, and former President of the British Association for Psychopharmacology and of the European College of Neuropsychopharmacology. Dr. Goodwin received his BA, DPhil, BM, and BCh from the University of Oxford. Teri Loxam has served as our Chief Financial Officer since March 2024 and worked with us on a consulting basis from December 2023 to March 2024. Prior to joining the Company, Ms. Loxam served as Chief Financial Officer of Gameto, Inc., a privately held, clinical-stage biotechnology company from April 2023 until October 2023. Previously, Ms. Loxam served as Chief Financial Officer and Chief Operating Officer of Kira Pharmaceuticals, a privately held, clinical-stage biotechnology company, from November 2021 to April 2023 and as Chief Financial Officer of SQZ Biotechnologies (OTC: SQZB), from August 2019 to November 2021. From August 2015 to August 2019, Ms. Loxam served in various roles at Merck & Co., Inc. (NYSE: MRK), including serving as Senior Vice President of Investor Relations and Global Communications. Before that, from July 2012 to August 2015, Ms. Loxam served as Vice President of Investor Relations at IMAX Corporation (NYSE: IMAX). From June 2001 to July 2012, Ms. Loxam had a number of roles of increasing responsibility across Strategy, Treasury and Investor Relations at Bristol-Myers Squibb (NYSE: BMY). Ms. Loxam currently serves on the boards of directors and as audit committee chairperson at Cardiol Therapeutics Inc. (Nasdaq: CRDL) (TSX: CRDL) where she has served since May 2022 and Vaxcyte, Inc. (Nasdaq: PCVX) where she has served since September 2021. Ms. Loxam holds an M.B.A. from the University of California, Irvine, Paul Merage School of Business, and a B.Sc. from the University of Victoria. Matthew Owens has served as our General Counsel and Chief Legal Officer since February 2022. Prior to joining the Company, Mr. Owens served as Global Head Legal, Digital at Novartis International AG, beginning in January 2018. He has served in various positions with Novartis since 2010, also serving as Senior Legal Counsel, and as Head Legal, Strategic Partnerships and Digital. Prior to Novartis, he was Senior Counsel at Solvay Pharmaceuticals, and Corporate Counsel at Mettler-Toledo. He holds a Bachelor of Arts (Pre-Law & Political Science, History & Criminology) from Capital University, Columbus, Ohio, and a Juris Doctorate from Capital University Law School where he was a Presidential Scholar. He previously was a lecturer at the University of Zurich Law School’s Europa Institute. EXECUTIVE COMPENSATION This Executive Compensation section describes our executive compensation program and the Our named executive officers for •Kabir Nath, our Chief Executive Officer and a Director; • •Matthew Owens, our Chief Legal Officer and General •Michael Falvey, our former Chief Financial Officer; and •Ekaterina Malievskaia, our co-founder and former Chief Innovation Officer. This Executive Compensation section describes the material elements of our executive compensation program during EXECUTIVE SUMMARY Business Overview We are a Corporate Performance Highlights We have made substantial progress during • • • Manage our cash runway and ensure value for shareholders • issued warrants, which are exercisable at the election of the holder between February 2024 and February 2027 and if all warrants are exercised for cash would result in an additional approximately $160 million in gross proceeds • • Grow pipeline beyond COMP360 in TRD •Completed enrollment of our open-label phase 2 study evaluating safety and tolerability of COMP360 in 22 patients with PTSD study and announced initial safety findings from this study at 24 hours •Continued to progress our phase 2 study in anorexia nervosa •Advanced non-oral psilocin prodrug program and ongoing research on prodrug development, which has led to a number of potential candidate leads being identified that we plan to continue through further Maintain our unique culture while maturing our organizational processes • • •Enhanced our risk management reporting, compliance maturity and quality processes OVERVIEW OF EXECUTIVE COMPENSATION PROGRAM Executive Compensation Philosophy Our executive compensation program is guided by our overarching philosophy of paying for performance. Consistent with this philosophy, we have designed our executive compensation program with the following principles in mind:
Executive Compensation Program Design Our executive compensation program is designed to be reasonable and competitive, and balance our goal of attracting, motivating, rewarding and retaining top-performing senior executives with our goal of aligning their interests with those of our shareholders. The Compensation and Leadership Development Committee annually evaluates our executive compensation program to ensure that it is consistent with our short-term and long-term goals and market competitive practices. Our executive compensation program consists of a mix of compensation elements that balance achievement of our short-term goals with our long-term performance. We provide short-term incentive compensation opportunities in 37 the form of annual cash bonuses, which focus on our achievement of annual goals. We also provide long-term incentive compensation opportunities in the form of equity awards. We provide a combination of share options with an exercise price equal to fair market value, or "market-priced" options, and full-value awards (in the form of restricted share units for U.S. taxpayers and options with an exercise price equal to the nominal value of a share, or nominal cost options, for non-U.S. taxpayers) and which focus executive attention on our long-term performance. We believe that market-priced Our executive compensation program is also designed to incorporate sound practices for compensation governance. Below we summarize such practices. What We Do:
What We Don’t Do:
“Say-on-Pay” Vote on Executive Compensation 38 Annually, at our general meeting of shareholders, we hold a non-binding advisory vote regarding the compensation of our named executive officers, which we refer to as say-on-pay. The Compensation and Leadership Development Committee has considered and will continue to consider the outcome of such say-on-pay votes, including the percentage of votes cast in favor and against the say-on-pay proposal, when making future compensation decisions for our named executive officers. The Compensation and Leadership Development Committee also relies on advice from its compensation consultants, its evaluation of Company performance against pre-defined corporate goals, its understanding of the challenges facing the Company and its observations of executive officer performance to determine executive officer compensation. At our Among other things, our Our new remuneration policy is proposed for approval at this Meeting and will remain valid until replaced by a new or amended policy (expected to occur at the 2027 annual general meeting of the Company).Our new proposed remuneration policy, which our Board of Directors has determined is competitive and consistent with current market practices. The proposed policy is largely similar to our previously approved policy, but includes the following material changes. •The proposed policy sets the maximum annual bonus payable to an Executive Director to 100% of his or her annual base salary and provides that the bonus amount may be paid in cash or shares, at the Compensation and Leadership Development Committee's election. •The proposed policy provides that the maximum pension or retirement contribution, cash supplement (or combination thereof) payable by the Company shall be up to 5% of base salary, or such lesser percentage which is available to the general workforce. •The proposed policy includes compensation recovery provisions, which are designed to comply with the mandatory compensation “clawback” requirements under Nasdaq rules that became effective as of October 2, 2023. Under the policy, in the event of an accounting restatement, we will be required to recover erroneously received incentive‑based compensation from our current and former executive officers representing the excess of the amount actually received over the amount that would have been received had the financial statements been correct in the first instance. Governance of Executive Compensation Program Role of the Compensation and Leadership Development Committee and the Board of Directors 39 Our Compensation and Leadership Development Committee, which is comprised entirely of independent directors, is responsible for discharging our Board’s responsibilities relating to compensation of our directors and executives, overseeing our overall compensation structure, policies and programs, and reviewing our processes and procedures for the consideration and determination of director and executive compensation. The Compensation and Leadership Development Committee’s approach to remuneration matters is to enable the Company to attract and retain talent, incentivize long-term value generation, and effectively manage the Company’s cash resources. It is the belief of the Compensation and Leadership Development Committee that this is best achieved through a greater emphasis on variable rather than fixed remuneration, comprised of a mix of base salary and benefits, along with the flexibility to appropriately reward and incentivize with variable pay and long-term incentives. Our Compensation and Leadership Development Committee has the authority to retain, at our expense, one or more third-party compensation consultants to assist the Compensation and Leadership Development Committee in performing its responsibilities. At the beginning of the year, the Compensation and Leadership Development Committee reviews and recommends, in the case of Compensation-Setting Factors When reviewing and approving the amount of each compensation element and the target total compensation opportunity for our executive officers, the Compensation and Leadership Development Committee considers the following factors: the Company’s performance during the year, based on business and corporate goals and priorities established by the Chief Executive Officer and the Board of Directors; each executive officer’s skills, experience and qualifications relative to other similarly-situated executives at the companies in our compensation peer group; the scope of each executive officer’s role compared to other similarly-situated executives at the companies in our compensation peer group; the performance of each individual executive officer, based on an assessment of their contributions to our overall performance, ability to lead their department and work as part of a team, all of which reflect our values; compensation parity among our executive officers; the dilutive impact of equity awards; our retention goals; general economic and market conditions and rate of inflation; changes in the size and complexity of the Company as we transitioned to a Phase 3 clinical development company and prepare to transition from a clinical-stage company to a fully integrated biotechnology company in anticipation of our first product launch; the expectations of institutional shareholders and any specific feedback received from shareholders; and the recommendations provided by the Chief Executive Officer with respect to the compensation of our executive officers, other than These factors provide the framework for compensation decisions for each of our executive officers, including our named executive officers. The Compensation and Leadership Development Committee and the Board, as applicable, do not assign relative weights or rankings to these factors, and do not consider any single factor as determinative in the compensation of our executive officers. Rather, the Compensation and Leadership Development Committee and the Board, as applicable, rely on their own knowledge and judgment in assessing these factors and making 40 compensation decisions. Role of Management In discharging its responsibilities, the Compensation and Leadership Development Committee works with management, including our Chief Executive Officer. Our management assists the Compensation and Leadership Development Committee by providing information on corporate and individual performance, market compensation data and management’s perspective on compensation matters. In addition, at the beginning of each year, our Chief Executive Officer reviews the performance of our other executive officers, including our other named executive officers based on our achievement of our corporate goals and each executive officer’s overall performance during that year. The Compensation and Leadership Development Committee solicits and reviews our Chief Executive Officer’s recommendations for base salary increases, annual cash bonuses, annual equity awards and any other compensation opportunities for our other executive officers, including our other named executive officers, and considers our Chief Executive Officer’s recommendations in determining such compensation. Role of Compensation Consultant The Compensation and Leadership Development Committee engages an external compensation consultant to assist it by providing information, analysis and other advice relating to our executive compensation program. For review and analysis of the compensation for our executive officers, including our named executive officers; research, development and review of our compensation peer support on other compensation matters as requested throughout the year. Aon reports directly to the Compensation and Leadership Development Committee and to the Compensation and Leadership Development Committee chair. Aon also coordinates with our management for data collection and job matching for our executive officers. The Compensation and Leadership Development Committee reviewed its relationship with Aon and considered Aon’s independence in light of all relevant factors, including those set forth in the Exchange Act and in applicable Nasdaq listing rules. The Compensation and Leadership Development Committee concluded that the work performed by Aon and Aon’s senior advisors involved in the engagements did not raise any conflict of interest. In reaching these conclusions, our Compensation and Leadership Development Committee considered the factors set forth in the SEC rules and the applicable Nasdaq rules. Role of Market Data For purposes of comparing our executive compensation against the competitive market, the Compensation and Leadership Development Committee reviews and considers the compensation levels and practices of a group of peer companies. This compensation peer group consists of public biotechnology companies that are similar to us in terms of market capitalization, stage of development and number of employees. As a Nasdaq-listed 41 To determine the composition of the peer group for publicly-traded companies listed in the United States (including both U.S.-headquartered and European-headquartered companies), with a preference towards companies with a recent IPO (i.e., within the past five years); companies in the pre-commercial biotechnology or health care technology sectors, with preference towards mental health care and healthcare technology platform companies, as appropriate; similar market capitalization—within a range of approximately 0.33x to approximately 3.0x our market capitalization in the stage of development of each company’s development candidates, with a focus on companies with similar headcount—within a range of This analysis led to the selection of the following peer group which was used to make the relevant compensation assessments for
PRIMARY ELEMENTS OF EXECUTIVE COMPENSATION PROGRAM The primary elements of our executive compensation program are: base salary; short-term incentive compensation in the form of annual cash bonuses; and long-term incentive compensation in the form of annual equity awards. Our executive officers, including our named executive officers, are also eligible to participate in our standard employee benefit plans, such as our health and welfare benefits plans, and defined contribution retirement plans on the same basis as our other employees in the U.S. or U.K., as applicable. In addition, as described below, our executive officers, including our named executive officers, are entitled to certain severance payments, change-in-control severance payments and benefits pursuant to their employment agreements, described herein. Base Salary We pay base salaries to our executive officers, including our named executive officers, to provide a market competitive fixed remuneration that reflects the responsibilities of the role undertaken, the experience of the individual, and their performance in the role over time. At the time of hire, base salaries are determined for our executive officers, including our named executive officers, based on the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above. Typically, at the beginning of each year, the Compensation and Leadership Development Committee reviews base salaries for our executive officers, 42 including our named executive officers, based on such factors to determine if an increase is appropriate. In addition, base salaries may be adjusted in the event of a promotion or significant change in responsibilities. In January
(1) All amounts, except those for Mr. Nath and Mr. Falvey, have been converted from GBP to USD using the The actual base salaries paid to our named executive officers in Short-Term Incentive Compensation Annual Cash Bonuses We provide short-term incentive compensation opportunities to our executive officers, including our named executive officers, in the form of annual cash bonuses to incentivize and award delivery of the Company’s strategy and corporate objectives on an annual basis. For Performance Goals At the beginning of each year, the Board discusses with the Chief Executive Officer the annual corporate performance objectives that are intended to be the most significant drivers of our short-term and long-term success. After the end of the relevant financial year, the Compensation and Leadership Development Committee assesses the results of the corporate goals, reviews management’s self-assessment, evaluates specific achievements that advanced the prior year’s corporate objectives, and determines our overall success in the prior year. The Compensation and Leadership Development Committee considers our Chief Executive Officer’s recommendations, and independently reviews and approves the total percentage achievement level for each of the other named executive officers. Target Annual Bonuses At the time of hire, the target annual bonus is determined for each of our named executive officers, and at the beginning of each year, the Compensation and Leadership Development Committee reviews and determines whether to change the target annual bonus for each such individual. The Compensation and Leadership Development Committee considers the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above, with an emphasis on market data from our compensation peer group for comparable positions. Target annual bonuses represent a specific percentage of annual base salary. Each year, we evaluate our target annual bonuses relative to our executive peer group and adjust the targets, as appropriate, to stay aligned with our compensation philosophy. In January 43 The Corporate Goals and Achievements Prepare for commercial launch in TRD – In collaboration with Lykos Therapeutics, we applied for a new CPT III code for the delivery of psychedelic treatments with the goal of ensuring broad and equitable access to psychedelic therapies, if approved, for people who urgently need new options to treat their mental health conditions. The American Medical Association accepted the application and released the language for the CPT III code titled “Continuous In-Person Monitoring and Intervention during Psychedelic Medication Therapy,” which became effective January 1, 2024. We entered into research collaborations with Greenbrook TMS and Hackensack Meridian Health to explore and develop multiple potential commercial delivery models for COMP360 psilocybin treatment if approved. Manage our cash runway and enhance shareholder value – During 2023, we raised an aggregate of approximately $180 million in gross proceeds from our private placement financing, sales under our ATM facility and the closing of our loan facility with Hercules Capital. In August 2023, we completed a Grow our pipeline beyond COMP360 in TRD – We quality processes. In January The table below sets forth the
(1) All amounts, except those for Mr. Nath, have been converted from GBP to USD using the (2) (3) Mr. Long-Term Incentive Compensation Long-term incentive compensation in the form of equity incentives aligns the interests of our executive officers, including our named executive officers, with long-term shareholder interests and allows us to attract, incentivize, and retain staff in a competitive market. As a form of compensation, share-based incentives also enable us to more effectively manage the Company’s cash resources. In connection with the IPO, we adopted the COMPASS Pathways plc 2020 Share Option and Incentive Plan (the “2020 Plan”). The 2020 Plan allows for the grant of options, restricted share awards, restricted share unit awards (“RSUs”), other share or cash-based awards and dividend equivalent awards to employees, non-employee directors and consultants.
Typically, at the beginning of each year, the Compensation and Leadership Development Committee determines the size and relative weighting of the annual equity awards for our executive officers, including our named executive officers, it deems reasonable and appropriate based on such factors. With the help of our compensation consultant, we determine whether to grant additional equity awards, the mix of RSUs and options and the amount of equity awards to give to our executive officers based on benchmarking the position of each executive officer against the compensation paid to people in similar positions in our peer group. In February
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Employment Arrangements with our Named Executive Officers In connection with our IPO, the Compensation and Leadership Development Committee reviewed the employment agreements with our executive officers, including Our post-employment compensation arrangements set forth in the employment agreements are designed to provide reasonable compensation to executive officers who leave the Company under certain circumstances to facilitate their transition to new employment. Further, we seek to mitigate any potential employer liability and avoid future disputes or litigation by requiring a departing executive officer to sign a separation and release agreement acceptable to us as a condition to receiving post-employment compensation payments or benefits. Our Compensation and Leadership Development Committee and the Board do not consider specific amounts payable under these post-employment compensation arrangements when establishing annual compensation. It does believe, however, that these arrangements are necessary to offer compensation packages that are competitive. For more information on the service and employment agreements with our named executive officers and post-employment compensation arrangements, see the discussion under the headings “Employment Agreements, Change of Control and Severance Arrangements with Named Executive Officers” later in this Proxy Statement. Other Elements of Compensation Retirement Plans We currently maintain a 401(k) retirement savings plan for our U.S.-based employees, including any U.S.-based named executive officers, who satisfy certain eligibility requirements. The U.S. Internal Revenue Code (the “Code”) allows eligible employees to defer a portion of their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k) plan. We currently contribute a 4% safe harbor match on employee contributions up to the statutory limit. We also maintain a defined contribution plan for U.K. employees, including any U.K.-based named executive officers, who satisfy certain eligibility requirements. Other Compensation Policies and Practices Policy Prohibiting Hedging and Pledging Our Insider Trading Policy prohibits our executive officers, the non-employee members of our Board and certain designated employees who in the course of the performance of their duties have access to material, non-public information regarding the Company from engaging in the following transactions: selling any of our securities that they do not own at the time of the sale (a “short sale”); buying or selling puts, calls, other derivative securities of the Company or any derivative securities that provide the economic equivalent of ownership of any of our securities or an opportunity, direct or indirect, to profit from any change in the value of our securities or engaging in any other hedging transaction with respect to our securities at any time; using our securities as collateral in a margin account; and pledging our securities as collateral for a loan (or modifying an existing pledge) unless the pledge has been approved by the Audit and Risk Committee of the Board of Directors. Compensation Recovery Policy On November 1, 2023, we adopted a compensation recovery policy designed to comply with the mandatory compensation “clawback” requirements under Nasdaq rules that became effective as of October 2, 2023. Our compensation recovery policy provides that in the event we are required to prepare an accounting restatement, then we will seek to recover any erroneously awarded performance-based incentive compensation received by our current or former executive officers during the three completed fiscal years of the Company immediately preceding such financial restatement. This recovery is required without regard to any individual knowledge or responsibility related to the financial restatement. Notwithstanding the foregoing, we will not be required to seek such recovery if the Compensation and Leadership Development Committee determines it impracticable to do so (when permitted by Nasdaq rules), after reviewing all the relevant facts and circumstances and determining the direct expenses paid to third parties to assist in enforcing the policy would exceed the amount to be recovered and the Company has made a reasonable attempt to recover. Tax Considerations Taxation of “Parachute” Payments Sections 280G and 4999 of the U.S. Code provide that executive officers and directors who hold significant equity interests and certain other service providers may be subject to significant additional taxes if they receive payments or benefits in connection with a change in control of the company that exceeds certain prescribed limits, and that the company (or a successor) may forfeit a deduction on the amounts subject to this additional tax. We have not agreed to provide any executive officer, including any named executive officer, with a “gross-up” or other reimbursement payment for any tax liability that the executive officer might owe as a result of the application of Sections 280G or 4999 of the U.S. Code. SUMMARY COMPENSATION TABLE The following table shows the total compensation paid or accrued during the last two fiscal years ended December 31, 2023 and 2022
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(1) All 2023 amounts, except for Mr. Nath and Mr. Falvey, have been converted from GBP to USD using the 2023 average FX rate (£1:$1.2437). All 2022 amounts, except those for Mr. Nath, have been converted from GBP to USD using the 2022 average FX rate (£1: (2) The amounts reported in this column represent bonuses paid to each named executive officer based on the Compensation and Leadership Development Committee’s determination of performance against 2023 and 2022 goals, respectively, in its discretion. (3) The amount reported in the Stock Awards and Option Awards column represents the aggregate grant date fair value of time-based RSUs and time-based share options granted to each of the named executive officers in the applicable year, calculated in accordance with the provisions of FASB ASC Topic 718. The assumptions we used in calculating these amounts for 2023 are included in Note 8 of our audited consolidated financial statements for the year ended December 31, 2023 included in our Annual Report on Form 10-K, filed with the SEC on February 29, 2024. The assumptions we used in calculating these amounts for 2022 are included in Note 10 of our audited consolidated financial statements for the year ended December 31, 2022 included in our Annual Report on Form 10-K, filed with the SEC on February 28, 2023. The amounts reported in the Summary Compensation Table for these time-based RSUs and options may not represent the amounts that the named executive officers will actually realize from the awards. Whether, and to what extent, a named executive officer realizes value will depend on our actual operating performance, share price fluctuations and the named executive officer’s continued employment. (4) Effective August 1, 2022, Mr. Nath was appointed as our Chief Executive Officer and a member of our Board. (5) All other compensation for Mr. Nath in 2023 consists of (i) a one-time $250,000 cash contribution towards moving and relocation costs, (ii) housing allowance of (6) (9) All other compensation for (10) Mr. Falvey resigned from his role as chief financial officer to pursue other opportunities effective October 26, 2023 and his employment terminated effective November 3, 2023. The amount reported for salary represents the amount earned through November 3, 2023. (11) All other compensation for Mr. Falvey consists of (i) a EMPLOYMENT AGREEMENTS, CHANGE OF CONTROL AND SEVERANCE ARRANGEMENTS WITH NAMED EXECUTIVE OFFICERS Kabir Nath 48 General Terms. Effective August 1, 2022, we entered into an employment agreement with Mr. Nath in connection with his appointment as our Chief Executive Officer. The Mr. Nath's employment agreement provides for an annual base salary of $580,000 (upon Mr. Nath's relocation to the United Kingdom, such salary will be paid in pound sterling (“GBP”) and be equal to the greater of (i) £431,000 GBP or (ii) the GBP equivalent of $580,000 U.S. dollars calculated at the then-prevailing exchange rate), which is subject to annual review and redetermination. Pursuant to his employment agreement, Mr. Nath is eligible to earn an annual incentive bonus, with a target bonus amount of 60% of his then-current annual base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances) as determined by our Board in its discretion. In addition, Mr. Nath will receive (i) a housing stipend of £12,000 per month through August 2023; (ii) a one-time reimbursement payment of up to $5,000 for attorneys’ fees; and (iii) a one-time cash payment of $250,000 Payments Upon Termination. Either party may terminate the employment agreement upon ninety (90) days’ written notice. The Company may terminate the Employment Agreement at any time for “cause” (as such term is defined in the employment agreement). Mr. Nath may terminate the Employment Agreement upon thirty (30) days’ written notice for “good reason” (as such term is defined in the Employment Agreement), subject to Company’s right to cure the deficiency. In the event we terminate Mr. Nath’s employment without “cause” or Mr. Nath terminates his employment for “good reason”, Mr. Nath is entitled to a cash severance payment equal to one year’s annual salary plus the target annual bonus amount for the year in which such termination occurs. Guy Goodwin General Terms. In July 2021, we entered into an employment agreement with Dr. Goodwin in connection with his appointment as our Chief Medical Officer. Dr. Goodwin’s employment agreement provides for a base salary of £324,450 ($446,346), which is subject to annual review and redetermination. In addition, Dr. Goodwin is entitled to participate in our executive variable cash compensation program. In his employment agreement, Dr. Goodwin is eligible to earn an annual incentive bonus, with a target bonus amount of 35% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances) as determined by our Board of Directors in its discretion. Dr. Goodwin is only entitled to payment of a bonus payment if he is in the Company’s employment on the date that the bonus is paid and is not eligible for a bonus payment if he is subject to any disciplinary action or investigation at the date any bonus is being considered or paid. Dr. Goodwin is also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time. Payments upon Termination. The Company may, in its discretion, terminate Dr. Goodwin’s employment at any time with immediate effect by providing notice to Dr. Goodwin that it is exercising its right and will make a payment in lieu of notice (“PILON”). Such PILON is equal to the base salary which Dr. Goodwin would be entitled to receive during the notice period of three months less deductions required by law and will be paid within 28 days. Dr. Goodwin is subject to immediate termination and is not entitled to any further payment, including any PILON which the Company is entitled to recover if payment was already made, other than amounts accrued as of the termination date in the event he is terminated for certain reasons for cause, including gross misconduct, serious breach of his employment agreement, gross negligence or incompetence and certain other requirements, as set forth in his employment agreement. In the event Dr. Goodwin is terminated for any reason, under most circumstances, the Company is required to reimburse him for any unused holiday entitlements. Following service of notice to terminate the employment by either party, which is required to be given with not less than three months’ prior written notice, the Company may place Dr. Goodwin on garden leave for the whole or part of the remainder of his employment. Under garden leave, Dr. Goodwin would receive his base salary for the period, but would not be entitled to receive any bonus or other incentive in respect of the period of garden leave. If Dr. Goodwin is terminated other than for misconduct, lack of capability or poor performance, or if Dr. Goodwin terminates employment in response to a fundamental breach of contract by the Company within 12 months following a change of control of the Company (as defined in the employment agreement), subject to certain conditions, Dr. Goodwin is entitled to (a) 12 months’ base salary, (b) the pro rata bonus Dr. Goodwin would have 49 received for the year in which his employment is terminated had he not been dismissed, but not including any pro rata bonus for a notice period which is not worked and (c) an amount equivalent to the cost to the Company of providing Dr. Goodwin with his other employment benefits for 12 months. Matthew Owens General Terms. Effective February 1, 2022, we entered into an employment agreement with Mr. Owens in connection with his appointment as our Chief Legal Officer and General Counsel. Mr. Owens’ employment agreement provides for an initial base salary of £300,000 ($371,130), which is subject to annual review and redetermination. In addition, Mr. Owens is entitled to participate in our executive variable cash compensation program. Pursuant to his employment agreement, Mr. Owens is eligible to earn an annual incentive bonus, with a target bonus amount of 40% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances). To assist with his relocation to the U.K., we agreed to pay a cash contribution towards housing costs of £10,000 ($12,371) per month through August 2023 and to provide tax advisory services in connection with the preparation and filing of tax returns for the first two tax years of his employment. Mr. Owens is also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time. His employment agreement also provides for a pension contribution equivalent to 8% of his monthly base salary. Payments upon Termination. The Company may, in its discretion, terminate Mr. Owens' employment at any time with immediate effect by providing notice to Mr. Owens that it is exercising its right and will make a Mr. Owens is subject to immediate termination and is not entitled to any further payment, including any PILON which the Company is entitled to recover if payment was already made, other than amounts accrued as of the termination date in the event he is terminated for certain reasons for cause, including gross misconduct, serious breach of her employment agreement, gross negligence or incompetence and certain other requirements, as set forth in her employment agreement. In the event Mr. Owens is terminated for any reason, under most circumstances, the Company is required to reimburse him for any unused holiday entitlements. Following service of notice to terminate the employment by either party, which is required to be given with not less than nine months’ prior written notice, the Company may place Mr. Owens on garden leave for the whole or part of the remainder of her employment. Under garden leave, Mr. Owens would receive his base salary for the period, but would not be entitled to receive any bonus or other incentive in respect of the period of garden leave. If Mr. Owens is terminated other than for misconduct, lack of capability or poor performance, or if Mr. Owens terminates employment in response to a fundamental breach of contract by the Company within 12 months following a change of control of the Company (as defined in the employment agreement), subject to certain conditions, Mr. Owens is entitled to (a) 12 months’ base salary, (b) the pro rata bonus Mr. Owens would have received for the year in which his employment is terminated had he not been dismissed, but not including any pro rata bonus for a notice period which is not worked and (c) an amount equivalent to the cost to the Company of providing Mr. Owens with his other employment benefits for 12 months. Ekaterina Malievskaia General Terms. In September 2020, we entered into an employment agreement with Dr. Malievskaia in connection with her continued employment as our Chief Innovation Officer. This employment agreement ended when Dr. Malievskaia stepped down from her executive officer role in June 2023. Once, she stepped down from her executive officer role, Dr. Malievskaia received compensation for her service on the board in accordance with our Director Compensation Policy. Dr. Malievskaia’s employment agreement 50 Michael Falvey General Terms Mr. Falvey's employment agreement provided for a initial base salary of $430,000, which was subject to annual review and redetermination. In addition, Mr. Falvey was entitled to participate in our executive variable cash compensation program. In his employment agreement, Mr. Flavey was eligible to earn an annual incentive bonus, with a target bonus amount of 45% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances) as determined by our Board of Directors in its Separation Agreement. We and Mr. Falvey entered into a separation agreement and release dated October 24, 2023, pursuant to which his employment 2020 Share Option and Incentive Plan In September 2020, we adopted the 2020 Plan. The 2020 Plan allows the Compensation and Leadership Development Committee to make equity-based and cash-based incentive awards to our officers, employees, directors and other key persons (including consultants). We have initially reserved 2,074,325 ordinary shares (the “Initial Limit”) for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by four percent of the outstanding number of ordinary shares on the immediately preceding December 31, or such lesser number of shares as determined by our Compensation and Leadership Development Committee (the “Annual Increase”). This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. The ordinary shares underlying any awards that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by us prior to vesting, satisfied without any issuance of shares, expire or are otherwise terminated (other than by exercise) under the 2020 Plan will be added back to the ordinary shares available for issuance under the 2020 Plan. The maximum aggregate number of shares that may be issued in the form of incentive share options shall not exceed the Initial Limit cumulatively increased on January 1, 2022 and on each January 1 thereafter by the lesser of the Annual Increase for such year or 2,074,325 ordinary shares. The 2020 Plan is administered by our Compensation and Leadership Development Committee. Our Compensation and Leadership Development Committee has full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants, and to determine the specific terms and conditions of each award, subject to the provisions of the 2020 Plan. Persons eligible to participate in the 2020 Plan will be those full or part-time officers, employees, non-employee directors and other key persons (including consultants) as selected from time to time by our Compensation and Leadership Development Committee in its discretion. The 2020 Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under Section 422 of the Code, options intended to qualify as U.K. tax advantaged options under our company share option plan, or CSOP, which is a sub-plan under the 2020 Plan and options that do not so qualify for any tax advantages. Other than the nominal cost options granted to non-U.S. tax persons in lieu of restricted share units, the option exercise price of each option will be determined by our Compensation and Leadership Development Committee but may not be less than 100% of the fair market value of our ordinary shares on the date of grant. The term of each option will be fixed by our Compensation and Leadership Development Committee and 51 may not exceed ten years from the date of grant. Our Compensation and Leadership Development Committee development committee will determine at what time or times each option may be exercised. Our Compensation and Leadership Development Committee may award share appreciation rights subject to such conditions and restrictions as it may determine. Share appreciation rights entitle the recipient to ordinary shares, or cash, equal to the value of the appreciation in our share price over the exercise price. The exercise price of each share appreciation right may not be less than 100% of the fair market value of the ordinary shares on the date of grant. Our Compensation and Leadership Development Committee may award restricted shares and restricted share units to participants subject to such conditions and restrictions as it may determine. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with us through a specified vesting period. Our Compensation and Leadership Development Committee may also grant ordinary shares that are free from any restrictions under the 2020 Plan. Unrestricted shares may be granted to participants in recognition of past services or other valid consideration and may be issued in lieu of cash compensation due to such participant. Our Compensation and Leadership Development Committee may grant cash bonuses under the 2020 Plan to participants, subject to the achievement of certain performance goals. The 2020 Plan provides that in the case of, and subject to, the consummation of a “sale event” as defined in the 2020 Plan, all outstanding awards may be assumed, substituted or otherwise continued by the successor entity. To the extent that the successor entity does not assume, substitute or otherwise continue such awards, then (i) all share options and share appreciation rights will automatically become fully exercisable and the restrictions and conditions on all other awards with time-based conditions will automatically be deemed waived, and awards with conditions and restrictions relating to the attainment of performance goals may become vested and non-forfeitable in connection with a sale event in the Compensation and Leadership Development Committee’s discretion and (ii) upon the effectiveness of the sale event, the 2020 Plan and all awards will automatically terminate. In the event of such termination, (i) individuals holding options and share appreciation rights will be permitted to exercise such options and share appreciation rights (to the extent exercisable) prior to the sale event, or (ii) we may make or provide for a cash payment to participants holding options and share appreciation rights equal to the difference between the per share cash consideration payable to shareholders in the sale event and the exercise price of the options or share appreciation rights (to the extent then exercisable). Our Board may amend or discontinue the 2020 Plan and our Compensation and Leadership Development Committee may amend the exercise price of options and amend or cancel outstanding awards for purposes of satisfying changes in law or any other lawful purpose but no such action may adversely affect rights under an award without the holder’s consent. Certain amendments to the 2020 Plan require the approval of our shareholders. No awards may be granted under the 2020 Plan after the date that is ten years from the date of shareholder approval. OUTSTANDING EQUITY AWARDS AT The following table sets forth information concerning the outstanding equity awards held by each of the named executive officers as of December 31,
(1) Market value has been computed in accordance with SEC rules as the number of unvested shares or units multiplied by the closing price per share of our ADSs on The Nasdaq Global Select Market as of December (2) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting 53 date. The vesting commencement date is August 1, 2022. This grant was awarded outside the 2020 Plan pursuant to the inducement grant exception under Nasdaq Listing Rule 5635(c). (3) Options vest over a 4 year service period in 48 equal monthly installments, subject to continued service through each applicable vesting date. The vesting commencement date is February 2, 2023. This grant was made under the 2020 Plan. (4) The restricted share units vest in four equal annual installments, subject to continued service through each applicable vesting date. The vesting commencement date is August 1, 2022. This grant was made under the 2020 Plan. (5) The restricted share units vest in four equal annual installments, subject to continued service through each applicable vesting date. The vesting commencement date is February 2, 2023. This grant was made under the 2020 Plan. (6) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is August (9) Options vest in four equal annual installments, subject to continued service through each applicable vesting date. The vesting commencement date is February 2, 2023. This grant was made under the 2020 Plan. (12) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is September 18, 2020. This grant was made under the 2020 Plan. (13) The restricted share units are subject to 25% vesting upon the earlier of (i) the one year anniversary of the date of grant, or (ii) the first day following the six-month anniversary of the listing of the Company’s ordinary shares on any stock exchange on which the closing price of the shares is 20% higher than the listing price for at least five consecutive trading days. They vest quarterly thereafter over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is August 12, 2021. This grant was made under the 2017 Plan. (14) Options vested over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is December 6, 2021. Pursuant to the terms of his separation agreement, the vesting was accelerated for 25% of the shares underlying this grant. This grant was made under the 2020 Plan. PAY VERSUS PERFORMANCE The following table shows the total compensation for each of our principal executive officers (each a "PEO") and the average compensation for our other named executive officers during the last
(1) Mr. Goldsmith served as our PEO throughout 2021 and during 2022 until July 31, 2022. (2) Mr. Nath served as our PEO beginning on August 1, 2022. (3) For fiscal 2023, our non-PEO named executive officers were Guy Goodwin, Matthew Owens, Ekaterina Malievskaia and Michael Falvey. For fiscal 2022, our non-PEO named executive officers were Matthew Owens and Ekaterina Malievskaia. For fiscal 2021, our non-PEO named executive officers were Ekaterina Malievskaia, Guy Goodwin, Piers Morgan (our former Chief Financial Officer) and Nate Poulsen (our former General Counsel). 54 (4) The 2023 compensation actually paid to our PEO and the average compensation actually paid to our non-PEO named executives reflects the following adjustments from total compensation reported in the Summary Compensation Table:
(5) The 2022 compensation actually paid to our PEO and the average compensation actually paid to our non-PEO named executives reflects the following adjustments from total compensation reported in the Summary Compensation Table:
Analysis of the Information Presented in the Pay Versus Performance Table We generally seek to incentivize long-term performance, and therefore do not specifically align our performance goals 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, we are providing the following descriptions of the relationships between information presented in the Pay Versus Performance table. Compensation Actually Paid and Net Loss As a Compensation Actually Paid and TSR As shown in the following graph, the compensation actually paid to our SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS Equity Compensation Plans Table The following table sets forth information as of December 31,
(1) The weighted average exercise price is calculated based solely on outstanding share options. (2) Includes the following plans: our 2020 Plan, our 2017 Plan and our Employee Stock Purchase Plan (“ESPP”). (3) The Company initially reserved 2,074,325 of its ordinary shares for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by up to 4% of the outstanding number of ordinary shares on the immediately preceding December 31, or such lesser number of shares as determined by our Compensation and Leadership Development Committee. This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. The total number of ordinary shares that may be issued under the 2020 Plan was 57 up to a total of 340,053 ordinary shares to participating employees. The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2022 and each January 1 thereafter through January 1, 2022, by the lesser of (i) 1% of the outstanding number of ordinary shares on the immediately preceding December 31 or (ii) 510,058 ordinary shares. The number of shares reserved under the ESPP is subject to change in the event of a share split, share dividend or other change in our capitalization. On October 1, 2021, the Company launched the Share Incentive Plan and the ESPP, through which employees can purchase shares at a discounted price. At the end of each six month purchase period, shares will automatically be purchased at the lower of the opening and closing price of the shares for the purchase period minus a 15% discount. (4) Amount does not include any purchase rights accruing under the ESPP during the current purchase period, which commenced on November 1, (5) On August 1, 2022, we granted a non-qualified share option to purchase an aggregate of 600,000 shares to Mr. Nath in connection with his appointment as Chief Executive Officer. In accordance with Nasdaq Listing Rule 5635(c)(4), the non-qualified share option award was approved by Compensation and Leadership Development Committee and made as a material inducement to Mr. Nath’s entry into employment as our new Chief Executive Officer. The non-qualified share option has a 10-year term and vests as to one-fourth on August 1, 2023 (the first anniversary of his employment commencement date) and as to the remaining three-fourths in equal monthly installments over the following 36 months, subject to Mr. Nath remaining an employee on the applicable vesting dates. The non-qualified share option has other terms that mirror those of non-qualified share options granted under our 2020 Plan and the standard form of non-qualified share option agreement. AUDIT AND RISK COMMITTEE REPORT The Audit and Risk Committee oversees the accounting and financial reporting processes of COMPASS Pathways plc (the “Company”) and the audits of the Company’s financial statements, evaluates auditor performance, manages relations with the Company’s independent registered public accounting firm and evaluates policies and procedures relating to internal control systems. The Audit and Risk Committee operates under a written Audit and Risk Committee charter that has been adopted by the Board of the Company (the “Board”). All members of the Audit and Risk Committee currently meet the independence and qualification standards for audit committee membership set forth in the listing standards provided by Nasdaq and the U.S. Securities and Exchange Commission (“SEC”), and the Board has determined that Annalisa Jenkins and Linda McGoldrick are “audit committee financial experts,” as the SEC has defined that term in Item 407 of Regulation S-K. The Audit and Risk Committee members are not professional accountants or auditors. The members’ functions are not intended to duplicate or to certify the activities of management and the independent registered public accounting firm. The Audit and Risk Committee serves a board-level oversight role in which it provides advice, counsel and direction to management and the auditors on the basis of the information it receives, discussions with management and the auditors, and the experience of the Audit and Risk Committee’s members in business, financial and accounting matters. The Audit and Risk Committee oversees the Company’s financial reporting process on behalf of the Board. The Company’s management has the primary responsibility for the financial statements and reporting process, including the Company’s system of internal controls. In fulfilling its oversight responsibilities, the Audit and Risk Committee reviewed with management the audited financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, The Audit and Risk Committee also reviewed with PricewaterhouseCoopers LLP (“PwC”), our independent registered public accounting firm, which is responsible for expressing an opinion on the conformity of the audited financial statements with accounting principles generally accepted in the United States of America, their judgments as to the quality and the acceptability of the Company’s financial reporting and such other matters as are required to be discussed with the Committee by Public Company Accounting Oversight Board (“PCAOB”) AU 380, Communications with Audit Committees, and SEC Regulation S-X Rule 207, Communication with Audit Committees. The Audit and Risk Committee has received the written disclosures and the letter from PwC required by the applicable requirements of the PCAOB regarding PwC’s communications with the audit committee concerning independence. The Audit and Risk Committee has discussed with PwC its independence from management and the Company. In addition to the matters specified above, the Audit and Risk Committee discussed with PwC the overall scope, plans and estimated costs of their audit. The Audit and Risk Committee met with PwC periodically, with and without management present, to discuss the results of PwC’s examinations, the overall quality of the Company’s financial reporting and PwC’s reviews of the quarterly financial statements, and drafts of the quarterly and annual reports. Based on the reviews and discussions referred to above, and subject to the limitations of the Audit and Risk Committee’s role and responsibilities referred to above and in the Audit and Risk Committee charter, Audit and Risk Committee recommended to the Board that the Company’s audited financial statements should be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
The information contained in this Audit and Risk Committee report shall not be deemed to be “soliciting material,” “filed” with the SEC, subject to Regulations 14A or 14C of the Exchange Act, or subject to the liabilities of Section 18 of the Exchange Act. No portion of this audit and risk committee report shall be deemed to be incorporated by reference into any filing under the Securities Act, or the Exchange Act, through any general statement incorporating by reference in its entirety the proxy statement in which this report appears, except to the extent that we specifically incorporate this report or a portion of it by reference. In addition, this Audit and Risk Committee report shall not be deemed filed under either the Securities Act or the Exchange Act. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table and related footnotes set forth information with respect to the beneficial ownership of our ordinary shares, as of •each beneficial owner of more than 5% of our ordinary shares; •each of our named executive officers and directors; and •all of our current executive officers and directors as a group. Beneficial ownership is determined in accordance with the rules and regulations of the SEC. Under these rules, beneficial ownership includes any shares as to which a person has sole or shared voting power or investment power. In computing the number of ordinary shares beneficially owned by a person and the percentage ownership of that person, ordinary shares subject to options, or other rights held by such person that are currently exercisable or will become exercisable within 60 days of Unless otherwise indicated, addresses of the directors, executive officers and named beneficial owners are in care of COMPASS Pathways plc, 3rd Floor, 1 Ashley Road, Altrincham, Cheshire WA14 2DT, United Kingdom.
* Represents beneficial ownership of less than one percent. (1) Based 61 (2) Consists of (i) 3,858,000 ordinary shares and (ii) 2,976,253 ordinary shares underlying outstanding warrants. The Warrants may not be exercised to the extent that doing so would result in the holder of the Warrants (together with the holder’s affiliates and any other persons acting as a group together with the holder or any of the holder’s affiliates) beneficially owning more than 9.99% of the shares of Ordinary Shares outstanding immediately prior to or after giving effect to such exercise (the “Ownership Limitation”). Based on a Schedule 13G filed with the SEC on August 28, 2023, by TCG Crossover Fund I, L.P. (“TCG Crossover I”), CG Crossover GP I, LLC ("TCG Crossover GP I"); TCG Crossover Fund II, L.P. ("TCG Crossover II"), TCG Crossover GP II, LLC (“TCG Crossover GP II”) and Chen Yu. TCG Crossover I is the record holder of (i) 964,500 of these ordinary shares and (ii) 964,500 of the shares underlying these outstanding warrants. TCG Crossover GP I is the general partner of TCG Crossover I and may be deemed to have voting, investment and dispositive power with respect to the securities held by TCG Crossover I. TCG Crossover II is the record holder of (i) 2,893,500 of these shares and (ii) 2,893,500 of the shares underlying these outstanding warrants. TCG Crossover GP II is the general partner of TCG Crossover II and may be deemed to have voting, investment and dispositive power with respect to the securities held by TCG Crossover II. Chen Yu is the sole managing member of TCG Crossover GP I and TCG Crossover GP II and may be deemed to share voting, investment and dispositive power with respect to these securities. Each of TCG Crossover GP I, TCG Crossover GP II and Chen Yu disclaim beneficial ownership except to the extent of their pecuniary interest therein. The address for individual and entities listed above is 705 High Street, Palo Alto, California 94301. (3) Represents (i) (4) Represents March 27, 2024. Mr. Goldsmith and Dr. Malievskaia are married but they expressly disclaim beneficial ownership of each other’s shares in the Company. Pursuant to the terms of call option agreements dated May 19, 2020, as amended and restated on July 21, 2020, as further amended and restated on September 9, 2020, and as further amended effective February 15, 2023, Lars Christian Wilde, a former co-founder of the Company, has an option to purchase 776,565 of our ordinary shares for an exercise price of less than £0.01 per share from each of Mr. Goldsmith and Dr. Malievskaia, exercisable at any time following our initial public offering until September 9, 2033. (5) Represents (6) Represents (i) (7) Represents (i) (8) Represents (i) (9) Represents 11,556 ordinary shares underlying options to purchsae ordinary shares from the Company exercisable within 60 days after March 27, 2024. (10) Represents (i) 89,049 ordinary shares and (ii) (11) Represents (12) Represents (i) 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC and (ii) 62 within 60 days after (13) Represents (14) Represents (1) Represents (i) 1,733,882 ordinary shares, (ii) 2,968 ordinary shares issuable upon the settlement of RSUs releasable within 60 days of March 27, 2024 and (iii) 1,222,463 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after March 27, 2024 held by our current officers and directors. DELINQUENT SECTION 16(a) REPORTS Under Section 16(a) of the Exchange Act, directors, executive officers, our principal accounting officer and beneficial owners of 10% or more of our common stock, or reporting persons, are required to report to the SEC on a timely basis the initiation of their status as a reporting person and any changes with respect to their beneficial ownership of our common stock. Based solely on our review of copies of such forms that have been filed with the SEC, or written representations from reporting persons, we believe that during the fiscal year ended December 31, requirements. CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH RELATED PERSONS Other than the compensation arrangements described above under the sections “Director Compensation” and “Executive Compensation” and the transactions described below, in the period from January 1, AGREEMENTS WITH OUR EXECUTIVE OFFICERS AND DIRECTORS We have entered into employment agreements with our executive officers, a separation agreement with Michael Falvey and service agreements with our non-executive directors. These agreements contain customary provisions and representations, including confidentiality, non-competition, non-solicitation and inventions assignment undertakings by the executive officers. However, the enforceability of the non-competition provisions may be limited under applicable law. FAMILY RELATIONSHIPS George Goldsmith, our co-founder and former chief executive officer and Board Chair, is married to Ekaterina Malievskaia, our co-founder and former Chief Innovation Officer and INSURANCE AND INDEMNIFICATION To the extent permitted by the Companies Act 2006 and in accordance with our Articles of Association, we are empowered to indemnify our directors against any liability they incur by reason of their directorship. We maintain directors’ and officers’ insurance to insure such persons against certain liabilities. We also enter into a deed of indemnity with each of our directors and executive officers. These agreements and our Articles of Association require us to indemnify our directors and executive officers to the fullest extent permitted by law. RELATED PARTY TRANSACTION POLICY We have adopted a related party transaction policy. Pursuant to this policy, the Audit and Risk Committee has the primary responsibility for reviewing and approving or disapproving “related party transactions,” which are transactions between us and related parties in which the related party has a direct or indirect material interest. For purposes of this policy, a related party is defined as a director, executive director, nominee for director, or greater than 5% beneficial owner of any class of our voting securities, and their immediate family members. DELIVERY OF PROXY MATERIALS Our EACH ORDINARY SHAREHOLDER IS URGED TO COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY FORM. EACH ADS HOLDER IS URGED TO COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ADS PROXY CARD TO CITIBANK, N.A., THE DEPOSITARY FOR THE ADSs. ADDITIONAL INFORMATION U.K. STATUTORY ANNUAL ACCOUNT AND REPORTS OF THE BOARD OF DIRECTORS AND AUDITORS OF COMPASS PATHWAYS PLC FOR THE YEAR ENDED DECEMBER 31, Consistent with its obligations under the U.K. Companies Act 2006, our Board will present at the AGM our U.K. statutory annual accounts and reports for the year ended December 31, SHAREHOLDERS' RIGHT TO CALL A GENERAL MEETING Our shareholders have the right to call a meeting of our shareholders. The U.K. Companies Act 2006 generally requires the directors to call a general meeting once we have received requests to do so from shareholders representing at least 5% of our paid-up shares entitled to vote at a general meeting. The U.K. Companies Act 2006 generally prohibits shareholders of a U.K. public limited company from passing written resolutions. However, significant shareholders would, in any case, still have the power to call a general meeting and propose resolutions. These provisions are mandatory under the U.K. Companies Act 2006 and cannot be waived by our shareholders. SHAREHOLDER PROPOSALS Pursuant to Rule 14a-8 under the Exchange Act, in order to be considered for inclusion in our proxy statement for our Under Section 338 of the U.K. Companies Act 2006, shareholders representing at least 5% of holders entitled to vote on a resolution at an annual general meeting may require the Company to include such resolution in its notice of an annual general meeting. Provided the applicable thresholds are met, notice of the resolution must be received by the Company at the Office of the Company Secretary, 3rd Floor, 1 Ashley Road, Altrincham, Cheshire, WA14 2DT, United Kingdom at least six weeks prior to the date of the annual general meeting, or, if later, at the time notice of the annual general meeting is delivered to shareholders. QUESTIONS? If you have any questions or need more information about the AGM please write to us at: Ben Harber Company Secretary COMPASS Pathways plc 3rd Floor 1 Ashley Road Altrincham Cheshire WA14 2DT United Kingdom Annex A DIRECTORS’ REMUNERATION REPORT This part of the Remuneration Report sets out the Key considerations when determining the Policy The Policy was designed by the Committee with a number of specific principles in mind: •attract, retain and motivate high •encourage a corporate culture that promotes the highest level of integrity, teamwork and ethical standards; •be competitive against appropriate market benchmarks (being predominantly the US biotech sector) and have a strong link to performance, providing the ability to earn above-market rewards for strong performance; •be simple and understandable, both internally and externally; •encourage increased equity ownership to motivate executives in the overall interests of shareholders, the Company, employees and •take due account of good governance and promote the long-term success of the Company. A-1 In seeking to achieve the above objectives, the Committee is mindful of the views of a broad range of stakeholders in the business and accordingly takes account of a number of factors when setting remuneration including: market conditions; pay and benefits in relevant comparator organisations; terms and conditions of employment across the Company; the Company’s risk appetite; the expectations of institutional shareholders; the Nasdaq or SEC. In The Directors identify any conflicts of interest at the beginning of each Board meeting and the beginning of each Committee meeting. Mr. Goldsmith who served as The Key Changes to the Policy The Committee maintains that the overall structure of remuneration is appropriate and no fundamental structural changes are proposed. The key changes to the Policy reflect developments in market and best practices, including: •establishing the maximum annual bonus payable to an Executive Director at 100% of base salary for each Executive Director; 2 •providing flexibility for annual bonus to be payable in cash or shares, at the discretion of the Committee; •establishing for purposes of the UK pension scheme that maximum contribution, cash supplement (or combination thereof) payable to an Executive Director at 5% of base salary or such lesser level as is available to the general workforce; and •introduction of new Compensation Recovery Policy, which was adopted by the Company to comply with the mandatory compensation "clawback" requirements under applicable Nasdaq listing rules. The Policy for Executive Directors During The total remuneration for the Executive Directors is made up of the following elements: •salary; •benefits; •annual bonus; •long-term incentive awards; and •Pension/401k contribution. 3 Nasdaq IPO, the Company has issued equity under these plans and has issued an inducement grant, on such terms as are defined under applicable
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The Committee operates the annual bonus and 2020 Plan, in accordance with their rules, and where relevant, 6.to make certain exceptions to the Compensation Recovery Policy (to the extent permitted under applicable Nasdaq listing rules) and to determine whether to recover, and if so, the method for recovering, erroneously awards compensation from current and former Executive Directors in the event of an accounting restatement. In certain exceptional circumstances, such as a material acquisition/divestment of a Group business or a change in the broader business environment, which mean the original performance conditions are no 7 longer appropriate, the Committee may adjust the objectives, alter weightings or set different measures as necessary, to ensure the conditions achieve their original purpose and are not materially less difficult to satisfy. The Directors' service contracts and letters of appointment are kept for inspection at the Company's registered office. The Company has a classified Board with each Director serving a three-year term; each Director must seek re-election at the annual general meeting of shareholders at the end of his or her three-year term. Historical equity incentive awards Awards which were granted prior to 18 September 2020 are disclosed separately in this Remuneration Report in the Statement of Directors’ Shareholding and Share Interests section. These awards remain eligible to vest, based on their original terms which are described separately in the Directors' Remuneration Report. Annual bonus The annual bonus is designed to drive the achievement of the Company’s strategic and corporate objectives. These targets are agreed by the Board and selected because of their importance in value creation for shareholders. Objectives are weighted for Executive Directors in proportion to the degree of importance of that objective for the Company. The weightings are agreed by the Committee. Remuneration on recruitment The remuneration package for any new Executive Director will be determined by the Committee in accordance with the terms of the Policy at the time of appointment (including salary, benefits, annual bonus, long-term incentive awards and pension). It is recognised that in order to attract and recruit talented individuals the Policy needs to allow sufficient flexibility with respect to remuneration on recruitment. The following policies apply to the remuneration on recruitment of new Executive Directors: 8 Salary: Base salary will be determined based on the responsibilities of the role, experience of the individual and current market rates. It may be considered necessary to appoint a new Executive Director on above or below market rates (e.g. to reflect limited Board experience). In such circumstances, phased increases above those of the wider workforce may be required over an appropriate time period, to bring the salary to the desired market level, subject to the continued development in the role. Annual bonus: The ongoing annual bonus maximum will be in line with that outlined in the policy table for existing Executive Directors, Long-term incentive awards: 2020 Plan awards are granted in line with the policy outlined for existing Executive Directors. An initial award may be made on the date of appointment or shortly following an appointment. For internal appointments, existing awards will continue on their original terms. Benefits: Benefits provided should be in line with those of existing Executive Directors. For external and internal appointments, where required to meet business needs, reasonable relocation support will be provided. In addition, if it becomes necessary to appoint a new Executive Director from outside the UK, additional benefits may be provided to reflect local market norms or legislation. Pension/ Sign-on payments and buy-out awards: To enable the recruitment of exceptional talent, the Committee may offer additional cash and/or share-based remuneration to take account of and compensate for remuneration that the Executive Director is required to relinquish when leaving a former employer. The Committee will seek to structure any such replacement awards to be no more generous overall in terms of 9 quantum or vesting than the award to be forfeited from the previous employer and will take into account the timing, form and performance requirements of the awards forgone. Where appropriate, any long-term incentive awards will be granted under the 2020 Plan, however, the Committee will have discretion to make use of the flexibility to make awards under any relevant exemptions in the For an internal Executive Director appointment, any variable pay element awarded in respect of the prior role will be allowed to pay out according to its terms. In addition, any other contractual remuneration obligations existing prior to appointment may continue. The fees for any new Policy for payments on loss of office The Company does not have a policy of fixed term employment contracts, however, the Directors are required to retire and are entitled to put themselves forward for re-election at the AGM in accordance with their respective Director class, as prescribed by the Company’s articles of association (“Articles of Association”). The notice period for the current Chief Executive Officer’s employment contract is 90 days, provided however, that if the Company terminates his employment contract without cause, the Chief Executive Officer is entitled to a cash severance payment equal to one year’s annual salary plus the target annual bonus amount for the year in which such termination The Committee’s approach to payments in the event that an Executive Director’s employment is terminated is to take account of the individual circumstances including the reason for termination, 10 individual performance, contractual obligations, potential claims the Executive Director might have against the Company and the terms of the equity incentive plans in which the Executive Director participates. Termination by notice from the Company: up to 12 months’ notice, with the discretion for the Committee to make a payment in lieu of notice for base salary, pension and other benefits that would otherwise have been paid during the notice period. Annual bonus: except for the current Chief Executive Officer who is entitled to his target annual bonus in the event his employment is terminated by the Company without "cause" (as defined in his employment agreement) or by the Chief Executive Officer for "good reason" (as defined in his employment agreement), there is no automatic contractual entitlement to bonus or pro-rata bonus on termination, although this may be considered at the discretion of the Committee. Long-term incentives: whether any long-term incentive awards would vest and be exercisable upon loss of office would be subject to the relevant plan rules under which such award was granted. The 2020 Plan allows vesting and exercise of awards in the event of death, retirement, ill-health, injury, redundancy and any other reason at the discretion of the Committee. The Committee retains discretion to determine the extent to which the award will vest, taking into consideration the circumstances. Unvested awards normally lapse, although the Committee retains the power to determine, in accordance with the “good leaver” provisions of the relevant plan rules, what proportion of unvested awards will be retained and what proportion will lapse. In determining this, the Committee will give consideration to the reason for leaving, the extent of achievement of performance objectives at the date of leaving and may decide to pro-rate awards. Change of Control: on a change of control, all unvested awards vest on the date of change of control. Change of control provisions in the former Chief Innovation Officer’s 11 including by way of constructive dismissal) less any sums paid by way of notice or payment in lieu of notice. The former Chief Innovation Officer's employment agreement ended in June 2023 when she stepped down from her executive role. Additional payments: the Committee reserves the right to make payments it considers reasonable under a settlement agreement, including payment or reimbursement of reasonable legal and professional fees, untaken holiday and any payment for the settlement of potential claims against the Company in the UK or other jurisdictions. Payment or reimbursement of reasonable outplacement fees may also be provided. Compensation Recovery Policy During 2023, we adopted our Compensation Recovery Policy designed to comply with the mandatory compensation “clawback” requirements under Nasdaq rules that became effective as of 1 December 2023. Under this policy, in the event of certain accounting restatements, we will be required to recover erroneously received incentive compensation tied to a financial reporting measure (including measures related to stock price and total shareholder return) from our Executive Directors. The amount of erroneously awarded compensation to be recovered shall equal the excess of the amount actually received over the amount that would have been received had the financial statements been correct in the first instance. Where the financial reporting measure is related to stock price or total shareholder return, the Committee shall make a reasonable estimate of the effect of the accounting restatement upon the stock price or total shareholder return and the amount of the compensation to be recovered. The Committee also has the discretion to make certain exceptions to the Compensation Recovery Policy (to the extent permitted under applicable Nasdaq listing rules) and to determine whether to recover, and if so, the method for recovering, erroneously awarded compensation from current and former Executive Directors in the event of an accounting restatement. Currently, none of the incentive compensation payable to our Executive Directors is based on a financial reporting measure and therefore none of our current compensation is subject to recovery under this policy. 12 The Directors' service contracts are available for inspection at the Company's The Policy for the The Board approves fees payable to the The Policy for the Chief Executive Officer (CEO) The Board approves any compensation paid to the Chief Executive Officer The Policy for Non-Executive Directors The Board approves the fees payable to the Company’s non-Executive Directors.
14 Statement of consideration of employees’ pay and remuneration conditions elsewhere in the Group The Company does not formally consult with employees when drawing up the Policy. However, the Committee is made aware of employment conditions in the wider Group. The same broad principles apply to the Policy both for the Executive Directors and the wider employee population. However, the remuneration for the Executive Directors has a stronger emphasis on variable pay than for other employees. In particular, the following approach is used for the wider employee population in the Group: •Salaries, benefits and pensions or matching contributions under our 401(k) plan, as applicable, are compared to appropriate market rates and set at approximately mid market level with allowance for role, responsibilities and experience. •When setting salary levels for the Executive Directors, the Committee considers the salary increases provided to other employees. •An annual bonus plan is available to all employees and is based on business and individual performance. Payments under the bonus plan are entirely discretionary. 15 ANNUAL REPORT ON REMUNERATION Single total figure of remuneration of each Director (audited). The Directors received the following remuneration for the years ended 31 December
* 1George Goldsmith served as chief executive officer until 1 August 2022, he served as Executive Chair from 1 August 2022 until 31 December 2022 and he was appointed as Non Executive Director, effective from 1 January 2023. 2Ekaterina Malievskaia was appointed as Non Executive Director, effective from 17 June 2023. 3 Daphne Karydas was appointed as Non Executive Director, effective 18 September 2023. Her remuneration has been pro-rated above. **Relates to health insurance, life assurance, income protection insurance, pension/401(k) contributions, and housing allowance. Our Chief Executive Officer received $376,155 in compensation during 2023, which includes a housing allowance of $104,471 and a one-time cash contribution towards moving and relocation costs of $250,000. Our Chief Executive Officer also received $12,207 in 401(k) contributions and $3,600 in relation to health savings account contributions and $5,876 in relation to tax advice paid by the company on his behalf during 2023.i) No Director is currently in receipt of a pension contribution. Each Director is either not entitled to a pension payment or has opted out of receiving it. There Illustrations of Base Case, Expected and Maximum remuneration for the Executive Scenarios The charts set out for illustrative purposes only, what annual remuneration the Company expects the Executive The assumptions used in the calculations are set out below:
1)Base case: this illustration assumes a fixed base case, as set out above. This illustration assumes no annual bonus; 2)Expected case: this illustration assumes the base case remuneration set out above, plus an annual bonus. We make the assumption that The Group has used the exchange rate Annual performance bonus In During a series of meetings in December 2023 and January 18 Director individual performance. The Compensation and Leadership Development Committee reviewed the following corporate goals and based on the results approved an overall average The goals were as follows: Corporate Goals and Achievements • • •Strengthened balance sheet through equity and debt financings raising gross proceeds of approximately $185 million with potential additional gross proceeds of approximately $160 million dependent upon full exercise of warrants for cash; •Expanded shareholder base and attracted new leading biotech investors; •Took key steps to prepare for a successful and scalable commercial launch of COMP360 treatment, if regulatory approval is obtained, that will support access for as many patients as possible, including applying for CPT III code to cover in-person drug monitoring services associated with the administration of psychedelic drugs and entering into research collaborations with Greenbrook and Hackensack; •Progressed development of a pipeline of new drug and technology assets to increase the value of •Developed a high-performing team and a mission-driven organisation committed to the highest standards of quality and compliance. 19 Long term incentive awards during the year ended 31 December During the Payments to past Directors (audited) There were no payments to past Directors made during the financial year ending 31 December Payments for Loss of Office (audited) There were no payments made to Directors for Loss of Office during the financial year ending 31 December 20 Statement of Directors’ Shareholding and Share Interests (audited) The Company does not have a formal policy on Executive or Non-Executive Director shareholdings. The table below details the total number of shares owned (including their beneficial interests), the total number of share options held, the number of share options vested but not yet exercised and the total number of RSUs held as at 31 December
*Includes 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares.
*Includes 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares. The interests of the Directors in the Company’s share options and RSUs as at 31 December
(1) Price per share has been updated from 16.85 to 17.00 due to an error in the disclosure in 2022. (2) Price per share has been updated from 0.01 to N/A due to an error in the disclosure in 2022. (3) Price per share has been updated from 1.40 to 1.32 due to an error in the disclosure in 2022. (4) Price per share has been updated from 2.40 to 2.26 due to an error in the disclosure in 2022. (5) Price per share has been updated from 9.44 to 9.41 due to an error in the disclosure in 2022. (6) Price per share has been updated from 32.66 to 33.83 due to an error in the disclosure in 2022. (7) Price per share has been updated from 35.25 to 35.30 due to an error in the disclosure in 2022. 22 All options are subject to service rather than performance conditions. The options vest monthly over 4 years with a 1 year 25% cliff for those granted the one-year anniversary of the date of grant or the date of the 2024 annual general meeting of shareholders.. The beneficial interests in the Company’s shares of the Directors and their families were as follows:
*Represents beneficial ownership of less than one percent. **Includes 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares. ***Mr. Goldsmith and Dr. Malievskaia are married but they expressly disclaim beneficial ownership of each other’s shares in the Company and do not include their spouse's shares in the number of shares beneficially owned in the table above. Pursuant to the terms of call option agreements dated 19 May 2020, as amended and restated on 21 July 2020, as further amended and restated on 9 September 2020, and as further amended effective 15 February 2023, Lars Christian Wilde, a former co-founder of the Company, has an option to purchase 776,565 of our ordinary shares for an exercise price of less than £0.01 per share from each of Mr. Goldsmith and Dr. Malievskaia, exercisable at any time following our initial public offering until 9 September 2033. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission, or SEC. These rules generally attribute beneficial ownership of securities to persons who 23 possess sole or shared voting power or investment power with respect to those securities and include ordinary shares that can be acquired within 60 days of 31 December Total Shareholder Return for Compass Pathways American Depositary Shares The graph below shows the Company’s performance, measured by total shareholder return, for the Company’s American Depositary Shares (“ADSs”), which are listed on Nasdaq and each representing one of the Company’s ordinary shares against the Nasdaq Composite Index (Nasdaq: CMPS vs NCI) and the Nasdaq Biotech Index (Nasdaq: CMPS vs NBI). We have selected these indices for this comparison because the Company has been admitted to trading on the Nasdaq exchange and operates as a Biotech and we consider them to be the most suitable comparator indices. 24 Chief Executive Officer total remuneration history 2020 was the first year that the Company prepared a Remuneration Report. We have taken the exemption not to disclose 5 years of history of remuneration and have chosen to disclose remuneration history for 2020 onwards. Percentage change in remuneration of the Executive and Non-Executive Directors The year on year movement to 31 December
*Represents Kabir Nath **Represents George Goldsmith The year on year movement to 31 December
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*Represents Kabir **Represents George Goldsmith ***Represents Ekaterina Malievskaia 1.None of the Non-Executive Directors are eligible for an annual bonus and none claimed any benefits during the year. 2. 3.Effective 1 4. 5.Effective 18 September 2023, Daphne Karydas joined as Non-Executive Director. 6.The employee % change compares the total prorated remuneration earned by all employees in 2023 versus 2022. Relative importance of spend on pay The Committee considers the Company’s research and development expenditure relative to remuneration expenditure for all employees, to be the most appropriate metric for assessing overall spend on pay due to the nature and stage of the Company’s business. Dividend distribution comparators have not been included as the Company has no history of such transactions. The graph below illustrates the gross remuneration to all employees compared to research and development expenditure in 26 trials for the treatment of TRD and into trials for other indications, as well as developing other neuropsychiatric therapies. Structure and Role of Committee and Approach to Remuneration Matters The Committee is comprised of Annalisa Jenkins, who chairs the Committee, David Norton and Wayne Riley. The constitution of the Committee is in compliance with Nasdaq requirements. The members of the Committee are Independent Directors as defined in Rule 10C-1 under the US Securities Exchange Act of 1934 and under applicable The Committee’s approach to remuneration matters is to enable the Company to attract and retain talent, incentivise long-term value generation and effectively manage the Company’s cash resources. It is the belief of the Committee that this is best achieved through a greater emphasis on variable rather than fixed remuneration, comprised of a mix of base salary and benefits, along with the flexibility to appropriately reward and incentivise with variable pay and longer term incentives, as described within the Policy. When applying the Policy to Executive Directors, the Committee seeks to comply with the QCA Code so far as it is practical to do so, having regard to the size, nature and business requirements of the Company. Operation of the Policy will largely be compliant with the remuneration elements of the QCA Code, but we are aware that in certain instances we will differ from the QCA Code. These instances reflect differences in US market practice when compared to the UK, and the need to balance our governance obligations against the importance of offering competitive remuneration packages in the markets in which we compete and operate. The terms of reference of the Committee can be found on our website at External advice During the year, the Company engaged Aon Solutions UK Limited (Aon) to support management and the Committee with advice on remuneration matters, in particular peer-group benchmarking of Director and Senior Management remuneration and the grant of long term equity incentives under the 2020 Plan that became effective on the day prior to the listing of our ADSs on Nasdaq. The consultants were appointed by the Committee. The 28 Aon is a leading global professional services firm and the Board confirm no conflicts of interest before each meeting. During Aon. Proposed Application of the Policy for the Year Ending 31 December CEO remuneration With effect from 1 January The target bonus for Mr. Nath for the Long term incentives for Mr Goldsmith serves as Non-Executive Director cash fees Non-Executive Directors are paid a basic fee. In addition to the basic fee, committee fees may be paid for service as Lead Independent Director, chairing or membership of a Board Non-Executive Directors are eligible to receive the following annual fees:
* ** 30 Note: Chair and committee member retainers are in addition to retainers for members of the Board of Directors. In accordance with the Company's Articles of Association, Directors are allocated into one of three classes. Each class of Directors serves a staggered three-year term. At each annual general meeting, the successors of Directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. Directors of the class retiring at the annual general meeting shall be eligible for re-appointment by ordinary resolution at such annual general meeting. Details of
*George Goldsmith and Ekaterina Malievskaia provided notice that they will resign from the Board effective 29 March 2024 The information in this part of the Remuneration Report is not subject to audit. Directors’ Remuneration Policy This remuneration policy will be submitted for approval by shareholders in a binding vote at the AGM scheduled for 9 May 2024. Statement of consideration of shareholder views The Compensation and Leadership Development Committee will consider any shareholder feedback received and ongoing shareholder feedback throughout the year, when reviewing and applying the Policy each year. The guidance from shareholder representative bodies is also considered on an ongoing basis. The Committee submits its Directors’ remuneration report for a non-binding, advisory vote of shareholders at its annual general meeting of shareholders. At the 2023 annual general meeting of shareholders, 98.27% of shareholders voted in favor of the proposal to receive and approve, as a non-binding advisory resolution, the Directors’ Remuneration Report for the year ended 31 December 2022, with 1.73% voting against such proposal. 32 Although non-binding, the Compensation and Leadership Development Committee will review and consider the voting results when making future decisions regarding our Director remuneration program. The attendees of the Compensation and Leadership Development Committee meetings in 2023 were as follows:
*David York Norton attended 4 of 5 meetings due to scheduling conflicts. 33 FORM OF PROXY FOR ORDINARY SHAREHOLDERS | December 31, 2021 ( (1) “Audit Fees” consist of fees billed for the audit of our annual consolidated financial statements and statutory accounts. (2) “Audit-related” fees consist of fees in connection with the review of our interim consolidated financial statements. (3) “Tax Fees” consist of fees billed for tax planning advice in respect of intercompany arrangements and structuring in connection with both our initial public offering (“IPO”) and ongoing operations. (4) “All Other Fees” consist of non-audit fees paid to PwC for advisory services in relation to fundraising and registration statements filed with the SEC. The Audit and Risk Committee has determined that the rendering of non-audit services by PwC is compatible with maintaining the principal accountant’s independence. Pre-Approval Procedures The Audit and Risk Committee pre-approves all audit and permissible non-audit services provided by the independent registered certified public accounting firm unless an exception to such pre-approval exists under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or the rules of the SEC. These services may include audit services, audit-related services, tax services and other services. Our Audit and Risk Committee has pre-approved all services performed by the independent registered public accounting firm since the pre-approval policy was adopted prior to our initial public offering. REQUIRED VOTE The ratification of the selection of PwC as our independent registered public accounting firm requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. This vote is advisory and non-binding. Abstentions and broker non-votes, if any, RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, PROPOSAL Proposal 7 authorizes the Audit and Risk Committee to determine our auditors’ remuneration for the fiscal year ending December 31, The Audit and Risk Committee is directly responsible for the appointment, retention and termination, and for determining the compensation of the Company’s independent registered public accounting firm. The Audit and Risk Committee shall pre-approve all auditing services and the terms thereof and non-audit services (other than non-audit services prohibited under Section 10A(g) of the Exchange Act or the applicable rules of the SEC or the Public Company Accounting Oversight Board (“PCAOB”)), except that pre-approval is not required for the provision of non-audit services if the “de minimis” provisions of Section 10A(i)(1)(B) of the Exchange Act are satisfied. The Audit and Risk Committee may delegate to the chairperson of the Audit and Risk Committee the authority to grant pre-approvals for audit and non-audit services, provided such approvals are presented to the Audit and Risk Committee at its next scheduled meeting. All services provided by PwC during fiscal year REQUIRED VOTE The authorization of the Audit and Risk Committee to determine auditor remuneration requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” the authorization of our Audit and Risk Committee to determine our auditors’ remuneration for the fiscal year ending December 31, PROPOSAL At the Meeting, our Board will present our U.K. statutory annual accounts and reports for the period January 1, REQUIRED VOTE The receipt of the U.K. statutory annual accounts and reports requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” the resolution to receive our U.K. statutory annual accounts and reports. PROPOSAL Our U.K. statutory directors’ remuneration report is set forth as Annex A to this Proxy Statement. The directors’ remuneration report includes the annual report on remuneration. This document describes in detail our remuneration policies and procedures and explains how these policies and procedures help to achieve our compensation objectives with regard to our directors and the retention of high-quality directors. Our Board and our Compensation and Leadership Development Committee believe that the policies and procedures as articulated in the directors’ remuneration report are effective and that as a result of these policies and procedures we have and will continue to have high-quality directors. Our Board has approved and signed the report in accordance with English law. At the Meeting, the shareholders will vote on the annual report on remuneration. This vote is advisory and non-binding. Although non-binding, our Board and Compensation and Leadership Development Committee will review and consider the voting results when making future decisions regarding our director remuneration program. Following the Meeting, and as required under English law, the directors’ annual report on remuneration will be delivered to the U.K. Registrar of Companies. REQUIRED VOTE The approval of our U.K. statutory directors’ annual report on remuneration requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. This vote is advisory and non-binding. Abstentions and broker non-votes, if any, RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” approval of our U.K. statutory directors’ annual report on remuneration set forth in Annex A. PROPOSAL 9—APPROVAL OF OUR U.K. STATUTORY DIRECTORS' REMUNERATION POLICY Our U.K. statutory directors’ remuneration policy is set forth as Annex A to this proxy statement. Our directors’ remuneration policy is used to determine the remuneration for our directors, including our Chief Executive Officer (our sole executive director). The policy has as its key objective the engagement and retention of high-quality directors. The last approved remuneration policy was approved by the shareholders at our 2021 annual general meeting and the new remuneration policy is proposed for approval at this AGM, as required by the U.K. Companies Act 2006. As set forth in Annex A, we submit our new proposed remuneration policy, which our Board of Directors has determined is competitive and consistent with current market practices. The proposed policy is largely similar to our previously approved policy, but includes the following material changes. •The proposed policy sets the maximum annual bonus payable to an Executive Director to 100% of his or her annual base salary and provides that the bonus amount may be paid in cash or shares, at the Compensation and Leadership Development Committee's election. •The proposed policy provides that the maximum pension or retirement contribution, cash supplement (or combination thereof) payable by the Company shall be up to 5% of base salary, or such lesser percentage which is available to the general workforce. •The proposed policy includes compensation recovery provisions, which are designed to comply with the mandatory compensation “clawback” requirements under Nasdaq rules that became effective as of October 2, 2023. Under the policy, in the event of an accounting restatement, we will be required, subject to limited impracticability exceptions, to recover erroneously received incentive‑based compensation from our current or former executive officers representing the excess of the amount actually received over the amount that would have been received had the financial statements been correct in the first instance. 18 Our Board of Directors has approved the directors’ remuneration policy and believes it is effective to achieve its objectives. The directors’ remuneration policy, if approved, will take effect immediately upon conclusion of this Meeting and will remain valid until replaced by a new or amended policy (expected to occur at the 2027 annual general meeting of the Company). Further information about the policy is available at “Director Remuneration” and the policy is set forth as of Annex A to this proxy statement. REQUIRED VOTE The approval of our U.K. statutory directors’ remuneration policy requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, are not counted in the calculation of votes for or against this proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” approval of our U.K. statutory directors’ remuneration policy set forth in Annex A. 19 PROPOSAL 10—ADVISORY (NON-BINDING) VOTE TO APPROVE THE COMPANY’S EXECUTIVE COMPENSATION Section 14A of the Exchange Act requires that we provide our shareholders with the opportunity to vote to approve, on a non-binding, advisory basis, not less frequently than once every three years, the compensation of our named executive officers. Based on the voting results of the vote on the frequency of future votes on executive compensation at our 2022 Our compensation programs are designed to effectively align our executives’ interests with the interests of our shareholders by focusing on long-term equity incentives that correlate with the growth of sustainable long-term value for our shareholders. Shareholders are urged to read the section titled “Executive Compensation” in this Proxy Statement, which discusses our executive compensation policies and practices and contains tabular information and narrative discussion about the compensation of our named executive officers for the year ended December 31, The vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the compensation of our named executive officers, as described in this Proxy Statement in accordance with the compensation disclosure rules of the SEC. Accordingly, we are asking our shareholders to vote on the following resolution at the Meeting: RESOLVED, that the shareholders hereby approve, on a non-binding advisory basis, the compensation paid to the Company’s named executive officers, as disclosed in the Company’s Proxy Statement for the REQUIRED VOTE The approval of this advisory non-binding proposal requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, The vote is advisory, which means that the vote is not binding on the Company, our Board or our Compensation and Leadership Development Committee. To the extent there is any significant vote against our named executive officer compensation as disclosed in this Proxy Statement, our Compensation and Leadership Development Committee will evaluate whether any actions are necessary to address the concerns of shareholders. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” the approval, on a non-binding advisory basis, of the compensation of our named executive officers, as disclosed in this Proxy Statement. PROPOSAL 11—AUTHORIZATION OF ALLOTMENT OF SHARES Under the U.K. Companies Act 2006, our Board of Directors cannot allot shares in the Company unless they are authorized to do so by our shareholders at a general meeting. The Directors currently have an existing authority to allot shares in the Company and to grant rights to subscribe for or convert securities into shares in the Company. This authority was granted to the Directors prior to our initial public offering in September 2020 and was in respect of a maximum aggregate nominal amount of up to £536,000 (the "Existing Authority"). The Existing Authority remains unexercised in respect of approximately 43% of the Company’s issued ordinary share capital; however 37% is allotted and reserved for future issuances under outstanding warrants and under 20 outstanding equity awards and in connection with future awards under our equity compensation plans . This Proposal 12 is an ordinary resolution to seek a new authority, in addition to such subsisting amounts under the Existing Authority. Proposal 12 proposes that the Board of Directors are granted authority to allot new shares or to grant rights to subscribe for or to convert any security into shares in the Company up to a maximum aggregate nominal amount of £820,100, which represents approximately 150% of the Company's issued ordinary share capital. If approved by shareholders, this authority will expire on May 8, 2029. If shareholders do not approve Proposal 12, the subsisting amounts under the Existing Authority granted at the time of the Company's initial public offering will continue to apply until September 10, 2025 or until such earlier time as it has been fully utilized. However, such existing authorization is only sufficient to cover future issuances under outstanding warrants, under outstanding equity awards and future equity awards under our equity compensation plans. Absent a further shareholder authorization, we do not have sufficient shares to raise capital to fund the development of the Company’s business and to increase the shares reserved for issuance under the Company’s equity compensation plans in accordance with such plans' "evergreen provisions". The grant of this authority will not exempt the Company from applicable Nasdaq requirements to obtain shareholder approval prior to certain share issuances or to comply with applicable SEC disclosure requirements and other rules and regulations. Our Board of Directors will continue to focus on and satisfy its fiduciary duties to our shareholders with respect to share issuances. If shareholders do not approve this Proposal No. 12, the Existing Authority to allot and issue shares up to the amount of our authorized but unissued share capital will continue to apply until September 10, 2025. However, our Board would generally not be able to issue any shares after September 10, 2025 (other than pursuant to any pre-existing contractual obligations, including upon exercise of outstanding warrants) without first seeking and obtaining shareholder approval for each such issuance. This limitation on our ability to issue shares would disadvantage us vis-à-vis many of our late-stage clinical biotechnology peers (many of which are incorporated in the United States) in competing for capital. Like other late-stage clinical biotechnology companies, we intend to seek additional fundraisings when necessary to implement our operating plan. Failure to raise additional capital may inhibit us from being able to file for regulatory approval and commercialize COMP360 and could delay research and development of our investigational COMP360 psilocybin treatment, research and discovery efforts for prodrug candidates and new compounds and the achievement of other strategic goals. In light of our size and status of being a pre-revenue-generating company, the Board believes that equity financings are an appropriate method to support any potential future funding requirements. The Board believes that, in the event of an equity financing, having authorization to allot, or grant rights to subscribe for or convert securities into, our shares without needing to seek approval from shareholders at the time should allow Compass to raise funds more efficiently, with more Company favorable terms and in a timely fashion. REQUIRED VOTE The approval of this proposal to authorize allotment of shares requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, are not counted in the calculation of votes for or against this proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” this proposal to authorize allotment of shares. PROPOSAL 12—DISAPPLICATION OF PRE-EMPTION RIGHTS As a UK incorporated company, the Company’s shareholders are entitled, under the U.K. Companies Act 2006, to pre-emption rights, whereby, in the event that the Company wishes to allot new equity securities for cash, those securities must first be offered to existing shareholders in proportion to the number of ordinary shares they each hold before they can be offered to new shareholders unless the shareholders have sanctioned the disapplication of their statutory rights of pre-emption in respect of such allotment or grant of rights. 21 In practice, the operation of such pre-emption rights is onerous and can result in significant delay and additional expense to the cost of an equity fundraising. It is therefore customary for our Board of Directors to seek authority from our shareholders to dis-apply statutory pre-emption rights for cash issues of up to a limit approved by the Company’s shareholders. With the Company solely listed on Nasdaq, and the Company’s peers, key shareholders and primary target market being in the United States, the Board of Directors is mindful of the fact that equivalent United States incorporated companies are not required to offer shares to existing shareholders on a pre-emptive basis in the event they are pursuing an equity fundraising. The Board considers that its requirement to offer shares to existing shareholders on a pre-emptive basis may place the Company at a disadvantage in competing for capital. Therefore, Proposal 13 seeks a disapplication of pre-emption rights for cash issues of up to a certain proportion of the Company’s issued ordinary share capital. Our Board of Directors currently has a power to allot shares as if the rights of pre-emption applicable under the U.K. Companies Act 2006 did not apply for cash issues. This power was granted to the Directors pursuant to shareholder resolutions passed on September 11, 2020 and was in respect of a maximum aggregate nominal amount of £536,000. It remains unexercised in respect of approximately 43% of the Company’s issued ordinary share capital; however 37% is allotted and reserved for future issuances under outstanding warrants, under outstanding equity awards and in connection with future awards under our equity compensation plans. Our Board of Directors have decided to seek a new disapplication of pre-emption rights for cash issues to replace the existing power. This Proposal will, if passed, give the Directors power, pursuant to the authority to allot granted by Proposal 12, to allot shares for cash or to grant rights to subscribe for or to convert any security into shares without first offering them to existing shareholders in proportion to their existing holdings up to an aggregate maximum nominal amount of £820,100, which represents approximately 150% of the Company’s issued share capital as of March 27, 2024. This Proposal will be required to be passed as a special resolution and, if passed, this power will expire on May 8, 2029. If shareholders do not approve Proposal 12 or this Proposal 13, the subsisting amounts under the existing authorization granted prior to the Company's initial public offering in September 2020 will continue to apply until September 10, 2025 (other than pursuant to any pre-existing contractual obligations, including upon exercise of outstanding warrants) or until such earlier time as it has been fully utilized. However, such existing authorization is only sufficient to cover future issuances under outstanding warrants, under outstanding equity awards and future equity awards under our equity compensation plans. Absent securing further shareholder authorization to allot new equity securities and disapply pre-emption rights for cash issues, we do not have sufficient shares to raise capital to fund the development of the Company’s business through completion of our phase 3 clinical program for our investigational COMP360 psilocybin treatment and to increase the shares reserved for issuance under the Company’s equity compensation plans in accordance with such plans' "evergreen provisions". Our Board of Directors considers that, as a late-stage clinical biotechnology company, the ability to raise new equity funds at relatively short notice and at low cost is vital to the continuing financial health of the business and our ability to continue our research and development activities. We believe that it is in the best interests of the Company and our shareholders for the Board of Directors to seek to retain the ability to raise new equity funds efficiently on the best terms available and in a timely fashion. REQUIRED VOTE The approval of the disapplication of pre-emption rights is a special resolution and requires the affirmative vote of not less than 75% of the votes cast by shareholders present (in person or by proxy) at the Meeting and entitled to vote. On a poll, a special resolution is passed if it is approved by holders representing not less than 75% of the total voting rights of shareholders present (in person or by proxy) who (being entitled to vote) vote on the resolution.. This vote is advisory and non-binding. Abstentions and broker non-votes, if any, are not counted in the calculation of votes for or against the proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” the disapplication of pre-emption rights. 22 BOARD OF DIRECTORS AND CORPORATE GOVERNANCE BOARD OF DIRECTORS Below is a list of our directors and their positions and ages as of
During the year ended December 31, The biographical information for Below is biographical information for those directors who are not standing for re-election at this Meeting and who will remain seated following the Meeting. Kabir Nath has served as our Chief Executive Officer and a member of our Board since August 2022. Previously from March 2016 until July 2022, Mr. Nath held positions of increasing responsibility and leadership at Otsuka Holdings Co., Ltd., a leading global healthcare group listed on the Tokyo Stock Exchange (JP 4578). Most recently, from March 2020 until July 2022, Mr. Nath served as senior managing director of global pharmaceuticals at Otsuka. From March 2016 until April 2022, Mr. Nath served as president and chief executive officer of Otsuka’s North America Pharmaceutical Business. Prior to Otsuka, from 2003 until December 2015, Mr. Nath held positions of increasing responsibility and leadership at Bristol-Myers Squibb Company (NYSE: BMS). Mr. Nath holds an M.A. from King’s College, University of Cambridge, and an M.B.A. from INSEAD. We believe that Mr. Nath is qualified to serve on our Board because of his extensive experience in the pharmaceutical and biotechnology sector and his commercial and senior leadership experience. 23 Annalisa Jenkins, MBBS, FRCP, has served as a member of our Board since May 2018. Thomas Lönngren has served as a member of our Board since May 2018. Mr. Lönngren currently serves as the Director at PharmaExec Consulting AB and as a Strategic Advisor at the NDA Group, which he has done since 2010. He is non-executive board member and chairman at Egetis Therapeutics AB, believe that Mr. Lönngren is qualified to serve on our Board because of his experience, qualifications, attributes and skills, including his extensive pharmaceutical consulting experience. Linda McGoldrick, Ph.D, has served as a director of our company since September 2020. In 1985, Dr. McGoldrick founded, and currently serves as Chair and Chief Executive Officer of, Financial Health Associates International, a strategic consulting company specializing in healthcare and life sciences. From April 2019 through December 2019, Dr. McGoldrick served as President and interim Chief Executive Officer of Zillion, Inc., 24 Sciences Industry Practices at Marsh-MMC Companies, international operations and marketing director of Veos plc, a European medical devices company, and managing director Europe for Kaiser Permanente International. In 2018, Dr. McGoldrick was appointed by the Governor of Massachusetts to serve on the state’s Health Information Technology Commission. Dr. McGoldrick currently serves on the board of Alvotech (Nasdaq: ALVO) and a number of privately-held life sciences companies. Dr. McGoldrick has served as a director of numerous publicly traded and private held companies and non-profit organizations in the United States, United Kingdom and Europe and currently serves on the faculty of the National Association of Corporate Directors. Dr. McGoldrick previously served on the board of directors of Avadim Health, Inc. Dr. McGoldrick received her bachelor of arts in sociology from Ohio Wesleyan University and master of social work in healthcare from the University of Pennsylvania, master of business administration in management and finance from the Wharton School, University of Pennsylvania and a Ph.D. in global health from Worcester Polytechnic Institute. We believe that Dr. McGoldrick is qualified to serve on our Board because of her extensive experience as a public company director, chief executive officer of various global organizations and corporations, global business strategy leader and policy expert for U.S. and European companies and organizations. Robert McQuade, Ph.D. has served as a member of our Board since CORPORATE GOVERNANCE Structure of our Board of Directors Our Articles of Association and Corporate Governance Guidelines gives our Board the flexibility to determine the appropriate leadership structure for the Board, including whether the offices of Chief Executive Officer and Chair of the Board should be separate or combined and why the Board’ leadership structure is appropriate given the specific characteristics or circumstances of our Our Board is currently chaired by our co-founder and a significant shareholder, George Goldsmith. Independence of our Board of Directors Our Board has determined that all of our current directors, other than George Goldsmith, our co-founder and Board Chair, Kabir Nath, our Chief Executive Officer, and Ekaterina Malievskaia, our co-founder and former Chief Innovation Officer, qualify as “independent” directors in accordance with the independence requirements under the applicable Nasdaq rules as well as applicable rules promulgated by the SEC. Mr. Nath is not considered independent 25 because he is an executive officer and employee of the Company. Mr. Goldsmith and Dr. Malievskaia are not considered independent because Our Board has made a subjective determination as to each independent director that no relationships exist that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, our Board reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and our management. Mr. Goldsmith is married to Dr. Malievskaia. There are no other family relationships among any of our directors or executive officers. Our independent directors meet in regularly scheduled executive sessions at which only independent directors are present. The Audit and Risk Committee, the Compensation and Leadership Development Committee and the Nominating and Corporate Governance Committee are each comprised entirely of directors determined by the Board to be independent. Board Oversight of Risk Management and ESG Matters Our management is primarily responsible for assessing and managing risk and one of the key functions of the Board is informed oversight of our risk management process. In carrying out its risk oversight responsibilities, the Board reviews the long and short-term operational and external risks facing the Company through its participation in long-range strategic planning, and ongoing reports from various Board standing committees that address risks inherent in their respective areas of oversight. On an ongoing basis, the Board and management identify key long and short-term risks, assess their potential impact and likelihood, and, where appropriate, implement operational measures and controls or purchase insurance coverage in order to help ensure adequate risk mitigation. The Board is supported by its committees in fulfillment of its risk oversight responsibilities. For example, our Audit and Risk Committee focuses on our overall financial risk by evaluating our internal controls and disclosure policies as well as ensuring the integrity of our financial statements and periodic reports. The Audit and Risk Committee also monitors compliance with legal and regulatory Most of the Environmental, Social, and Governance (“ESG”) matters prioritized as part of our ESG framework are embedded in the Company’s strategic and operational plans, and are therefore overseen by the Board as part of regular updates and discussions that the Board receives and holds on these plans. The Board also specifically discusses our ESG framework at least once a year. Furthermore, Board oversight of specific ESG matters occurs through the committees of the Board: our Nominating and Corporate Governance Committee oversees our corporate governance guidelines; our Audit and Risk Committee oversees our risk and compliance framework, our code of conduct and ethics, as well as data privacy and security matters; and our Compensation and Leadership Development Committee oversees talent and employee-related matters, and human capital management strategies, including our employee well-being program and equity, diversity and inclusion initiatives. Board Evaluation Process Our Board is committed to assessing its own performance as a board in order to identify its strengths as well as areas in which it may improve its performance. The board evaluation process, which is overseen by the Nominating and Corporate Governance Committee, involves the completion of annual written questionnaires by the directors and interviews with members of the Board and, where appropriate from time to time, may include interviews with key members of management and key advisors to the Board. The results of the board evaluation process are reviewed and discussed, including considerations of action plans to address any issues, by both the Nominating and Corporate Governance Committee and our Board. Committees of Our Board of Directors Our Board has three standing committees: the Audit and Risk Committee, the Compensation and Leadership Development Committee, and the Nominating and Corporate Governance Committee. We also have an Innovation 26 and Research Committee, which meets on an ad hoc, as needed basis and does not yet have a charter in place that governs its purpose and duties. The Innovation and Research Committee meets to oversee the development and progress of programs to research and develop drug and technology assets that aid our mission to accelerate patient access to evidence-based innovation in mental health. The charters for our Audit and Risk Committee, Compensation and Leadership Development Committee and Nominating and Corporate Governance Committee can be found on the “Corporate Governance–Documents and Charters” section of our investor relations website at ir.compasspathways.com. Each such committee reviews these charters at least annually.
Audit and Risk Committee Our Audit and Risk Committee currently consists of Annalisa Jenkins, Daphne Karydas, Linda McGoldrick and Robert McQuade and assists our Board in overseeing our accounting and financial reporting processes. Ms. Our Audit and Risk Committee’s responsibilities include: •appointing, approving the compensation of, and assessing the performance and independence of our independent registered public accounting firm; •approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm; •reviewing the audit plan with the independent registered public accounting firm and members of management responsible for preparing our financial statements and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures as well as critical accounting policies and practices used by us; •discussing with the independent registered public accounting firm its independence and obtaining required written communications required by the PCAOB; •exercising general oversight over our information security and technology risks, including our cybersecurity and information security and related risk management programs; and 27 •monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements and reviewing all related party transactions for potential conflict of interest situations and approving all such transactions. Compensation and Leadership Development Committee Our Compensation and Leadership Development Committee currently consists of Annalisa Jenkins, David Norton and Wayne Riley. Dr. Jenkins serves as chair of our Compensation and Leadership Development Committee. Under SEC and Nasdaq rules, there are heightened independence standards for members of our Compensation and Leadership Development Committee, including a prohibition against the receipt of any compensation from us other than standard board member fees. Each member of our Compensation and Leadership Development Committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act. Our Board has determined that each member of our Compensation and Leadership Development Committee is “independent” as defined under the applicable Nasdaq rules. Our Compensation and Leadership Development Committee held Our Compensation and Leadership Development Committee’s responsibilities include: •reviewing policies relevant to the consideration and determination of compensation of our directors and executive officers; •overseeing and administering our employee equity incentive plans in operation from time to time, including reviewing and approving grants and awards; •reviewing and approving certain corporate goals and objectives relating to the compensation of our chief executive officer, evaluating the performance of our chief executive officer in light of such corporate goals and objectives, and recommending the compensation of our chief executive officer to the Board based on such evaluation; •reviewing and recommending to our Board the compensation of our other executive officers and our directors; •overseeing our strategies, programs and initiatives related to equity, diversity and inclusion, gender pay parity and creating a positive working environment; •reviewing and overseeing our human capital management strategies, policies and practices, including employee health, safety and well-being, workforce belong, inclusion and diversity efforts and overall employee engagement and retention; and •reviewing and approving the retention of consulting firm or outside advisor to assist in the evaluation of compensation matters. The Compensation and Leadership Development Committee has the authority to delegate certain responsibilities to one or more subcommittees consisting of one or more of its members, but has not delegated such authority to a subcommittee. Our Board has delegated to the Compensation and Leadership Development Committee the authority to approve any proposed compensation for our executive officers other than the Chief Executive Officer whose compensation is recommended to the Board for approval based on the Compensation and Leadership Development Committee’s evaluation of his performance in relation to our goals and objectives. Non-executive director compensation is recommended by our Compensation and Leadership Development Committee to the Board for approval. Our Chief Executive Officer may participate in general discussions with our Compensation and Leadership Development Committee and Board about these compensation matters, but he does not participate in discussions during which his individual compensation is being considered and approved. In Nominating and Corporate Governance Committee 28 Our Nominating and Corporate Governance Committee currently consists of Thomas Lönngren, Linda McGoldrick and Wayne Riley. Mr. Lönngren serves as chair of our Nominating and Corporate Governance committee. Our Board has determined that each member of our Nominating and Corporate Governance Committee is “independent” as defined under the applicable Nasdaq rules. Our Nominating and Corporate Governance Committee held Our Nominating and Corporate Governance committee’s responsibilities include: •developing and recommending to the Board criteria for board and committee membership; •establishing procedures for identifying and evaluating board of director candidates, including nominees recommended by shareholders, including procedures by which shareholders may recommend director candidates; •identifying individuals qualified to become members of the Board; •evaluating the suitability of individual prospective director candidates, including considering the benefits of diversity, including diversity of thought, educational and professional background, gender, race, age, sexual orientation or ethnic and national background; •recommending to our Board the persons to be nominated for election as directors and to each of our Board’s committees; •developing and recommending to our Board a set of corporate governance guidelines, and regularly reviewing policies and guidelines adopted by the Board or its committees; and •overseeing the evaluation of our Board and its committees. Our Board is responsible for filling vacancies on our Board and for nominating candidates for election by our shareholders each year in the class of directors whose term expires at the relevant annual general meeting. The Board delegates the selection and nomination process to the Nominating and Corporate Governance Committee, with the expectation that other members of the Board, and of management, will be requested to take part in the process as appropriate. The Nominating and Corporate Governance Committee considers candidates for Board of Director membership by soliciting recommendations from any of the following sources: independent directors, the Chief Executive Officer, other executive officers, third-party search firms, or any other source it deems appropriate. Additionally, the Nominating and Corporate Governance Committee will review and evaluate the qualifications of any such proposed candidate, and conduct inquiries it deems appropriate. Any shareholder who wishes to recommend a candidate for consideration by the committee as a nominee for director should follow the procedures described later in this Proxy Statement under the heading “Additional Information—Shareholder Proposals.” Director Nomination Process The process followed by our Nominating and Corporate Governance Committee to identify and evaluate director candidates includes requests to board members and others for recommendations, including through the use of search firms or other advisors, meetings from time to time to evaluate biographical information and background material relating to potential candidates, and interviews of selected candidates by management, recruiters, members of the committee and our Board. Once candidates have been identified, the Nominating and Corporate Governance Committee confirms that the candidates meet all of the minimum qualifications and other criteria for director nominees approved by the Board and all facts and circumstances that it deems appropriate or advisable. The Nominating and Corporate Governance Committee may gather information about the candidates that relate to their skills, their depth and breadth of business experience or other background characteristics, their independence, the needs of the Board and any other item of information that the Nominating and Corporate Governance Committee deems to be appropriate in the evaluation process. The Nominating and Corporate Governance Committee then meets as a group to discuss and evaluate the qualities and skills of each candidate, both on an individual basis and taking into account the overall composition and needs of our Board. Based on the results of the evaluation process, the Nominating and Corporate Governance Committee recommends candidates for the Board’s approval to fill a vacancy or as director nominees for election to the Board by our shareholders each year in the class of directors whose term expires at the relevant annual general meeting. 29 The qualifications, qualities and skills that our Nominating and Corporate Governance Committee believes must be met by a nominee for a position on our Board are as follows: •The nominee shall have experience at a strategic or policymaking level in a business, government, non-profit or academic organization of high standing. •The nominee shall be accomplished in his or her respective field, with superior credentials and recognition. •The nominee shall be well regarded in the community and shall have a long-term reputation for the high ethical and moral standards. •The nominee shall have sufficient time and availability to devote to the affairs of the Company, particularly in light of the number of boards of directors on which such nominee may serve. •To the extent such nominee serves or has previously served on other boards, the nominee shall have a demonstrated history of actively contributing at board meetings. While we have no formal policy regarding board diversity, our Corporate Governance Guidelines and Nominating and Corporate Governance Committee charter provide that when evaluating proposed director candidates, the Nominating and Corporate Governance Committee (or any search firm acting under the direction of the Nominating and Corporate Governance Committee) shall consider the benefits of diversity, including diversity of thought, educational and professional background, gender, race, age, sexual orientation or ethnic and national background. Our priority in selection of board members is identification of members who will further the interests of our shareholders through consideration of a number of facts and circumstances, including among other things, the skills of the prospective director candidate, his or her depth and breadth of business experience or other background characteristics, his or her independence and the needs of the Board. The table below provides certain highlights of the composition of our Board members and nominees as of
In addition, one director has identified as a military veteran. Shareholder Recommendations and Nominees Our Nominating and Corporate Governance Committee considers both recommendations and nominations for candidates to the Board from shareholders so long as such recommendations and nominations comply with our Articles of Association, Nominating and Corporate Governance 30 Nominating and Corporate Governance Committee by writing to our Company Secretary at the address below not less than 120 days prior to the date on which the Company’s proxy statement is released to shareholders in connection with the previous year’s annual meeting. Shareholder recommendations for director candidates must include the nominee’s name and address of record, a representation that the shareholder is a holder of the Company’s securities, as well as the nominee’s detailed biographical data and qualifications for board membership, information regarding any arrangements or understandings between the shareholder and the recommended candidate, the consent of the proposed nominee to be named in the proxy statement and serve as a director if elected and any other information regarding the nominee that is required to be included in a proxy statement. Following verification of the shareholder status of the person submitting the recommendation, all properly submitted recommendations will be promptly brought to the attention of the Nominating and Corporate Governance Committee. Shareholders who desire to nominate persons directly for election to the Board at an annual general meeting of shareholders must meet the deadlines and other requirements set forth under “Additional Information —Shareholder Proposals.” Any vacancies on the Board occurring between our annual general meetings of shareholders may be filled by persons selected by a majority of the directors then in office, in which case any director so elected will serve until the next annual general meeting of shareholders when such director will offer himself/herself for re-election, or by persons elected by an ordinary resolution of the shareholders of the Company. You may write to the Nominating and Corporate Governance Committee at: c/o Ben Harber Company Secretary COMPASS Pathways plc 3rd Floor 1 Ashley Road, Altrincham Cheshire WA14 2DT United Kingdom Code of Business Conduct and Ethics We have adopted a Code of Business Conduct and Ethics applicable to all of our directors, officers, employees and certain designated agents. The Code of Business Conduct and Ethics is available on the “Corporate Governance –Documents and Charters” section of our investor relations website at ir.compasspathways.com. We expect that any amendments to this code or any waivers of its requirements will be disclosed on our website. Shareholder Communication with the Board of Directors Our Board has implemented a process by which our shareholders or any interested parties may communicate with our Board as a whole or with individual members of our Board. Communications directed to our Board as a whole should be addressed to COMPASS Pathways plc 3rd Floor, 1 Ashley Road, Altrincham Cheshire WA14 2DT, United Kingdom Attn: Chair of the Board, and communications directed to individual directors, including our Lead Independent Director, should be addressed to the attention of the individual director at the same address. Such communications may be made on an anonymous or confidential basis. All such communications received by the Company shall be delivered initially to the Company’s General Counsel, who shall review and maintain a log of all such communications. Directors may at any time review this log and request copies of any shareholder communication. Communications received will be promptly forwarded to the specified addressees thereof at the Company’s discretion. In general, communications relating to board and chief executive officer succession planning, corporate governance matters, executive compensation matters, general board oversight matters and long-term corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances, and matters as to which we tend to receive repetitive or duplicative communications. Any interested party with concerns about our company may report such concerns to the Board or the chairman of our Board and Nominating and Corporate Governance Committee by following the procedures described above. A copy of any such written communication may also be forwarded to our legal counsel and a copy of such communication may be retained for a reasonable period of time. The director may discuss the matter with our legal counsel, with independent advisors, with non-management directors, or with our management, or may take other action or no action as the director determines in good faith, using reasonable judgment, and applying his or her own discretion. Communications may be forwarded to other directors if they relate to important substantive matters and include suggestions or comments that may be important for other directors to know. 31 The Audit and Risk Committee oversees the procedures for the receipt, retention, and treatment of complaints received by us regarding accounting, internal accounting controls or audit matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting, internal accounting controls or auditing matters. Any shareholder communications that include concerns or complaints regarding accounting, internal controls or auditing matters or potential violations of the federal securities laws or the Foreign Corrupt Practices Act will be handled in accordance with procedures adopted by the Audit and Risk Committee. We have also established a toll-free telephone number for the reporting of such activity, which is +1 877 306 1965 or +44 (0) 800 032 5911. DIRECTOR COMPENSATION Under our Directors’ Remuneration Policy for Non-Executive Directors (“Director Compensation Policy”), the Board has the discretion to pay cash and equity fees to our non-executive directors for their Board and committee service. Our compensation arrangements for non-executive directors during Our Director Compensation Policy In addition to cash compensation, each non-executive director is eligible to receive share options under our equity incentive plans. We have historically awarded share options to certain non-executive directors in an amount determined at the discretion of the Board or Compensation and Leadership Development Committee. The value of all equity awards and cash compensation to any non-executive director in any calendar year for services as a non-executive director shall not exceed £750,000. We do not have a formal share ownership guideline policy for non-executive directors. During 2023, our Director Compensation Policy provided that each new non-executive director elected to our Board was granted an initial one-time equity award of options to purchase 52,000 of our ADS on the date of such director’s initial election or appointment to the Board and each continuing non-executive director will The table below shows the compensation paid to our non-executive directors during the year ended December 31, 33
(1) The amount reported represents the aggregate grant date fair value of share options awarded to our non-employee directors during the (2) At December 31, (3) (5) Dr. Malievskaia earned $24,827 in board fees under the Director Compensation Policy for the portion of the year during which she served as a non-executive director. Such compensation amounts are reported under the heading “Named Executive Officer Compensation—Summary Compensation Table” below. EXECUTIVE OFFICERS OF THE COMPANY Below is a list of our executive officers and their positions and ages as of the date of
For biographical information regarding Mr. Nath, Guy Goodwin has served as our Chief Medical Officer since August 2021. Dr. Goodwin currently serves as Emeritus Professor of Psychiatry at The University of Oxford, where he has been a professor of psychiatry since October 1996. Additionally, Dr. Goodwin served as Medical Director at P1vital, where he worked between April 2018 and July 2021. Dr. Goodwin previously served as WA Handley Chair of Psychiatry and Head of the University of Oxford’s Department of Psychiatry. Dr. Goodwin is a Fellow of the Academy of Medical Sciences, the American College of Neuropsychopharmacology, and former President of the British Association for Psychopharmacology and of the European College of Neuropsychopharmacology. Dr. Goodwin received his BA, DPhil, BM, and BCh from the University of Oxford. Teri Loxam has served as our Chief Financial Officer since March 2024 and worked with us on a consulting basis from December 2023 to March 2024. Prior to joining the Company, Ms. Loxam served as Chief Financial Officer of Gameto, Inc., a privately held, clinical-stage biotechnology company from April 2023 until October 2023. Previously, Ms. Loxam served as Chief Financial Officer and Chief Operating Officer of Kira Pharmaceuticals, a privately held, clinical-stage biotechnology company, from November 2021 to April 2023 and as Chief Financial Officer of SQZ Biotechnologies (OTC: SQZB), from August 2019 to November 2021. From August 2015 to August 2019, Ms. Loxam served in various roles at Merck & Co., Inc. (NYSE: MRK), including serving as Senior Vice President of Investor Relations and Global Communications. Before that, from July 2012 to August 2015, Ms. Loxam served as Vice President of Investor Relations at IMAX Corporation (NYSE: IMAX). From June 2001 to July 2012, Ms. Loxam had a number of roles of increasing responsibility across Strategy, Treasury and Investor Relations at Bristol-Myers Squibb (NYSE: BMY). Ms. Loxam currently serves on the boards of directors and as audit committee chairperson at Cardiol Therapeutics Inc. (Nasdaq: CRDL) (TSX: CRDL) where she has served since May 2022 and Vaxcyte, Inc. (Nasdaq: PCVX) where she has served since September 2021. Ms. Loxam holds an M.B.A. from the University of California, Irvine, Paul Merage School of Business, and a B.Sc. from the University of Victoria. Matthew Owens has served as our General Counsel and Chief Legal Officer since February 2022. Prior to joining the Company, Mr. Owens served as Global Head Legal, Digital at Novartis International AG, beginning in January 2018. He has served in various positions with Novartis since 2010, also serving as Senior Legal Counsel, and as Head Legal, Strategic Partnerships and Digital. Prior to Novartis, he was Senior Counsel at Solvay Pharmaceuticals, and Corporate Counsel at Mettler-Toledo. He holds a Bachelor of Arts (Pre-Law & Political Science, History & Criminology) from Capital University, Columbus, Ohio, and a Juris Doctorate from Capital University Law School where he was a Presidential Scholar. He previously was a lecturer at the University of Zurich Law School’s Europa Institute. EXECUTIVE COMPENSATION This Executive Compensation section describes our executive compensation program and the Our named executive officers for •Kabir Nath, our Chief Executive Officer and a Director; • •Matthew Owens, our Chief Legal Officer and General •Michael Falvey, our former Chief Financial Officer; and •Ekaterina Malievskaia, our co-founder and former Chief Innovation Officer. This Executive Compensation section describes the material elements of our executive compensation program during EXECUTIVE SUMMARY Business Overview We are a Corporate Performance Highlights We have made substantial progress during • • • Manage our cash runway and ensure value for shareholders • issued warrants, which are exercisable at the election of the holder between February 2024 and February 2027 and if all warrants are exercised for cash would result in an additional approximately $160 million in gross proceeds • • Grow pipeline beyond COMP360 in TRD •Completed enrollment of our open-label phase 2 study evaluating safety and tolerability of COMP360 in 22 patients with PTSD study and announced initial safety findings from this study at 24 hours •Continued to progress our phase 2 study in anorexia nervosa •Advanced non-oral psilocin prodrug program and ongoing research on prodrug development, which has led to a number of potential candidate leads being identified that we plan to continue through further Maintain our unique culture while maturing our organizational processes • • •Enhanced our risk management reporting, compliance maturity and quality processes OVERVIEW OF EXECUTIVE COMPENSATION PROGRAM Executive Compensation Philosophy Our executive compensation program is guided by our overarching philosophy of paying for performance. Consistent with this philosophy, we have designed our executive compensation program with the following principles in mind:
Executive Compensation Program Design Our executive compensation program is designed to be reasonable and competitive, and balance our goal of attracting, motivating, rewarding and retaining top-performing senior executives with our goal of aligning their interests with those of our shareholders. The Compensation and Leadership Development Committee annually evaluates our executive compensation program to ensure that it is consistent with our short-term and long-term goals and market competitive practices. Our executive compensation program consists of a mix of compensation elements that balance achievement of our short-term goals with our long-term performance. We provide short-term incentive compensation opportunities in 37 the form of annual cash bonuses, which focus on our achievement of annual goals. We also provide long-term incentive compensation opportunities in the form of equity awards. We provide a combination of share options with an exercise price equal to fair market value, or "market-priced" options, and full-value awards (in the form of restricted share units for U.S. taxpayers and options with an exercise price equal to the nominal value of a share, or nominal cost options, for non-U.S. taxpayers) and which focus executive attention on our long-term performance. We believe that market-priced Our executive compensation program is also designed to incorporate sound practices for compensation governance. Below we summarize such practices. What We Do:
What We Don’t Do:
“Say-on-Pay” Vote on Executive Compensation 38 Annually, at our general meeting of shareholders, we hold a non-binding advisory vote regarding the compensation of our named executive officers, which we refer to as say-on-pay. The Compensation and Leadership Development Committee has considered and will continue to consider the outcome of such say-on-pay votes, including the percentage of votes cast in favor and against the say-on-pay proposal, when making future compensation decisions for our named executive officers. The Compensation and Leadership Development Committee also relies on advice from its compensation consultants, its evaluation of Company performance against pre-defined corporate goals, its understanding of the challenges facing the Company and its observations of executive officer performance to determine executive officer compensation. At our Among other things, our Our new remuneration policy is proposed for approval at this Meeting and will remain valid until replaced by a new or amended policy (expected to occur at the 2027 annual general meeting of the Company).Our new proposed remuneration policy, which our Board of Directors has determined is competitive and consistent with current market practices. The proposed policy is largely similar to our previously approved policy, but includes the following material changes. •The proposed policy sets the maximum annual bonus payable to an Executive Director to 100% of his or her annual base salary and provides that the bonus amount may be paid in cash or shares, at the Compensation and Leadership Development Committee's election. •The proposed policy provides that the maximum pension or retirement contribution, cash supplement (or combination thereof) payable by the Company shall be up to 5% of base salary, or such lesser percentage which is available to the general workforce. •The proposed policy includes compensation recovery provisions, which are designed to comply with the mandatory compensation “clawback” requirements under Nasdaq rules that became effective as of October 2, 2023. Under the policy, in the event of an accounting restatement, we will be required to recover erroneously received incentive‑based compensation from our current and former executive officers representing the excess of the amount actually received over the amount that would have been received had the financial statements been correct in the first instance. Governance of Executive Compensation Program Role of the Compensation and Leadership Development Committee and the Board of Directors 39 Our Compensation and Leadership Development Committee, which is comprised entirely of independent directors, is responsible for discharging our Board’s responsibilities relating to compensation of our directors and executives, overseeing our overall compensation structure, policies and programs, and reviewing our processes and procedures for the consideration and determination of director and executive compensation. The Compensation and Leadership Development Committee’s approach to remuneration matters is to enable the Company to attract and retain talent, incentivize long-term value generation, and effectively manage the Company’s cash resources. It is the belief of the Compensation and Leadership Development Committee that this is best achieved through a greater emphasis on variable rather than fixed remuneration, comprised of a mix of base salary and benefits, along with the flexibility to appropriately reward and incentivize with variable pay and long-term incentives. Our Compensation and Leadership Development Committee has the authority to retain, at our expense, one or more third-party compensation consultants to assist the Compensation and Leadership Development Committee in performing its responsibilities. At the beginning of the year, the Compensation and Leadership Development Committee reviews and recommends, in the case of Compensation-Setting Factors When reviewing and approving the amount of each compensation element and the target total compensation opportunity for our executive officers, the Compensation and Leadership Development Committee considers the following factors: the Company’s performance during the year, based on business and corporate goals and priorities established by the Chief Executive Officer and the Board of Directors; each executive officer’s skills, experience and qualifications relative to other similarly-situated executives at the companies in our compensation peer group; the scope of each executive officer’s role compared to other similarly-situated executives at the companies in our compensation peer group; the performance of each individual executive officer, based on an assessment of their contributions to our overall performance, ability to lead their department and work as part of a team, all of which reflect our values; compensation parity among our executive officers; the dilutive impact of equity awards; our retention goals; general economic and market conditions and rate of inflation; changes in the size and complexity of the Company as we transitioned to a Phase 3 clinical development company and prepare to transition from a clinical-stage company to a fully integrated biotechnology company in anticipation of our first product launch; the expectations of institutional shareholders and any specific feedback received from shareholders; and the recommendations provided by the Chief Executive Officer with respect to the compensation of our executive officers, other than These factors provide the framework for compensation decisions for each of our executive officers, including our named executive officers. The Compensation and Leadership Development Committee and the Board, as applicable, do not assign relative weights or rankings to these factors, and do not consider any single factor as determinative in the compensation of our executive officers. Rather, the Compensation and Leadership Development Committee and the Board, as applicable, rely on their own knowledge and judgment in assessing these factors and making 40 compensation decisions. Role of Management In discharging its responsibilities, the Compensation and Leadership Development Committee works with management, including our Chief Executive Officer. Our management assists the Compensation and Leadership Development Committee by providing information on corporate and individual performance, market compensation data and management’s perspective on compensation matters. In addition, at the beginning of each year, our Chief Executive Officer reviews the performance of our other executive officers, including our other named executive officers based on our achievement of our corporate goals and each executive officer’s overall performance during that year. The Compensation and Leadership Development Committee solicits and reviews our Chief Executive Officer’s recommendations for base salary increases, annual cash bonuses, annual equity awards and any other compensation opportunities for our other executive officers, including our other named executive officers, and considers our Chief Executive Officer’s recommendations in determining such compensation. Role of Compensation Consultant The Compensation and Leadership Development Committee engages an external compensation consultant to assist it by providing information, analysis and other advice relating to our executive compensation program. For review and analysis of the compensation for our executive officers, including our named executive officers; research, development and review of our compensation peer support on other compensation matters as requested throughout the year. Aon reports directly to the Compensation and Leadership Development Committee and to the Compensation and Leadership Development Committee chair. Aon also coordinates with our management for data collection and job matching for our executive officers. The Compensation and Leadership Development Committee reviewed its relationship with Aon and considered Aon’s independence in light of all relevant factors, including those set forth in the Exchange Act and in applicable Nasdaq listing rules. The Compensation and Leadership Development Committee concluded that the work performed by Aon and Aon’s senior advisors involved in the engagements did not raise any conflict of interest. In reaching these conclusions, our Compensation and Leadership Development Committee considered the factors set forth in the SEC rules and the applicable Nasdaq rules. Role of Market Data For purposes of comparing our executive compensation against the competitive market, the Compensation and Leadership Development Committee reviews and considers the compensation levels and practices of a group of peer companies. This compensation peer group consists of public biotechnology companies that are similar to us in terms of market capitalization, stage of development and number of employees. As a Nasdaq-listed 41 To determine the composition of the peer group for publicly-traded companies listed in the United States (including both U.S.-headquartered and European-headquartered companies), with a preference towards companies with a recent IPO (i.e., within the past five years); companies in the pre-commercial biotechnology or health care technology sectors, with preference towards mental health care and healthcare technology platform companies, as appropriate; similar market capitalization—within a range of approximately 0.33x to approximately 3.0x our market capitalization in the stage of development of each company’s development candidates, with a focus on companies with similar headcount—within a range of This analysis led to the selection of the following peer group which was used to make the relevant compensation assessments for
PRIMARY ELEMENTS OF EXECUTIVE COMPENSATION PROGRAM The primary elements of our executive compensation program are: base salary; short-term incentive compensation in the form of annual cash bonuses; and long-term incentive compensation in the form of annual equity awards. Our executive officers, including our named executive officers, are also eligible to participate in our standard employee benefit plans, such as our health and welfare benefits plans, and defined contribution retirement plans on the same basis as our other employees in the U.S. or U.K., as applicable. In addition, as described below, our executive officers, including our named executive officers, are entitled to certain severance payments, change-in-control severance payments and benefits pursuant to their employment agreements, described herein. Base Salary We pay base salaries to our executive officers, including our named executive officers, to provide a market competitive fixed remuneration that reflects the responsibilities of the role undertaken, the experience of the individual, and their performance in the role over time. At the time of hire, base salaries are determined for our executive officers, including our named executive officers, based on the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above. Typically, at the beginning of each year, the Compensation and Leadership Development Committee reviews base salaries for our executive officers, 42 including our named executive officers, based on such factors to determine if an increase is appropriate. In addition, base salaries may be adjusted in the event of a promotion or significant change in responsibilities. In January
(1) All amounts, except those for Mr. Nath and Mr. Falvey, have been converted from GBP to USD using the The actual base salaries paid to our named executive officers in Short-Term Incentive Compensation Annual Cash Bonuses We provide short-term incentive compensation opportunities to our executive officers, including our named executive officers, in the form of annual cash bonuses to incentivize and award delivery of the Company’s strategy and corporate objectives on an annual basis. For Performance Goals At the beginning of each year, the Board discusses with the Chief Executive Officer the annual corporate performance objectives that are intended to be the most significant drivers of our short-term and long-term success. After the end of the relevant financial year, the Compensation and Leadership Development Committee assesses the results of the corporate goals, reviews management’s self-assessment, evaluates specific achievements that advanced the prior year’s corporate objectives, and determines our overall success in the prior year. The Compensation and Leadership Development Committee considers our Chief Executive Officer’s recommendations, and independently reviews and approves the total percentage achievement level for each of the other named executive officers. Target Annual Bonuses At the time of hire, the target annual bonus is determined for each of our named executive officers, and at the beginning of each year, the Compensation and Leadership Development Committee reviews and determines whether to change the target annual bonus for each such individual. The Compensation and Leadership Development Committee considers the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above, with an emphasis on market data from our compensation peer group for comparable positions. Target annual bonuses represent a specific percentage of annual base salary. Each year, we evaluate our target annual bonuses relative to our executive peer group and adjust the targets, as appropriate, to stay aligned with our compensation philosophy. In January 43 The Corporate Goals and Achievements Prepare for commercial launch in TRD – In collaboration with Lykos Therapeutics, we applied for a new CPT III code for the delivery of psychedelic treatments with the goal of ensuring broad and equitable access to psychedelic therapies, if approved, for people who urgently need new options to treat their mental health conditions. The American Medical Association accepted the application and released the language for the CPT III code titled “Continuous In-Person Monitoring and Intervention during Psychedelic Medication Therapy,” which became effective January 1, 2024. We entered into research collaborations with Greenbrook TMS and Hackensack Meridian Health to explore and develop multiple potential commercial delivery models for COMP360 psilocybin treatment if approved. Manage our cash runway and enhance shareholder value – During 2023, we raised an aggregate of approximately $180 million in gross proceeds from our private placement financing, sales under our ATM facility and the closing of our loan facility with Hercules Capital. In August 2023, we completed a Grow our pipeline beyond COMP360 in TRD – We quality processes. In January The table below sets forth the
(1) All amounts, except those for Mr. Nath, have been converted from GBP to USD using the (2) (3) Mr. Long-Term Incentive Compensation Long-term incentive compensation in the form of equity incentives aligns the interests of our executive officers, including our named executive officers, with long-term shareholder interests and allows us to attract, incentivize, and retain staff in a competitive market. As a form of compensation, share-based incentives also enable us to more effectively manage the Company’s cash resources. In connection with the IPO, we adopted the COMPASS Pathways plc 2020 Share Option and Incentive Plan (the “2020 Plan”). The 2020 Plan allows for the grant of options, restricted share awards, restricted share unit awards (“RSUs”), other share or cash-based awards and dividend equivalent awards to employees, non-employee directors and consultants.
Typically, at the beginning of each year, the Compensation and Leadership Development Committee determines the size and relative weighting of the annual equity awards for our executive officers, including our named executive officers, it deems reasonable and appropriate based on such factors. With the help of our compensation consultant, we determine whether to grant additional equity awards, the mix of RSUs and options and the amount of equity awards to give to our executive officers based on benchmarking the position of each executive officer against the compensation paid to people in similar positions in our peer group. In February
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Employment Arrangements with our Named Executive Officers In connection with our IPO, the Compensation and Leadership Development Committee reviewed the employment agreements with our executive officers, including Our post-employment compensation arrangements set forth in the employment agreements are designed to provide reasonable compensation to executive officers who leave the Company under certain circumstances to facilitate their transition to new employment. Further, we seek to mitigate any potential employer liability and avoid future disputes or litigation by requiring a departing executive officer to sign a separation and release agreement acceptable to us as a condition to receiving post-employment compensation payments or benefits. Our Compensation and Leadership Development Committee and the Board do not consider specific amounts payable under these post-employment compensation arrangements when establishing annual compensation. It does believe, however, that these arrangements are necessary to offer compensation packages that are competitive. For more information on the service and employment agreements with our named executive officers and post-employment compensation arrangements, see the discussion under the headings “Employment Agreements, Change of Control and Severance Arrangements with Named Executive Officers” later in this Proxy Statement. Other Elements of Compensation Retirement Plans We currently maintain a 401(k) retirement savings plan for our U.S.-based employees, including any U.S.-based named executive officers, who satisfy certain eligibility requirements. The U.S. Internal Revenue Code (the “Code”) allows eligible employees to defer a portion of their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k) plan. We currently contribute a 4% safe harbor match on employee contributions up to the statutory limit. We also maintain a defined contribution plan for U.K. employees, including any U.K.-based named executive officers, who satisfy certain eligibility requirements. Other Compensation Policies and Practices Policy Prohibiting Hedging and Pledging Our Insider Trading Policy prohibits our executive officers, the non-employee members of our Board and certain designated employees who in the course of the performance of their duties have access to material, non-public information regarding the Company from engaging in the following transactions: selling any of our securities that they do not own at the time of the sale (a “short sale”); buying or selling puts, calls, other derivative securities of the Company or any derivative securities that provide the economic equivalent of ownership of any of our securities or an opportunity, direct or indirect, to profit from any change in the value of our securities or engaging in any other hedging transaction with respect to our securities at any time; using our securities as collateral in a margin account; and pledging our securities as collateral for a loan (or modifying an existing pledge) unless the pledge has been approved by the Audit and Risk Committee of the Board of Directors. Compensation Recovery Policy On November 1, 2023, we adopted a compensation recovery policy designed to comply with the mandatory compensation “clawback” requirements under Nasdaq rules that became effective as of October 2, 2023. Our compensation recovery policy provides that in the event we are required to prepare an accounting restatement, then we will seek to recover any erroneously awarded performance-based incentive compensation received by our current or former executive officers during the three completed fiscal years of the Company immediately preceding such financial restatement. This recovery is required without regard to any individual knowledge or responsibility related to the financial restatement. Notwithstanding the foregoing, we will not be required to seek such recovery if the Compensation and Leadership Development Committee determines it impracticable to do so (when permitted by Nasdaq rules), after reviewing all the relevant facts and circumstances and determining the direct expenses paid to third parties to assist in enforcing the policy would exceed the amount to be recovered and the Company has made a reasonable attempt to recover. Tax Considerations Taxation of “Parachute” Payments Sections 280G and 4999 of the U.S. Code provide that executive officers and directors who hold significant equity interests and certain other service providers may be subject to significant additional taxes if they receive payments or benefits in connection with a change in control of the company that exceeds certain prescribed limits, and that the company (or a successor) may forfeit a deduction on the amounts subject to this additional tax. We have not agreed to provide any executive officer, including any named executive officer, with a “gross-up” or other reimbursement payment for any tax liability that the executive officer might owe as a result of the application of Sections 280G or 4999 of the U.S. Code. SUMMARY COMPENSATION TABLE The following table shows the total compensation paid or accrued during the last two fiscal years ended December 31, 2023 and 2022
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(1) All 2023 amounts, except for Mr. Nath and Mr. Falvey, have been converted from GBP to USD using the 2023 average FX rate (£1:$1.2437). All 2022 amounts, except those for Mr. Nath, have been converted from GBP to USD using the 2022 average FX rate (£1: (2) The amounts reported in this column represent bonuses paid to each named executive officer based on the Compensation and Leadership Development Committee’s determination of performance against 2023 and 2022 goals, respectively, in its discretion. (3) The amount reported in the Stock Awards and Option Awards column represents the aggregate grant date fair value of time-based RSUs and time-based share options granted to each of the named executive officers in the applicable year, calculated in accordance with the provisions of FASB ASC Topic 718. The assumptions we used in calculating these amounts for 2023 are included in Note 8 of our audited consolidated financial statements for the year ended December 31, 2023 included in our Annual Report on Form 10-K, filed with the SEC on February 29, 2024. The assumptions we used in calculating these amounts for 2022 are included in Note 10 of our audited consolidated financial statements for the year ended December 31, 2022 included in our Annual Report on Form 10-K, filed with the SEC on February 28, 2023. The amounts reported in the Summary Compensation Table for these time-based RSUs and options may not represent the amounts that the named executive officers will actually realize from the awards. Whether, and to what extent, a named executive officer realizes value will depend on our actual operating performance, share price fluctuations and the named executive officer’s continued employment. (4) Effective August 1, 2022, Mr. Nath was appointed as our Chief Executive Officer and a member of our Board. (5) All other compensation for Mr. Nath in 2023 consists of (i) a one-time $250,000 cash contribution towards moving and relocation costs, (ii) housing allowance of (6) (9) All other compensation for (10) Mr. Falvey resigned from his role as chief financial officer to pursue other opportunities effective October 26, 2023 and his employment terminated effective November 3, 2023. The amount reported for salary represents the amount earned through November 3, 2023. (11) All other compensation for Mr. Falvey consists of (i) a EMPLOYMENT AGREEMENTS, CHANGE OF CONTROL AND SEVERANCE ARRANGEMENTS WITH NAMED EXECUTIVE OFFICERS Kabir Nath 48 General Terms. Effective August 1, 2022, we entered into an employment agreement with Mr. Nath in connection with his appointment as our Chief Executive Officer. The Mr. Nath's employment agreement provides for an annual base salary of $580,000 (upon Mr. Nath's relocation to the United Kingdom, such salary will be paid in pound sterling (“GBP”) and be equal to the greater of (i) £431,000 GBP or (ii) the GBP equivalent of $580,000 U.S. dollars calculated at the then-prevailing exchange rate), which is subject to annual review and redetermination. Pursuant to his employment agreement, Mr. Nath is eligible to earn an annual incentive bonus, with a target bonus amount of 60% of his then-current annual base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances) as determined by our Board in its discretion. In addition, Mr. Nath will receive (i) a housing stipend of £12,000 per month through August 2023; (ii) a one-time reimbursement payment of up to $5,000 for attorneys’ fees; and (iii) a one-time cash payment of $250,000 Payments Upon Termination. Either party may terminate the employment agreement upon ninety (90) days’ written notice. The Company may terminate the Employment Agreement at any time for “cause” (as such term is defined in the employment agreement). Mr. Nath may terminate the Employment Agreement upon thirty (30) days’ written notice for “good reason” (as such term is defined in the Employment Agreement), subject to Company’s right to cure the deficiency. In the event we terminate Mr. Nath’s employment without “cause” or Mr. Nath terminates his employment for “good reason”, Mr. Nath is entitled to a cash severance payment equal to one year’s annual salary plus the target annual bonus amount for the year in which such termination occurs. Guy Goodwin General Terms. In July 2021, we entered into an employment agreement with Dr. Goodwin in connection with his appointment as our Chief Medical Officer. Dr. Goodwin’s employment agreement provides for a base salary of £324,450 ($446,346), which is subject to annual review and redetermination. In addition, Dr. Goodwin is entitled to participate in our executive variable cash compensation program. In his employment agreement, Dr. Goodwin is eligible to earn an annual incentive bonus, with a target bonus amount of 35% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances) as determined by our Board of Directors in its discretion. Dr. Goodwin is only entitled to payment of a bonus payment if he is in the Company’s employment on the date that the bonus is paid and is not eligible for a bonus payment if he is subject to any disciplinary action or investigation at the date any bonus is being considered or paid. Dr. Goodwin is also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time. Payments upon Termination. The Company may, in its discretion, terminate Dr. Goodwin’s employment at any time with immediate effect by providing notice to Dr. Goodwin that it is exercising its right and will make a payment in lieu of notice (“PILON”). Such PILON is equal to the base salary which Dr. Goodwin would be entitled to receive during the notice period of three months less deductions required by law and will be paid within 28 days. Dr. Goodwin is subject to immediate termination and is not entitled to any further payment, including any PILON which the Company is entitled to recover if payment was already made, other than amounts accrued as of the termination date in the event he is terminated for certain reasons for cause, including gross misconduct, serious breach of his employment agreement, gross negligence or incompetence and certain other requirements, as set forth in his employment agreement. In the event Dr. Goodwin is terminated for any reason, under most circumstances, the Company is required to reimburse him for any unused holiday entitlements. Following service of notice to terminate the employment by either party, which is required to be given with not less than three months’ prior written notice, the Company may place Dr. Goodwin on garden leave for the whole or part of the remainder of his employment. Under garden leave, Dr. Goodwin would receive his base salary for the period, but would not be entitled to receive any bonus or other incentive in respect of the period of garden leave. If Dr. Goodwin is terminated other than for misconduct, lack of capability or poor performance, or if Dr. Goodwin terminates employment in response to a fundamental breach of contract by the Company within 12 months following a change of control of the Company (as defined in the employment agreement), subject to certain conditions, Dr. Goodwin is entitled to (a) 12 months’ base salary, (b) the pro rata bonus Dr. Goodwin would have 49 received for the year in which his employment is terminated had he not been dismissed, but not including any pro rata bonus for a notice period which is not worked and (c) an amount equivalent to the cost to the Company of providing Dr. Goodwin with his other employment benefits for 12 months. Matthew Owens General Terms. Effective February 1, 2022, we entered into an employment agreement with Mr. Owens in connection with his appointment as our Chief Legal Officer and General Counsel. Mr. Owens’ employment agreement provides for an initial base salary of £300,000 ($371,130), which is subject to annual review and redetermination. In addition, Mr. Owens is entitled to participate in our executive variable cash compensation program. Pursuant to his employment agreement, Mr. Owens is eligible to earn an annual incentive bonus, with a target bonus amount of 40% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances). To assist with his relocation to the U.K., we agreed to pay a cash contribution towards housing costs of £10,000 ($12,371) per month through August 2023 and to provide tax advisory services in connection with the preparation and filing of tax returns for the first two tax years of his employment. Mr. Owens is also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time. His employment agreement also provides for a pension contribution equivalent to 8% of his monthly base salary. Payments upon Termination. The Company may, in its discretion, terminate Mr. Owens' employment at any time with immediate effect by providing notice to Mr. Owens that it is exercising its right and will make a Mr. Owens is subject to immediate termination and is not entitled to any further payment, including any PILON which the Company is entitled to recover if payment was already made, other than amounts accrued as of the termination date in the event he is terminated for certain reasons for cause, including gross misconduct, serious breach of her employment agreement, gross negligence or incompetence and certain other requirements, as set forth in her employment agreement. In the event Mr. Owens is terminated for any reason, under most circumstances, the Company is required to reimburse him for any unused holiday entitlements. Following service of notice to terminate the employment by either party, which is required to be given with not less than nine months’ prior written notice, the Company may place Mr. Owens on garden leave for the whole or part of the remainder of her employment. Under garden leave, Mr. Owens would receive his base salary for the period, but would not be entitled to receive any bonus or other incentive in respect of the period of garden leave. If Mr. Owens is terminated other than for misconduct, lack of capability or poor performance, or if Mr. Owens terminates employment in response to a fundamental breach of contract by the Company within 12 months following a change of control of the Company (as defined in the employment agreement), subject to certain conditions, Mr. Owens is entitled to (a) 12 months’ base salary, (b) the pro rata bonus Mr. Owens would have received for the year in which his employment is terminated had he not been dismissed, but not including any pro rata bonus for a notice period which is not worked and (c) an amount equivalent to the cost to the Company of providing Mr. Owens with his other employment benefits for 12 months. Ekaterina Malievskaia General Terms. In September 2020, we entered into an employment agreement with Dr. Malievskaia in connection with her continued employment as our Chief Innovation Officer. This employment agreement ended when Dr. Malievskaia stepped down from her executive officer role in June 2023. Once, she stepped down from her executive officer role, Dr. Malievskaia received compensation for her service on the board in accordance with our Director Compensation Policy. Dr. Malievskaia’s employment agreement 50 Michael Falvey General Terms Mr. Falvey's employment agreement provided for a initial base salary of $430,000, which was subject to annual review and redetermination. In addition, Mr. Falvey was entitled to participate in our executive variable cash compensation program. In his employment agreement, Mr. Flavey was eligible to earn an annual incentive bonus, with a target bonus amount of 45% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances) as determined by our Board of Directors in its Separation Agreement. We and Mr. Falvey entered into a separation agreement and release dated October 24, 2023, pursuant to which his employment 2020 Share Option and Incentive Plan In September 2020, we adopted the 2020 Plan. The 2020 Plan allows the Compensation and Leadership Development Committee to make equity-based and cash-based incentive awards to our officers, employees, directors and other key persons (including consultants). We have initially reserved 2,074,325 ordinary shares (the “Initial Limit”) for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by four percent of the outstanding number of ordinary shares on the immediately preceding December 31, or such lesser number of shares as determined by our Compensation and Leadership Development Committee (the “Annual Increase”). This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. The ordinary shares underlying any awards that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by us prior to vesting, satisfied without any issuance of shares, expire or are otherwise terminated (other than by exercise) under the 2020 Plan will be added back to the ordinary shares available for issuance under the 2020 Plan. The maximum aggregate number of shares that may be issued in the form of incentive share options shall not exceed the Initial Limit cumulatively increased on January 1, 2022 and on each January 1 thereafter by the lesser of the Annual Increase for such year or 2,074,325 ordinary shares. The 2020 Plan is administered by our Compensation and Leadership Development Committee. Our Compensation and Leadership Development Committee has full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants, and to determine the specific terms and conditions of each award, subject to the provisions of the 2020 Plan. Persons eligible to participate in the 2020 Plan will be those full or part-time officers, employees, non-employee directors and other key persons (including consultants) as selected from time to time by our Compensation and Leadership Development Committee in its discretion. The 2020 Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under Section 422 of the Code, options intended to qualify as U.K. tax advantaged options under our company share option plan, or CSOP, which is a sub-plan under the 2020 Plan and options that do not so qualify for any tax advantages. Other than the nominal cost options granted to non-U.S. tax persons in lieu of restricted share units, the option exercise price of each option will be determined by our Compensation and Leadership Development Committee but may not be less than 100% of the fair market value of our ordinary shares on the date of grant. The term of each option will be fixed by our Compensation and Leadership Development Committee and 51 may not exceed ten years from the date of grant. Our Compensation and Leadership Development Committee development committee will determine at what time or times each option may be exercised. Our Compensation and Leadership Development Committee may award share appreciation rights subject to such conditions and restrictions as it may determine. Share appreciation rights entitle the recipient to ordinary shares, or cash, equal to the value of the appreciation in our share price over the exercise price. The exercise price of each share appreciation right may not be less than 100% of the fair market value of the ordinary shares on the date of grant. Our Compensation and Leadership Development Committee may award restricted shares and restricted share units to participants subject to such conditions and restrictions as it may determine. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with us through a specified vesting period. Our Compensation and Leadership Development Committee may also grant ordinary shares that are free from any restrictions under the 2020 Plan. Unrestricted shares may be granted to participants in recognition of past services or other valid consideration and may be issued in lieu of cash compensation due to such participant. Our Compensation and Leadership Development Committee may grant cash bonuses under the 2020 Plan to participants, subject to the achievement of certain performance goals. The 2020 Plan provides that in the case of, and subject to, the consummation of a “sale event” as defined in the 2020 Plan, all outstanding awards may be assumed, substituted or otherwise continued by the successor entity. To the extent that the successor entity does not assume, substitute or otherwise continue such awards, then (i) all share options and share appreciation rights will automatically become fully exercisable and the restrictions and conditions on all other awards with time-based conditions will automatically be deemed waived, and awards with conditions and restrictions relating to the attainment of performance goals may become vested and non-forfeitable in connection with a sale event in the Compensation and Leadership Development Committee’s discretion and (ii) upon the effectiveness of the sale event, the 2020 Plan and all awards will automatically terminate. In the event of such termination, (i) individuals holding options and share appreciation rights will be permitted to exercise such options and share appreciation rights (to the extent exercisable) prior to the sale event, or (ii) we may make or provide for a cash payment to participants holding options and share appreciation rights equal to the difference between the per share cash consideration payable to shareholders in the sale event and the exercise price of the options or share appreciation rights (to the extent then exercisable). Our Board may amend or discontinue the 2020 Plan and our Compensation and Leadership Development Committee may amend the exercise price of options and amend or cancel outstanding awards for purposes of satisfying changes in law or any other lawful purpose but no such action may adversely affect rights under an award without the holder’s consent. Certain amendments to the 2020 Plan require the approval of our shareholders. No awards may be granted under the 2020 Plan after the date that is ten years from the date of shareholder approval. OUTSTANDING EQUITY AWARDS AT The following table sets forth information concerning the outstanding equity awards held by each of the named executive officers as of December 31,
(1) Market value has been computed in accordance with SEC rules as the number of unvested shares or units multiplied by the closing price per share of our ADSs on The Nasdaq Global Select Market as of December (2) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting 53 date. The vesting commencement date is August 1, 2022. This grant was awarded outside the 2020 Plan pursuant to the inducement grant exception under Nasdaq Listing Rule 5635(c). (3) Options vest over a 4 year service period in 48 equal monthly installments, subject to continued service through each applicable vesting date. The vesting commencement date is February 2, 2023. This grant was made under the 2020 Plan. (4) The restricted share units vest in four equal annual installments, subject to continued service through each applicable vesting date. The vesting commencement date is August 1, 2022. This grant was made under the 2020 Plan. (5) The restricted share units vest in four equal annual installments, subject to continued service through each applicable vesting date. The vesting commencement date is February 2, 2023. This grant was made under the 2020 Plan. (6) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is August (9) Options vest in four equal annual installments, subject to continued service through each applicable vesting date. The vesting commencement date is February 2, 2023. This grant was made under the 2020 Plan. (12) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is September 18, 2020. This grant was made under the 2020 Plan. (13) The restricted share units are subject to 25% vesting upon the earlier of (i) the one year anniversary of the date of grant, or (ii) the first day following the six-month anniversary of the listing of the Company’s ordinary shares on any stock exchange on which the closing price of the shares is 20% higher than the listing price for at least five consecutive trading days. They vest quarterly thereafter over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is August 12, 2021. This grant was made under the 2017 Plan. (14) Options vested over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is December 6, 2021. Pursuant to the terms of his separation agreement, the vesting was accelerated for 25% of the shares underlying this grant. This grant was made under the 2020 Plan. PAY VERSUS PERFORMANCE The following table shows the total compensation for each of our principal executive officers (each a "PEO") and the average compensation for our other named executive officers during the last
(1) Mr. Goldsmith served as our PEO throughout 2021 and during 2022 until July 31, 2022. (2) Mr. Nath served as our PEO beginning on August 1, 2022. (3) For fiscal 2023, our non-PEO named executive officers were Guy Goodwin, Matthew Owens, Ekaterina Malievskaia and Michael Falvey. For fiscal 2022, our non-PEO named executive officers were Matthew Owens and Ekaterina Malievskaia. For fiscal 2021, our non-PEO named executive officers were Ekaterina Malievskaia, Guy Goodwin, Piers Morgan (our former Chief Financial Officer) and Nate Poulsen (our former General Counsel). 54 (4) The 2023 compensation actually paid to our PEO and the average compensation actually paid to our non-PEO named executives reflects the following adjustments from total compensation reported in the Summary Compensation Table:
(5) The 2022 compensation actually paid to our PEO and the average compensation actually paid to our non-PEO named executives reflects the following adjustments from total compensation reported in the Summary Compensation Table:
Analysis of the Information Presented in the Pay Versus Performance Table We generally seek to incentivize long-term performance, and therefore do not specifically align our performance goals 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, we are providing the following descriptions of the relationships between information presented in the Pay Versus Performance table. Compensation Actually Paid and Net Loss As a Compensation Actually Paid and TSR As shown in the following graph, the compensation actually paid to our SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS Equity Compensation Plans Table The following table sets forth information as of December 31,
(1) The weighted average exercise price is calculated based solely on outstanding share options. (2) Includes the following plans: our 2020 Plan, our 2017 Plan and our Employee Stock Purchase Plan (“ESPP”). (3) The Company initially reserved 2,074,325 of its ordinary shares for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by up to 4% of the outstanding number of ordinary shares on the immediately preceding December 31, or such lesser number of shares as determined by our Compensation and Leadership Development Committee. This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. The total number of ordinary shares that may be issued under the 2020 Plan was 57 up to a total of 340,053 ordinary shares to participating employees. The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2022 and each January 1 thereafter through January 1, 2022, by the lesser of (i) 1% of the outstanding number of ordinary shares on the immediately preceding December 31 or (ii) 510,058 ordinary shares. The number of shares reserved under the ESPP is subject to change in the event of a share split, share dividend or other change in our capitalization. On October 1, 2021, the Company launched the Share Incentive Plan and the ESPP, through which employees can purchase shares at a discounted price. At the end of each six month purchase period, shares will automatically be purchased at the lower of the opening and closing price of the shares for the purchase period minus a 15% discount. (4) Amount does not include any purchase rights accruing under the ESPP during the current purchase period, which commenced on November 1, (5) On August 1, 2022, we granted a non-qualified share option to purchase an aggregate of 600,000 shares to Mr. Nath in connection with his appointment as Chief Executive Officer. In accordance with Nasdaq Listing Rule 5635(c)(4), the non-qualified share option award was approved by Compensation and Leadership Development Committee and made as a material inducement to Mr. Nath’s entry into employment as our new Chief Executive Officer. The non-qualified share option has a 10-year term and vests as to one-fourth on August 1, 2023 (the first anniversary of his employment commencement date) and as to the remaining three-fourths in equal monthly installments over the following 36 months, subject to Mr. Nath remaining an employee on the applicable vesting dates. The non-qualified share option has other terms that mirror those of non-qualified share options granted under our 2020 Plan and the standard form of non-qualified share option agreement. AUDIT AND RISK COMMITTEE REPORT The Audit and Risk Committee oversees the accounting and financial reporting processes of COMPASS Pathways plc (the “Company”) and the audits of the Company’s financial statements, evaluates auditor performance, manages relations with the Company’s independent registered public accounting firm and evaluates policies and procedures relating to internal control systems. The Audit and Risk Committee operates under a written Audit and Risk Committee charter that has been adopted by the Board of the Company (the “Board”). All members of the Audit and Risk Committee currently meet the independence and qualification standards for audit committee membership set forth in the listing standards provided by Nasdaq and the U.S. Securities and Exchange Commission (“SEC”), and the Board has determined that Annalisa Jenkins and Linda McGoldrick are “audit committee financial experts,” as the SEC has defined that term in Item 407 of Regulation S-K. The Audit and Risk Committee members are not professional accountants or auditors. The members’ functions are not intended to duplicate or to certify the activities of management and the independent registered public accounting firm. The Audit and Risk Committee serves a board-level oversight role in which it provides advice, counsel and direction to management and the auditors on the basis of the information it receives, discussions with management and the auditors, and the experience of the Audit and Risk Committee’s members in business, financial and accounting matters. The Audit and Risk Committee oversees the Company’s financial reporting process on behalf of the Board. The Company’s management has the primary responsibility for the financial statements and reporting process, including the Company’s system of internal controls. In fulfilling its oversight responsibilities, the Audit and Risk Committee reviewed with management the audited financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, The Audit and Risk Committee also reviewed with PricewaterhouseCoopers LLP (“PwC”), our independent registered public accounting firm, which is responsible for expressing an opinion on the conformity of the audited financial statements with accounting principles generally accepted in the United States of America, their judgments as to the quality and the acceptability of the Company’s financial reporting and such other matters as are required to be discussed with the Committee by Public Company Accounting Oversight Board (“PCAOB”) AU 380, Communications with Audit Committees, and SEC Regulation S-X Rule 207, Communication with Audit Committees. The Audit and Risk Committee has received the written disclosures and the letter from PwC required by the applicable requirements of the PCAOB regarding PwC’s communications with the audit committee concerning independence. The Audit and Risk Committee has discussed with PwC its independence from management and the Company. In addition to the matters specified above, the Audit and Risk Committee discussed with PwC the overall scope, plans and estimated costs of their audit. The Audit and Risk Committee met with PwC periodically, with and without management present, to discuss the results of PwC’s examinations, the overall quality of the Company’s financial reporting and PwC’s reviews of the quarterly financial statements, and drafts of the quarterly and annual reports. Based on the reviews and discussions referred to above, and subject to the limitations of the Audit and Risk Committee’s role and responsibilities referred to above and in the Audit and Risk Committee charter, Audit and Risk Committee recommended to the Board that the Company’s audited financial statements should be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
The information contained in this Audit and Risk Committee report shall not be deemed to be “soliciting material,” “filed” with the SEC, subject to Regulations 14A or 14C of the Exchange Act, or subject to the liabilities of Section 18 of the Exchange Act. No portion of this audit and risk committee report shall be deemed to be incorporated by reference into any filing under the Securities Act, or the Exchange Act, through any general statement incorporating by reference in its entirety the proxy statement in which this report appears, except to the extent that we specifically incorporate this report or a portion of it by reference. In addition, this Audit and Risk Committee report shall not be deemed filed under either the Securities Act or the Exchange Act. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table and related footnotes set forth information with respect to the beneficial ownership of our ordinary shares, as of •each beneficial owner of more than 5% of our ordinary shares; •each of our named executive officers and directors; and •all of our current executive officers and directors as a group. Beneficial ownership is determined in accordance with the rules and regulations of the SEC. Under these rules, beneficial ownership includes any shares as to which a person has sole or shared voting power or investment power. In computing the number of ordinary shares beneficially owned by a person and the percentage ownership of that person, ordinary shares subject to options, or other rights held by such person that are currently exercisable or will become exercisable within 60 days of Unless otherwise indicated, addresses of the directors, executive officers and named beneficial owners are in care of COMPASS Pathways plc, 3rd Floor, 1 Ashley Road, Altrincham, Cheshire WA14 2DT, United Kingdom.
* Represents beneficial ownership of less than one percent. (1) Based 61 (2) Consists of (i) 3,858,000 ordinary shares and (ii) 2,976,253 ordinary shares underlying outstanding warrants. The Warrants may not be exercised to the extent that doing so would result in the holder of the Warrants (together with the holder’s affiliates and any other persons acting as a group together with the holder or any of the holder’s affiliates) beneficially owning more than 9.99% of the shares of Ordinary Shares outstanding immediately prior to or after giving effect to such exercise (the “Ownership Limitation”). Based on a Schedule 13G filed with the SEC on August 28, 2023, by TCG Crossover Fund I, L.P. (“TCG Crossover I”), CG Crossover GP I, LLC ("TCG Crossover GP I"); TCG Crossover Fund II, L.P. ("TCG Crossover II"), TCG Crossover GP II, LLC (“TCG Crossover GP II”) and Chen Yu. TCG Crossover I is the record holder of (i) 964,500 of these ordinary shares and (ii) 964,500 of the shares underlying these outstanding warrants. TCG Crossover GP I is the general partner of TCG Crossover I and may be deemed to have voting, investment and dispositive power with respect to the securities held by TCG Crossover I. TCG Crossover II is the record holder of (i) 2,893,500 of these shares and (ii) 2,893,500 of the shares underlying these outstanding warrants. TCG Crossover GP II is the general partner of TCG Crossover II and may be deemed to have voting, investment and dispositive power with respect to the securities held by TCG Crossover II. Chen Yu is the sole managing member of TCG Crossover GP I and TCG Crossover GP II and may be deemed to share voting, investment and dispositive power with respect to these securities. Each of TCG Crossover GP I, TCG Crossover GP II and Chen Yu disclaim beneficial ownership except to the extent of their pecuniary interest therein. The address for individual and entities listed above is 705 High Street, Palo Alto, California 94301. (3) Represents (i) (4) Represents March 27, 2024. Mr. Goldsmith and Dr. Malievskaia are married but they expressly disclaim beneficial ownership of each other’s shares in the Company. Pursuant to the terms of call option agreements dated May 19, 2020, as amended and restated on July 21, 2020, as further amended and restated on September 9, 2020, and as further amended effective February 15, 2023, Lars Christian Wilde, a former co-founder of the Company, has an option to purchase 776,565 of our ordinary shares for an exercise price of less than £0.01 per share from each of Mr. Goldsmith and Dr. Malievskaia, exercisable at any time following our initial public offering until September 9, 2033. (5) Represents (6) Represents (i) (7) Represents (i) (8) Represents (i) (9) Represents 11,556 ordinary shares underlying options to purchsae ordinary shares from the Company exercisable within 60 days after March 27, 2024. (10) Represents (i) 89,049 ordinary shares and (ii) (11) Represents (12) Represents (i) 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC and (ii) 62 within 60 days after (13) Represents (14) Represents (1) Represents (i) 1,733,882 ordinary shares, (ii) 2,968 ordinary shares issuable upon the settlement of RSUs releasable within 60 days of March 27, 2024 and (iii) 1,222,463 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after March 27, 2024 held by our current officers and directors. DELINQUENT SECTION 16(a) REPORTS Under Section 16(a) of the Exchange Act, directors, executive officers, our principal accounting officer and beneficial owners of 10% or more of our common stock, or reporting persons, are required to report to the SEC on a timely basis the initiation of their status as a reporting person and any changes with respect to their beneficial ownership of our common stock. Based solely on our review of copies of such forms that have been filed with the SEC, or written representations from reporting persons, we believe that during the fiscal year ended December 31, requirements. CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH RELATED PERSONS Other than the compensation arrangements described above under the sections “Director Compensation” and “Executive Compensation” and the transactions described below, in the period from January 1, AGREEMENTS WITH OUR EXECUTIVE OFFICERS AND DIRECTORS We have entered into employment agreements with our executive officers, a separation agreement with Michael Falvey and service agreements with our non-executive directors. These agreements contain customary provisions and representations, including confidentiality, non-competition, non-solicitation and inventions assignment undertakings by the executive officers. However, the enforceability of the non-competition provisions may be limited under applicable law. FAMILY RELATIONSHIPS George Goldsmith, our co-founder and former chief executive officer and Board Chair, is married to Ekaterina Malievskaia, our co-founder and former Chief Innovation Officer and INSURANCE AND INDEMNIFICATION To the extent permitted by the Companies Act 2006 and in accordance with our Articles of Association, we are empowered to indemnify our directors against any liability they incur by reason of their directorship. We maintain directors’ and officers’ insurance to insure such persons against certain liabilities. We also enter into a deed of indemnity with each of our directors and executive officers. These agreements and our Articles of Association require us to indemnify our directors and executive officers to the fullest extent permitted by law. RELATED PARTY TRANSACTION POLICY We have adopted a related party transaction policy. Pursuant to this policy, the Audit and Risk Committee has the primary responsibility for reviewing and approving or disapproving “related party transactions,” which are transactions between us and related parties in which the related party has a direct or indirect material interest. For purposes of this policy, a related party is defined as a director, executive director, nominee for director, or greater than 5% beneficial owner of any class of our voting securities, and their immediate family members. DELIVERY OF PROXY MATERIALS Our EACH ORDINARY SHAREHOLDER IS URGED TO COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY FORM. EACH ADS HOLDER IS URGED TO COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ADS PROXY CARD TO CITIBANK, N.A., THE DEPOSITARY FOR THE ADSs. ADDITIONAL INFORMATION U.K. STATUTORY ANNUAL ACCOUNT AND REPORTS OF THE BOARD OF DIRECTORS AND AUDITORS OF COMPASS PATHWAYS PLC FOR THE YEAR ENDED DECEMBER 31, Consistent with its obligations under the U.K. Companies Act 2006, our Board will present at the AGM our U.K. statutory annual accounts and reports for the year ended December 31, SHAREHOLDERS' RIGHT TO CALL A GENERAL MEETING Our shareholders have the right to call a meeting of our shareholders. The U.K. Companies Act 2006 generally requires the directors to call a general meeting once we have received requests to do so from shareholders representing at least 5% of our paid-up shares entitled to vote at a general meeting. The U.K. Companies Act 2006 generally prohibits shareholders of a U.K. public limited company from passing written resolutions. However, significant shareholders would, in any case, still have the power to call a general meeting and propose resolutions. These provisions are mandatory under the U.K. Companies Act 2006 and cannot be waived by our shareholders. SHAREHOLDER PROPOSALS Pursuant to Rule 14a-8 under the Exchange Act, in order to be considered for inclusion in our proxy statement for our Under Section 338 of the U.K. Companies Act 2006, shareholders representing at least 5% of holders entitled to vote on a resolution at an annual general meeting may require the Company to include such resolution in its notice of an annual general meeting. Provided the applicable thresholds are met, notice of the resolution must be received by the Company at the Office of the Company Secretary, 3rd Floor, 1 Ashley Road, Altrincham, Cheshire, WA14 2DT, United Kingdom at least six weeks prior to the date of the annual general meeting, or, if later, at the time notice of the annual general meeting is delivered to shareholders. QUESTIONS? If you have any questions or need more information about the AGM please write to us at: Ben Harber Company Secretary COMPASS Pathways plc 3rd Floor 1 Ashley Road Altrincham Cheshire WA14 2DT United Kingdom Annex A DIRECTORS’ REMUNERATION REPORT This part of the Remuneration Report sets out the Key considerations when determining the Policy The Policy was designed by the Committee with a number of specific principles in mind: •attract, retain and motivate high •encourage a corporate culture that promotes the highest level of integrity, teamwork and ethical standards; •be competitive against appropriate market benchmarks (being predominantly the US biotech sector) and have a strong link to performance, providing the ability to earn above-market rewards for strong performance; •be simple and understandable, both internally and externally; •encourage increased equity ownership to motivate executives in the overall interests of shareholders, the Company, employees and •take due account of good governance and promote the long-term success of the Company. A-1 In seeking to achieve the above objectives, the Committee is mindful of the views of a broad range of stakeholders in the business and accordingly takes account of a number of factors when setting remuneration including: market conditions; pay and benefits in relevant comparator organisations; terms and conditions of employment across the Company; the Company’s risk appetite; the expectations of institutional shareholders; the Nasdaq or SEC. In The Directors identify any conflicts of interest at the beginning of each Board meeting and the beginning of each Committee meeting. Mr. Goldsmith who served as The Key Changes to the Policy The Committee maintains that the overall structure of remuneration is appropriate and no fundamental structural changes are proposed. The key changes to the Policy reflect developments in market and best practices, including: •establishing the maximum annual bonus payable to an Executive Director at 100% of base salary for each Executive Director; 2 •providing flexibility for annual bonus to be payable in cash or shares, at the discretion of the Committee; •establishing for purposes of the UK pension scheme that maximum contribution, cash supplement (or combination thereof) payable to an Executive Director at 5% of base salary or such lesser level as is available to the general workforce; and •introduction of new Compensation Recovery Policy, which was adopted by the Company to comply with the mandatory compensation "clawback" requirements under applicable Nasdaq listing rules. The Policy for Executive Directors During The total remuneration for the Executive Directors is made up of the following elements: •salary; •benefits; •annual bonus; •long-term incentive awards; and •Pension/401k contribution. 3 Nasdaq IPO, the Company has issued equity under these plans and has issued an inducement grant, on such terms as are defined under applicable
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5
The Committee operates the annual bonus and 2020 Plan, in accordance with their rules, and where relevant, 6.to make certain exceptions to the Compensation Recovery Policy (to the extent permitted under applicable Nasdaq listing rules) and to determine whether to recover, and if so, the method for recovering, erroneously awards compensation from current and former Executive Directors in the event of an accounting restatement. In certain exceptional circumstances, such as a material acquisition/divestment of a Group business or a change in the broader business environment, which mean the original performance conditions are no 7 longer appropriate, the Committee may adjust the objectives, alter weightings or set different measures as necessary, to ensure the conditions achieve their original purpose and are not materially less difficult to satisfy. The Directors' service contracts and letters of appointment are kept for inspection at the Company's registered office. The Company has a classified Board with each Director serving a three-year term; each Director must seek re-election at the annual general meeting of shareholders at the end of his or her three-year term. Historical equity incentive awards Awards which were granted prior to 18 September 2020 are disclosed separately in this Remuneration Report in the Statement of Directors’ Shareholding and Share Interests section. These awards remain eligible to vest, based on their original terms which are described separately in the Directors' Remuneration Report. Annual bonus The annual bonus is designed to drive the achievement of the Company’s strategic and corporate objectives. These targets are agreed by the Board and selected because of their importance in value creation for shareholders. Objectives are weighted for Executive Directors in proportion to the degree of importance of that objective for the Company. The weightings are agreed by the Committee. Remuneration on recruitment The remuneration package for any new Executive Director will be determined by the Committee in accordance with the terms of the Policy at the time of appointment (including salary, benefits, annual bonus, long-term incentive awards and pension). It is recognised that in order to attract and recruit talented individuals the Policy needs to allow sufficient flexibility with respect to remuneration on recruitment. The following policies apply to the remuneration on recruitment of new Executive Directors: 8 Salary: Base salary will be determined based on the responsibilities of the role, experience of the individual and current market rates. It may be considered necessary to appoint a new Executive Director on above or below market rates (e.g. to reflect limited Board experience). In such circumstances, phased increases above those of the wider workforce may be required over an appropriate time period, to bring the salary to the desired market level, subject to the continued development in the role. Annual bonus: The ongoing annual bonus maximum will be in line with that outlined in the policy table for existing Executive Directors, Long-term incentive awards: 2020 Plan awards are granted in line with the policy outlined for existing Executive Directors. An initial award may be made on the date of appointment or shortly following an appointment. For internal appointments, existing awards will continue on their original terms. Benefits: Benefits provided should be in line with those of existing Executive Directors. For external and internal appointments, where required to meet business needs, reasonable relocation support will be provided. In addition, if it becomes necessary to appoint a new Executive Director from outside the UK, additional benefits may be provided to reflect local market norms or legislation. Pension/ Sign-on payments and buy-out awards: To enable the recruitment of exceptional talent, the Committee may offer additional cash and/or share-based remuneration to take account of and compensate for remuneration that the Executive Director is required to relinquish when leaving a former employer. The Committee will seek to structure any such replacement awards to be no more generous overall in terms of 9 quantum or vesting than the award to be forfeited from the previous employer and will take into account the timing, form and performance requirements of the awards forgone. Where appropriate, any long-term incentive awards will be granted under the 2020 Plan, however, the Committee will have discretion to make use of the flexibility to make awards under any relevant exemptions in the For an internal Executive Director appointment, any variable pay element awarded in respect of the prior role will be allowed to pay out according to its terms. In addition, any other contractual remuneration obligations existing prior to appointment may continue. The fees for any new Policy for payments on loss of office The Company does not have a policy of fixed term employment contracts, however, the Directors are required to retire and are entitled to put themselves forward for re-election at the AGM in accordance with their respective Director class, as prescribed by the Company’s articles of association (“Articles of Association”). The notice period for the current Chief Executive Officer’s employment contract is 90 days, provided however, that if the Company terminates his employment contract without cause, the Chief Executive Officer is entitled to a cash severance payment equal to one year’s annual salary plus the target annual bonus amount for the year in which such termination The Committee’s approach to payments in the event that an Executive Director’s employment is terminated is to take account of the individual circumstances including the reason for termination, 10 individual performance, contractual obligations, potential claims the Executive Director might have against the Company and the terms of the equity incentive plans in which the Executive Director participates. Termination by notice from the Company: up to 12 months’ notice, with the discretion for the Committee to make a payment in lieu of notice for base salary, pension and other benefits that would otherwise have been paid during the notice period. Annual bonus: except for the current Chief Executive Officer who is entitled to his target annual bonus in the event his employment is terminated by the Company without "cause" (as defined in his employment agreement) or by the Chief Executive Officer for "good reason" (as defined in his employment agreement), there is no automatic contractual entitlement to bonus or pro-rata bonus on termination, although this may be considered at the discretion of the Committee. Long-term incentives: whether any long-term incentive awards would vest and be exercisable upon loss of office would be subject to the relevant plan rules under which such award was granted. The 2020 Plan allows vesting and exercise of awards in the event of death, retirement, ill-health, injury, redundancy and any other reason at the discretion of the Committee. The Committee retains discretion to determine the extent to which the award will vest, taking into consideration the circumstances. Unvested awards normally lapse, although the Committee retains the power to determine, in accordance with the “good leaver” provisions of the relevant plan rules, what proportion of unvested awards will be retained and what proportion will lapse. In determining this, the Committee will give consideration to the reason for leaving, the extent of achievement of performance objectives at the date of leaving and may decide to pro-rate awards. Change of Control: on a change of control, all unvested awards vest on the date of change of control. Change of control provisions in the former Chief Innovation Officer’s 11 including by way of constructive dismissal) less any sums paid by way of notice or payment in lieu of notice. The former Chief Innovation Officer's employment agreement ended in June 2023 when she stepped down from her executive role. Additional payments: the Committee reserves the right to make payments it considers reasonable under a settlement agreement, including payment or reimbursement of reasonable legal and professional fees, untaken holiday and any payment for the settlement of potential claims against the Company in the UK or other jurisdictions. Payment or reimbursement of reasonable outplacement fees may also be provided. Compensation Recovery Policy During 2023, we adopted our Compensation Recovery Policy designed to comply with the mandatory compensation “clawback” requirements under Nasdaq rules that became effective as of 1 December 2023. Under this policy, in the event of certain accounting restatements, we will be required to recover erroneously received incentive compensation tied to a financial reporting measure (including measures related to stock price and total shareholder return) from our Executive Directors. The amount of erroneously awarded compensation to be recovered shall equal the excess of the amount actually received over the amount that would have been received had the financial statements been correct in the first instance. Where the financial reporting measure is related to stock price or total shareholder return, the Committee shall make a reasonable estimate of the effect of the accounting restatement upon the stock price or total shareholder return and the amount of the compensation to be recovered. The Committee also has the discretion to make certain exceptions to the Compensation Recovery Policy (to the extent permitted under applicable Nasdaq listing rules) and to determine whether to recover, and if so, the method for recovering, erroneously awarded compensation from current and former Executive Directors in the event of an accounting restatement. Currently, none of the incentive compensation payable to our Executive Directors is based on a financial reporting measure and therefore none of our current compensation is subject to recovery under this policy. 12 The Directors' service contracts are available for inspection at the Company's The Policy for the The Board approves fees payable to the The Policy for the Chief Executive Officer (CEO) The Board approves any compensation paid to the Chief Executive Officer The Policy for Non-Executive Directors The Board approves the fees payable to the Company’s non-Executive Directors.
14 Statement of consideration of employees’ pay and remuneration conditions elsewhere in the Group The Company does not formally consult with employees when drawing up the Policy. However, the Committee is made aware of employment conditions in the wider Group. The same broad principles apply to the Policy both for the Executive Directors and the wider employee population. However, the remuneration for the Executive Directors has a stronger emphasis on variable pay than for other employees. In particular, the following approach is used for the wider employee population in the Group: •Salaries, benefits and pensions or matching contributions under our 401(k) plan, as applicable, are compared to appropriate market rates and set at approximately mid market level with allowance for role, responsibilities and experience. •When setting salary levels for the Executive Directors, the Committee considers the salary increases provided to other employees. •An annual bonus plan is available to all employees and is based on business and individual performance. Payments under the bonus plan are entirely discretionary. 15 ANNUAL REPORT ON REMUNERATION Single total figure of remuneration of each Director (audited). The Directors received the following remuneration for the years ended 31 December
* 1George Goldsmith served as chief executive officer until 1 August 2022, he served as Executive Chair from 1 August 2022 until 31 December 2022 and he was appointed as Non Executive Director, effective from 1 January 2023. 2Ekaterina Malievskaia was appointed as Non Executive Director, effective from 17 June 2023. 3 Daphne Karydas was appointed as Non Executive Director, effective 18 September 2023. Her remuneration has been pro-rated above. **Relates to health insurance, life assurance, income protection insurance, pension/401(k) contributions, and housing allowance. Our Chief Executive Officer received $376,155 in compensation during 2023, which includes a housing allowance of $104,471 and a one-time cash contribution towards moving and relocation costs of $250,000. Our Chief Executive Officer also received $12,207 in 401(k) contributions and $3,600 in relation to health savings account contributions and $5,876 in relation to tax advice paid by the company on his behalf during 2023.i) No Director is currently in receipt of a pension contribution. Each Director is either not entitled to a pension payment or has opted out of receiving it. There Illustrations of Base Case, Expected and Maximum remuneration for the Executive Scenarios The charts set out for illustrative purposes only, what annual remuneration the Company expects the Executive The assumptions used in the calculations are set out below:
1)Base case: this illustration assumes a fixed base case, as set out above. This illustration assumes no annual bonus; 2)Expected case: this illustration assumes the base case remuneration set out above, plus an annual bonus. We make the assumption that The Group has used the exchange rate Annual performance bonus In During a series of meetings in December 2023 and January 18 Director individual performance. The Compensation and Leadership Development Committee reviewed the following corporate goals and based on the results approved an overall average The goals were as follows: Corporate Goals and Achievements • • •Strengthened balance sheet through equity and debt financings raising gross proceeds of approximately $185 million with potential additional gross proceeds of approximately $160 million dependent upon full exercise of warrants for cash; •Expanded shareholder base and attracted new leading biotech investors; •Took key steps to prepare for a successful and scalable commercial launch of COMP360 treatment, if regulatory approval is obtained, that will support access for as many patients as possible, including applying for CPT III code to cover in-person drug monitoring services associated with the administration of psychedelic drugs and entering into research collaborations with Greenbrook and Hackensack; •Progressed development of a pipeline of new drug and technology assets to increase the value of •Developed a high-performing team and a mission-driven organisation committed to the highest standards of quality and compliance. 19 Long term incentive awards during the year ended 31 December During the Payments to past Directors (audited) There were no payments to past Directors made during the financial year ending 31 December Payments for Loss of Office (audited) There were no payments made to Directors for Loss of Office during the financial year ending 31 December 20 Statement of Directors’ Shareholding and Share Interests (audited) The Company does not have a formal policy on Executive or Non-Executive Director shareholdings. The table below details the total number of shares owned (including their beneficial interests), the total number of share options held, the number of share options vested but not yet exercised and the total number of RSUs held as at 31 December
*Includes 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares.
*Includes 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares. The interests of the Directors in the Company’s share options and RSUs as at 31 December
(1) Price per share has been updated from 16.85 to 17.00 due to an error in the disclosure in 2022. (2) Price per share has been updated from 0.01 to N/A due to an error in the disclosure in 2022. (3) Price per share has been updated from 1.40 to 1.32 due to an error in the disclosure in 2022. (4) Price per share has been updated from 2.40 to 2.26 due to an error in the disclosure in 2022. (5) Price per share has been updated from 9.44 to 9.41 due to an error in the disclosure in 2022. (6) Price per share has been updated from 32.66 to 33.83 due to an error in the disclosure in 2022. (7) Price per share has been updated from 35.25 to 35.30 due to an error in the disclosure in 2022. 22 All options are subject to service rather than performance conditions. The options vest monthly over 4 years with a 1 year 25% cliff for those granted the one-year anniversary of the date of grant or the date of the 2024 annual general meeting of shareholders.. The beneficial interests in the Company’s shares of the Directors and their families were as follows:
*Represents beneficial ownership of less than one percent. **Includes 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares. ***Mr. Goldsmith and Dr. Malievskaia are married but they expressly disclaim beneficial ownership of each other’s shares in the Company and do not include their spouse's shares in the number of shares beneficially owned in the table above. Pursuant to the terms of call option agreements dated 19 May 2020, as amended and restated on 21 July 2020, as further amended and restated on 9 September 2020, and as further amended effective 15 February 2023, Lars Christian Wilde, a former co-founder of the Company, has an option to purchase 776,565 of our ordinary shares for an exercise price of less than £0.01 per share from each of Mr. Goldsmith and Dr. Malievskaia, exercisable at any time following our initial public offering until 9 September 2033. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission, or SEC. These rules generally attribute beneficial ownership of securities to persons who 23 possess sole or shared voting power or investment power with respect to those securities and include ordinary shares that can be acquired within 60 days of 31 December Total Shareholder Return for Compass Pathways American Depositary Shares The graph below shows the Company’s performance, measured by total shareholder return, for the Company’s American Depositary Shares (“ADSs”), which are listed on Nasdaq and each representing one of the Company’s ordinary shares against the Nasdaq Composite Index (Nasdaq: CMPS vs NCI) and the Nasdaq Biotech Index (Nasdaq: CMPS vs NBI). We have selected these indices for this comparison because the Company has been admitted to trading on the Nasdaq exchange and operates as a Biotech and we consider them to be the most suitable comparator indices. 24 Chief Executive Officer total remuneration history 2020 was the first year that the Company prepared a Remuneration Report. We have taken the exemption not to disclose 5 years of history of remuneration and have chosen to disclose remuneration history for 2020 onwards. Percentage change in remuneration of the Executive and Non-Executive Directors The year on year movement to 31 December
*Represents Kabir Nath **Represents George Goldsmith The year on year movement to 31 December
25
*Represents Kabir **Represents George Goldsmith ***Represents Ekaterina Malievskaia 1.None of the Non-Executive Directors are eligible for an annual bonus and none claimed any benefits during the year. 2. 3.Effective 1 4. 5.Effective 18 September 2023, Daphne Karydas joined as Non-Executive Director. 6.The employee % change compares the total prorated remuneration earned by all employees in 2023 versus 2022. Relative importance of spend on pay The Committee considers the Company’s research and development expenditure relative to remuneration expenditure for all employees, to be the most appropriate metric for assessing overall spend on pay due to the nature and stage of the Company’s business. Dividend distribution comparators have not been included as the Company has no history of such transactions. The graph below illustrates the gross remuneration to all employees compared to research and development expenditure in 26 trials for the treatment of TRD and into trials for other indications, as well as developing other neuropsychiatric therapies. Structure and Role of Committee and Approach to Remuneration Matters The Committee is comprised of Annalisa Jenkins, who chairs the Committee, David Norton and Wayne Riley. The constitution of the Committee is in compliance with Nasdaq requirements. The members of the Committee are Independent Directors as defined in Rule 10C-1 under the US Securities Exchange Act of 1934 and under applicable The Committee’s approach to remuneration matters is to enable the Company to attract and retain talent, incentivise long-term value generation and effectively manage the Company’s cash resources. It is the belief of the Committee that this is best achieved through a greater emphasis on variable rather than fixed remuneration, comprised of a mix of base salary and benefits, along with the flexibility to appropriately reward and incentivise with variable pay and longer term incentives, as described within the Policy. When applying the Policy to Executive Directors, the Committee seeks to comply with the QCA Code so far as it is practical to do so, having regard to the size, nature and business requirements of the Company. Operation of the Policy will largely be compliant with the remuneration elements of the QCA Code, but we are aware that in certain instances we will differ from the QCA Code. These instances reflect differences in US market practice when compared to the UK, and the need to balance our governance obligations against the importance of offering competitive remuneration packages in the markets in which we compete and operate. The terms of reference of the Committee can be found on our website at External advice During the year, the Company engaged Aon Solutions UK Limited (Aon) to support management and the Committee with advice on remuneration matters, in particular peer-group benchmarking of Director and Senior Management remuneration and the grant of long term equity incentives under the 2020 Plan that became effective on the day prior to the listing of our ADSs on Nasdaq. The consultants were appointed by the Committee. The 28 Aon is a leading global professional services firm and the Board confirm no conflicts of interest before each meeting. During Aon. Proposed Application of the Policy for the Year Ending 31 December CEO remuneration With effect from 1 January The target bonus for Mr. Nath for the Long term incentives for Mr Goldsmith serves as Non-Executive Director cash fees Non-Executive Directors are paid a basic fee. In addition to the basic fee, committee fees may be paid for service as Lead Independent Director, chairing or membership of a Board Non-Executive Directors are eligible to receive the following annual fees:
* ** 30 Note: Chair and committee member retainers are in addition to retainers for members of the Board of Directors. In accordance with the Company's Articles of Association, Directors are allocated into one of three classes. Each class of Directors serves a staggered three-year term. At each annual general meeting, the successors of Directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. Directors of the class retiring at the annual general meeting shall be eligible for re-appointment by ordinary resolution at such annual general meeting. Details of
*George Goldsmith and Ekaterina Malievskaia provided notice that they will resign from the Board effective 29 March 2024 The information in this part of the Remuneration Report is not subject to audit. Directors’ Remuneration Policy This remuneration policy will be submitted for approval by shareholders in a binding vote at the AGM scheduled for 9 May 2024. Statement of consideration of shareholder views The Compensation and Leadership Development Committee will consider any shareholder feedback received and ongoing shareholder feedback throughout the year, when reviewing and applying the Policy each year. The guidance from shareholder representative bodies is also considered on an ongoing basis. The Committee submits its Directors’ remuneration report for a non-binding, advisory vote of shareholders at its annual general meeting of shareholders. At the 2023 annual general meeting of shareholders, 98.27% of shareholders voted in favor of the proposal to receive and approve, as a non-binding advisory resolution, the Directors’ Remuneration Report for the year ended 31 December 2022, with 1.73% voting against such proposal. 32 Although non-binding, the Compensation and Leadership Development Committee will review and consider the voting results when making future decisions regarding our Director remuneration program. The attendees of the Compensation and Leadership Development Committee meetings in 2023 were as follows:
*David York Norton attended 4 of 5 meetings due to scheduling conflicts. 33 FORM OF PROXY FOR ORDINARY SHAREHOLDERS | Fees | December 31, 2023 ( (1) “Audit Fees” consist of fees billed for the audit of our annual consolidated financial statements and statutory accounts. (2) “Audit-related” fees consist of fees in connection with the review of our interim consolidated financial statements. (3) “Tax Fees” consist of fees billed for tax planning advice in respect of intercompany arrangements and structuring in connection with both our initial public offering (“IPO”) and ongoing operations. (4) “All Other Fees” consist of non-audit fees paid to PwC for advisory services in relation to fundraising and registration statements filed with the SEC. The Audit and Risk Committee has determined that the rendering of non-audit services by PwC is compatible with maintaining the principal accountant’s independence. Pre-Approval Procedures The Audit and Risk Committee pre-approves all audit and permissible non-audit services provided by the independent registered certified public accounting firm unless an exception to such pre-approval exists under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or the rules of the SEC. These services may include audit services, audit-related services, tax services and other services. Our Audit and Risk Committee has pre-approved all services performed by the independent registered public accounting firm since the pre-approval policy was adopted prior to our initial public offering. REQUIRED VOTE The ratification of the selection of PwC as our independent registered public accounting firm requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. This vote is advisory and non-binding. Abstentions and broker non-votes, if any, RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, PROPOSAL Proposal 7 authorizes the Audit and Risk Committee to determine our auditors’ remuneration for the fiscal year ending December 31, The Audit and Risk Committee is directly responsible for the appointment, retention and termination, and for determining the compensation of the Company’s independent registered public accounting firm. The Audit and Risk Committee shall pre-approve all auditing services and the terms thereof and non-audit services (other than non-audit services prohibited under Section 10A(g) of the Exchange Act or the applicable rules of the SEC or the Public Company Accounting Oversight Board (“PCAOB”)), except that pre-approval is not required for the provision of non-audit services if the “de minimis” provisions of Section 10A(i)(1)(B) of the Exchange Act are satisfied. The Audit and Risk Committee may delegate to the chairperson of the Audit and Risk Committee the authority to grant pre-approvals for audit and non-audit services, provided such approvals are presented to the Audit and Risk Committee at its next scheduled meeting. All services provided by PwC during fiscal year REQUIRED VOTE The authorization of the Audit and Risk Committee to determine auditor remuneration requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” the authorization of our Audit and Risk Committee to determine our auditors’ remuneration for the fiscal year ending December 31, PROPOSAL At the Meeting, our Board will present our U.K. statutory annual accounts and reports for the period January 1, REQUIRED VOTE The receipt of the U.K. statutory annual accounts and reports requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” the resolution to receive our U.K. statutory annual accounts and reports. PROPOSAL Our U.K. statutory directors’ remuneration report is set forth as Annex A to this Proxy Statement. The directors’ remuneration report includes the annual report on remuneration. This document describes in detail our remuneration policies and procedures and explains how these policies and procedures help to achieve our compensation objectives with regard to our directors and the retention of high-quality directors. Our Board and our Compensation and Leadership Development Committee believe that the policies and procedures as articulated in the directors’ remuneration report are effective and that as a result of these policies and procedures we have and will continue to have high-quality directors. Our Board has approved and signed the report in accordance with English law. At the Meeting, the shareholders will vote on the annual report on remuneration. This vote is advisory and non-binding. Although non-binding, our Board and Compensation and Leadership Development Committee will review and consider the voting results when making future decisions regarding our director remuneration program. Following the Meeting, and as required under English law, the directors’ annual report on remuneration will be delivered to the U.K. Registrar of Companies. REQUIRED VOTE The approval of our U.K. statutory directors’ annual report on remuneration requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. This vote is advisory and non-binding. Abstentions and broker non-votes, if any, RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” approval of our U.K. statutory directors’ annual report on remuneration set forth in Annex A. PROPOSAL 9—APPROVAL OF OUR U.K. STATUTORY DIRECTORS' REMUNERATION POLICY Our U.K. statutory directors’ remuneration policy is set forth as Annex A to this proxy statement. Our directors’ remuneration policy is used to determine the remuneration for our directors, including our Chief Executive Officer (our sole executive director). The policy has as its key objective the engagement and retention of high-quality directors. The last approved remuneration policy was approved by the shareholders at our 2021 annual general meeting and the new remuneration policy is proposed for approval at this AGM, as required by the U.K. Companies Act 2006. As set forth in Annex A, we submit our new proposed remuneration policy, which our Board of Directors has determined is competitive and consistent with current market practices. The proposed policy is largely similar to our previously approved policy, but includes the following material changes. •The proposed policy sets the maximum annual bonus payable to an Executive Director to 100% of his or her annual base salary and provides that the bonus amount may be paid in cash or shares, at the Compensation and Leadership Development Committee's election. •The proposed policy provides that the maximum pension or retirement contribution, cash supplement (or combination thereof) payable by the Company shall be up to 5% of base salary, or such lesser percentage which is available to the general workforce. •The proposed policy includes compensation recovery provisions, which are designed to comply with the mandatory compensation “clawback” requirements under Nasdaq rules that became effective as of October 2, 2023. Under the policy, in the event of an accounting restatement, we will be required, subject to limited impracticability exceptions, to recover erroneously received incentive‑based compensation from our current or former executive officers representing the excess of the amount actually received over the amount that would have been received had the financial statements been correct in the first instance. 18 Our Board of Directors has approved the directors’ remuneration policy and believes it is effective to achieve its objectives. The directors’ remuneration policy, if approved, will take effect immediately upon conclusion of this Meeting and will remain valid until replaced by a new or amended policy (expected to occur at the 2027 annual general meeting of the Company). Further information about the policy is available at “Director Remuneration” and the policy is set forth as of Annex A to this proxy statement. REQUIRED VOTE The approval of our U.K. statutory directors’ remuneration policy requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, are not counted in the calculation of votes for or against this proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” approval of our U.K. statutory directors’ remuneration policy set forth in Annex A. 19 PROPOSAL 10—ADVISORY (NON-BINDING) VOTE TO APPROVE THE COMPANY’S EXECUTIVE COMPENSATION Section 14A of the Exchange Act requires that we provide our shareholders with the opportunity to vote to approve, on a non-binding, advisory basis, not less frequently than once every three years, the compensation of our named executive officers. Based on the voting results of the vote on the frequency of future votes on executive compensation at our 2022 Our compensation programs are designed to effectively align our executives’ interests with the interests of our shareholders by focusing on long-term equity incentives that correlate with the growth of sustainable long-term value for our shareholders. Shareholders are urged to read the section titled “Executive Compensation” in this Proxy Statement, which discusses our executive compensation policies and practices and contains tabular information and narrative discussion about the compensation of our named executive officers for the year ended December 31, The vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the compensation of our named executive officers, as described in this Proxy Statement in accordance with the compensation disclosure rules of the SEC. Accordingly, we are asking our shareholders to vote on the following resolution at the Meeting: RESOLVED, that the shareholders hereby approve, on a non-binding advisory basis, the compensation paid to the Company’s named executive officers, as disclosed in the Company’s Proxy Statement for the REQUIRED VOTE The approval of this advisory non-binding proposal requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, The vote is advisory, which means that the vote is not binding on the Company, our Board or our Compensation and Leadership Development Committee. To the extent there is any significant vote against our named executive officer compensation as disclosed in this Proxy Statement, our Compensation and Leadership Development Committee will evaluate whether any actions are necessary to address the concerns of shareholders. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” the approval, on a non-binding advisory basis, of the compensation of our named executive officers, as disclosed in this Proxy Statement. PROPOSAL 11—AUTHORIZATION OF ALLOTMENT OF SHARES Under the U.K. Companies Act 2006, our Board of Directors cannot allot shares in the Company unless they are authorized to do so by our shareholders at a general meeting. The Directors currently have an existing authority to allot shares in the Company and to grant rights to subscribe for or convert securities into shares in the Company. This authority was granted to the Directors prior to our initial public offering in September 2020 and was in respect of a maximum aggregate nominal amount of up to £536,000 (the "Existing Authority"). The Existing Authority remains unexercised in respect of approximately 43% of the Company’s issued ordinary share capital; however 37% is allotted and reserved for future issuances under outstanding warrants and under 20 outstanding equity awards and in connection with future awards under our equity compensation plans . This Proposal 12 is an ordinary resolution to seek a new authority, in addition to such subsisting amounts under the Existing Authority. Proposal 12 proposes that the Board of Directors are granted authority to allot new shares or to grant rights to subscribe for or to convert any security into shares in the Company up to a maximum aggregate nominal amount of £820,100, which represents approximately 150% of the Company's issued ordinary share capital. If approved by shareholders, this authority will expire on May 8, 2029. If shareholders do not approve Proposal 12, the subsisting amounts under the Existing Authority granted at the time of the Company's initial public offering will continue to apply until September 10, 2025 or until such earlier time as it has been fully utilized. However, such existing authorization is only sufficient to cover future issuances under outstanding warrants, under outstanding equity awards and future equity awards under our equity compensation plans. Absent a further shareholder authorization, we do not have sufficient shares to raise capital to fund the development of the Company’s business and to increase the shares reserved for issuance under the Company’s equity compensation plans in accordance with such plans' "evergreen provisions". The grant of this authority will not exempt the Company from applicable Nasdaq requirements to obtain shareholder approval prior to certain share issuances or to comply with applicable SEC disclosure requirements and other rules and regulations. Our Board of Directors will continue to focus on and satisfy its fiduciary duties to our shareholders with respect to share issuances. If shareholders do not approve this Proposal No. 12, the Existing Authority to allot and issue shares up to the amount of our authorized but unissued share capital will continue to apply until September 10, 2025. However, our Board would generally not be able to issue any shares after September 10, 2025 (other than pursuant to any pre-existing contractual obligations, including upon exercise of outstanding warrants) without first seeking and obtaining shareholder approval for each such issuance. This limitation on our ability to issue shares would disadvantage us vis-à-vis many of our late-stage clinical biotechnology peers (many of which are incorporated in the United States) in competing for capital. Like other late-stage clinical biotechnology companies, we intend to seek additional fundraisings when necessary to implement our operating plan. Failure to raise additional capital may inhibit us from being able to file for regulatory approval and commercialize COMP360 and could delay research and development of our investigational COMP360 psilocybin treatment, research and discovery efforts for prodrug candidates and new compounds and the achievement of other strategic goals. In light of our size and status of being a pre-revenue-generating company, the Board believes that equity financings are an appropriate method to support any potential future funding requirements. The Board believes that, in the event of an equity financing, having authorization to allot, or grant rights to subscribe for or convert securities into, our shares without needing to seek approval from shareholders at the time should allow Compass to raise funds more efficiently, with more Company favorable terms and in a timely fashion. REQUIRED VOTE The approval of this proposal to authorize allotment of shares requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, are not counted in the calculation of votes for or against this proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” this proposal to authorize allotment of shares. PROPOSAL 12—DISAPPLICATION OF PRE-EMPTION RIGHTS As a UK incorporated company, the Company’s shareholders are entitled, under the U.K. Companies Act 2006, to pre-emption rights, whereby, in the event that the Company wishes to allot new equity securities for cash, those securities must first be offered to existing shareholders in proportion to the number of ordinary shares they each hold before they can be offered to new shareholders unless the shareholders have sanctioned the disapplication of their statutory rights of pre-emption in respect of such allotment or grant of rights. 21 In practice, the operation of such pre-emption rights is onerous and can result in significant delay and additional expense to the cost of an equity fundraising. It is therefore customary for our Board of Directors to seek authority from our shareholders to dis-apply statutory pre-emption rights for cash issues of up to a limit approved by the Company’s shareholders. With the Company solely listed on Nasdaq, and the Company’s peers, key shareholders and primary target market being in the United States, the Board of Directors is mindful of the fact that equivalent United States incorporated companies are not required to offer shares to existing shareholders on a pre-emptive basis in the event they are pursuing an equity fundraising. The Board considers that its requirement to offer shares to existing shareholders on a pre-emptive basis may place the Company at a disadvantage in competing for capital. Therefore, Proposal 13 seeks a disapplication of pre-emption rights for cash issues of up to a certain proportion of the Company’s issued ordinary share capital. Our Board of Directors currently has a power to allot shares as if the rights of pre-emption applicable under the U.K. Companies Act 2006 did not apply for cash issues. This power was granted to the Directors pursuant to shareholder resolutions passed on September 11, 2020 and was in respect of a maximum aggregate nominal amount of £536,000. It remains unexercised in respect of approximately 43% of the Company’s issued ordinary share capital; however 37% is allotted and reserved for future issuances under outstanding warrants, under outstanding equity awards and in connection with future awards under our equity compensation plans. Our Board of Directors have decided to seek a new disapplication of pre-emption rights for cash issues to replace the existing power. This Proposal will, if passed, give the Directors power, pursuant to the authority to allot granted by Proposal 12, to allot shares for cash or to grant rights to subscribe for or to convert any security into shares without first offering them to existing shareholders in proportion to their existing holdings up to an aggregate maximum nominal amount of £820,100, which represents approximately 150% of the Company’s issued share capital as of March 27, 2024. This Proposal will be required to be passed as a special resolution and, if passed, this power will expire on May 8, 2029. If shareholders do not approve Proposal 12 or this Proposal 13, the subsisting amounts under the existing authorization granted prior to the Company's initial public offering in September 2020 will continue to apply until September 10, 2025 (other than pursuant to any pre-existing contractual obligations, including upon exercise of outstanding warrants) or until such earlier time as it has been fully utilized. However, such existing authorization is only sufficient to cover future issuances under outstanding warrants, under outstanding equity awards and future equity awards under our equity compensation plans. Absent securing further shareholder authorization to allot new equity securities and disapply pre-emption rights for cash issues, we do not have sufficient shares to raise capital to fund the development of the Company’s business through completion of our phase 3 clinical program for our investigational COMP360 psilocybin treatment and to increase the shares reserved for issuance under the Company’s equity compensation plans in accordance with such plans' "evergreen provisions". Our Board of Directors considers that, as a late-stage clinical biotechnology company, the ability to raise new equity funds at relatively short notice and at low cost is vital to the continuing financial health of the business and our ability to continue our research and development activities. We believe that it is in the best interests of the Company and our shareholders for the Board of Directors to seek to retain the ability to raise new equity funds efficiently on the best terms available and in a timely fashion. REQUIRED VOTE The approval of the disapplication of pre-emption rights is a special resolution and requires the affirmative vote of not less than 75% of the votes cast by shareholders present (in person or by proxy) at the Meeting and entitled to vote. On a poll, a special resolution is passed if it is approved by holders representing not less than 75% of the total voting rights of shareholders present (in person or by proxy) who (being entitled to vote) vote on the resolution.. This vote is advisory and non-binding. Abstentions and broker non-votes, if any, are not counted in the calculation of votes for or against the proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” the disapplication of pre-emption rights. 22 BOARD OF DIRECTORS AND CORPORATE GOVERNANCE BOARD OF DIRECTORS Below is a list of our directors and their positions and ages as of
During the year ended December 31, The biographical information for Below is biographical information for those directors who are not standing for re-election at this Meeting and who will remain seated following the Meeting. Kabir Nath has served as our Chief Executive Officer and a member of our Board since August 2022. Previously from March 2016 until July 2022, Mr. Nath held positions of increasing responsibility and leadership at Otsuka Holdings Co., Ltd., a leading global healthcare group listed on the Tokyo Stock Exchange (JP 4578). Most recently, from March 2020 until July 2022, Mr. Nath served as senior managing director of global pharmaceuticals at Otsuka. From March 2016 until April 2022, Mr. Nath served as president and chief executive officer of Otsuka’s North America Pharmaceutical Business. Prior to Otsuka, from 2003 until December 2015, Mr. Nath held positions of increasing responsibility and leadership at Bristol-Myers Squibb Company (NYSE: BMS). Mr. Nath holds an M.A. from King’s College, University of Cambridge, and an M.B.A. from INSEAD. We believe that Mr. Nath is qualified to serve on our Board because of his extensive experience in the pharmaceutical and biotechnology sector and his commercial and senior leadership experience. 23 Annalisa Jenkins, MBBS, FRCP, has served as a member of our Board since May 2018. Thomas Lönngren has served as a member of our Board since May 2018. Mr. Lönngren currently serves as the Director at PharmaExec Consulting AB and as a Strategic Advisor at the NDA Group, which he has done since 2010. He is non-executive board member and chairman at Egetis Therapeutics AB, believe that Mr. Lönngren is qualified to serve on our Board because of his experience, qualifications, attributes and skills, including his extensive pharmaceutical consulting experience. Linda McGoldrick, Ph.D, has served as a director of our company since September 2020. In 1985, Dr. McGoldrick founded, and currently serves as Chair and Chief Executive Officer of, Financial Health Associates International, a strategic consulting company specializing in healthcare and life sciences. From April 2019 through December 2019, Dr. McGoldrick served as President and interim Chief Executive Officer of Zillion, Inc., 24 Sciences Industry Practices at Marsh-MMC Companies, international operations and marketing director of Veos plc, a European medical devices company, and managing director Europe for Kaiser Permanente International. In 2018, Dr. McGoldrick was appointed by the Governor of Massachusetts to serve on the state’s Health Information Technology Commission. Dr. McGoldrick currently serves on the board of Alvotech (Nasdaq: ALVO) and a number of privately-held life sciences companies. Dr. McGoldrick has served as a director of numerous publicly traded and private held companies and non-profit organizations in the United States, United Kingdom and Europe and currently serves on the faculty of the National Association of Corporate Directors. Dr. McGoldrick previously served on the board of directors of Avadim Health, Inc. Dr. McGoldrick received her bachelor of arts in sociology from Ohio Wesleyan University and master of social work in healthcare from the University of Pennsylvania, master of business administration in management and finance from the Wharton School, University of Pennsylvania and a Ph.D. in global health from Worcester Polytechnic Institute. We believe that Dr. McGoldrick is qualified to serve on our Board because of her extensive experience as a public company director, chief executive officer of various global organizations and corporations, global business strategy leader and policy expert for U.S. and European companies and organizations. Robert McQuade, Ph.D. has served as a member of our Board since CORPORATE GOVERNANCE Structure of our Board of Directors Our Articles of Association and Corporate Governance Guidelines gives our Board the flexibility to determine the appropriate leadership structure for the Board, including whether the offices of Chief Executive Officer and Chair of the Board should be separate or combined and why the Board’ leadership structure is appropriate given the specific characteristics or circumstances of our Our Board is currently chaired by our co-founder and a significant shareholder, George Goldsmith. Independence of our Board of Directors Our Board has determined that all of our current directors, other than George Goldsmith, our co-founder and Board Chair, Kabir Nath, our Chief Executive Officer, and Ekaterina Malievskaia, our co-founder and former Chief Innovation Officer, qualify as “independent” directors in accordance with the independence requirements under the applicable Nasdaq rules as well as applicable rules promulgated by the SEC. Mr. Nath is not considered independent 25 because he is an executive officer and employee of the Company. Mr. Goldsmith and Dr. Malievskaia are not considered independent because Our Board has made a subjective determination as to each independent director that no relationships exist that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, our Board reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and our management. Mr. Goldsmith is married to Dr. Malievskaia. There are no other family relationships among any of our directors or executive officers. Our independent directors meet in regularly scheduled executive sessions at which only independent directors are present. The Audit and Risk Committee, the Compensation and Leadership Development Committee and the Nominating and Corporate Governance Committee are each comprised entirely of directors determined by the Board to be independent. Board Oversight of Risk Management and ESG Matters Our management is primarily responsible for assessing and managing risk and one of the key functions of the Board is informed oversight of our risk management process. In carrying out its risk oversight responsibilities, the Board reviews the long and short-term operational and external risks facing the Company through its participation in long-range strategic planning, and ongoing reports from various Board standing committees that address risks inherent in their respective areas of oversight. On an ongoing basis, the Board and management identify key long and short-term risks, assess their potential impact and likelihood, and, where appropriate, implement operational measures and controls or purchase insurance coverage in order to help ensure adequate risk mitigation. The Board is supported by its committees in fulfillment of its risk oversight responsibilities. For example, our Audit and Risk Committee focuses on our overall financial risk by evaluating our internal controls and disclosure policies as well as ensuring the integrity of our financial statements and periodic reports. The Audit and Risk Committee also monitors compliance with legal and regulatory Most of the Environmental, Social, and Governance (“ESG”) matters prioritized as part of our ESG framework are embedded in the Company’s strategic and operational plans, and are therefore overseen by the Board as part of regular updates and discussions that the Board receives and holds on these plans. The Board also specifically discusses our ESG framework at least once a year. Furthermore, Board oversight of specific ESG matters occurs through the committees of the Board: our Nominating and Corporate Governance Committee oversees our corporate governance guidelines; our Audit and Risk Committee oversees our risk and compliance framework, our code of conduct and ethics, as well as data privacy and security matters; and our Compensation and Leadership Development Committee oversees talent and employee-related matters, and human capital management strategies, including our employee well-being program and equity, diversity and inclusion initiatives. Board Evaluation Process Our Board is committed to assessing its own performance as a board in order to identify its strengths as well as areas in which it may improve its performance. The board evaluation process, which is overseen by the Nominating and Corporate Governance Committee, involves the completion of annual written questionnaires by the directors and interviews with members of the Board and, where appropriate from time to time, may include interviews with key members of management and key advisors to the Board. The results of the board evaluation process are reviewed and discussed, including considerations of action plans to address any issues, by both the Nominating and Corporate Governance Committee and our Board. Committees of Our Board of Directors Our Board has three standing committees: the Audit and Risk Committee, the Compensation and Leadership Development Committee, and the Nominating and Corporate Governance Committee. We also have an Innovation 26 and Research Committee, which meets on an ad hoc, as needed basis and does not yet have a charter in place that governs its purpose and duties. The Innovation and Research Committee meets to oversee the development and progress of programs to research and develop drug and technology assets that aid our mission to accelerate patient access to evidence-based innovation in mental health. The charters for our Audit and Risk Committee, Compensation and Leadership Development Committee and Nominating and Corporate Governance Committee can be found on the “Corporate Governance–Documents and Charters” section of our investor relations website at ir.compasspathways.com. Each such committee reviews these charters at least annually.
Audit and Risk Committee Our Audit and Risk Committee currently consists of Annalisa Jenkins, Daphne Karydas, Linda McGoldrick and Robert McQuade and assists our Board in overseeing our accounting and financial reporting processes. Ms. Our Audit and Risk Committee’s responsibilities include: •appointing, approving the compensation of, and assessing the performance and independence of our independent registered public accounting firm; •approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm; •reviewing the audit plan with the independent registered public accounting firm and members of management responsible for preparing our financial statements and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures as well as critical accounting policies and practices used by us; •discussing with the independent registered public accounting firm its independence and obtaining required written communications required by the PCAOB; •exercising general oversight over our information security and technology risks, including our cybersecurity and information security and related risk management programs; and 27 •monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements and reviewing all related party transactions for potential conflict of interest situations and approving all such transactions. Compensation and Leadership Development Committee Our Compensation and Leadership Development Committee currently consists of Annalisa Jenkins, David Norton and Wayne Riley. Dr. Jenkins serves as chair of our Compensation and Leadership Development Committee. Under SEC and Nasdaq rules, there are heightened independence standards for members of our Compensation and Leadership Development Committee, including a prohibition against the receipt of any compensation from us other than standard board member fees. Each member of our Compensation and Leadership Development Committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act. Our Board has determined that each member of our Compensation and Leadership Development Committee is “independent” as defined under the applicable Nasdaq rules. Our Compensation and Leadership Development Committee held Our Compensation and Leadership Development Committee’s responsibilities include: •reviewing policies relevant to the consideration and determination of compensation of our directors and executive officers; •overseeing and administering our employee equity incentive plans in operation from time to time, including reviewing and approving grants and awards; •reviewing and approving certain corporate goals and objectives relating to the compensation of our chief executive officer, evaluating the performance of our chief executive officer in light of such corporate goals and objectives, and recommending the compensation of our chief executive officer to the Board based on such evaluation; •reviewing and recommending to our Board the compensation of our other executive officers and our directors; •overseeing our strategies, programs and initiatives related to equity, diversity and inclusion, gender pay parity and creating a positive working environment; •reviewing and overseeing our human capital management strategies, policies and practices, including employee health, safety and well-being, workforce belong, inclusion and diversity efforts and overall employee engagement and retention; and •reviewing and approving the retention of consulting firm or outside advisor to assist in the evaluation of compensation matters. The Compensation and Leadership Development Committee has the authority to delegate certain responsibilities to one or more subcommittees consisting of one or more of its members, but has not delegated such authority to a subcommittee. Our Board has delegated to the Compensation and Leadership Development Committee the authority to approve any proposed compensation for our executive officers other than the Chief Executive Officer whose compensation is recommended to the Board for approval based on the Compensation and Leadership Development Committee’s evaluation of his performance in relation to our goals and objectives. Non-executive director compensation is recommended by our Compensation and Leadership Development Committee to the Board for approval. Our Chief Executive Officer may participate in general discussions with our Compensation and Leadership Development Committee and Board about these compensation matters, but he does not participate in discussions during which his individual compensation is being considered and approved. In Nominating and Corporate Governance Committee 28 Our Nominating and Corporate Governance Committee currently consists of Thomas Lönngren, Linda McGoldrick and Wayne Riley. Mr. Lönngren serves as chair of our Nominating and Corporate Governance committee. Our Board has determined that each member of our Nominating and Corporate Governance Committee is “independent” as defined under the applicable Nasdaq rules. Our Nominating and Corporate Governance Committee held Our Nominating and Corporate Governance committee’s responsibilities include: •developing and recommending to the Board criteria for board and committee membership; •establishing procedures for identifying and evaluating board of director candidates, including nominees recommended by shareholders, including procedures by which shareholders may recommend director candidates; •identifying individuals qualified to become members of the Board; •evaluating the suitability of individual prospective director candidates, including considering the benefits of diversity, including diversity of thought, educational and professional background, gender, race, age, sexual orientation or ethnic and national background; •recommending to our Board the persons to be nominated for election as directors and to each of our Board’s committees; •developing and recommending to our Board a set of corporate governance guidelines, and regularly reviewing policies and guidelines adopted by the Board or its committees; and •overseeing the evaluation of our Board and its committees. Our Board is responsible for filling vacancies on our Board and for nominating candidates for election by our shareholders each year in the class of directors whose term expires at the relevant annual general meeting. The Board delegates the selection and nomination process to the Nominating and Corporate Governance Committee, with the expectation that other members of the Board, and of management, will be requested to take part in the process as appropriate. The Nominating and Corporate Governance Committee considers candidates for Board of Director membership by soliciting recommendations from any of the following sources: independent directors, the Chief Executive Officer, other executive officers, third-party search firms, or any other source it deems appropriate. Additionally, the Nominating and Corporate Governance Committee will review and evaluate the qualifications of any such proposed candidate, and conduct inquiries it deems appropriate. Any shareholder who wishes to recommend a candidate for consideration by the committee as a nominee for director should follow the procedures described later in this Proxy Statement under the heading “Additional Information—Shareholder Proposals.” Director Nomination Process The process followed by our Nominating and Corporate Governance Committee to identify and evaluate director candidates includes requests to board members and others for recommendations, including through the use of search firms or other advisors, meetings from time to time to evaluate biographical information and background material relating to potential candidates, and interviews of selected candidates by management, recruiters, members of the committee and our Board. Once candidates have been identified, the Nominating and Corporate Governance Committee confirms that the candidates meet all of the minimum qualifications and other criteria for director nominees approved by the Board and all facts and circumstances that it deems appropriate or advisable. The Nominating and Corporate Governance Committee may gather information about the candidates that relate to their skills, their depth and breadth of business experience or other background characteristics, their independence, the needs of the Board and any other item of information that the Nominating and Corporate Governance Committee deems to be appropriate in the evaluation process. The Nominating and Corporate Governance Committee then meets as a group to discuss and evaluate the qualities and skills of each candidate, both on an individual basis and taking into account the overall composition and needs of our Board. Based on the results of the evaluation process, the Nominating and Corporate Governance Committee recommends candidates for the Board’s approval to fill a vacancy or as director nominees for election to the Board by our shareholders each year in the class of directors whose term expires at the relevant annual general meeting. 29 The qualifications, qualities and skills that our Nominating and Corporate Governance Committee believes must be met by a nominee for a position on our Board are as follows: •The nominee shall have experience at a strategic or policymaking level in a business, government, non-profit or academic organization of high standing. •The nominee shall be accomplished in his or her respective field, with superior credentials and recognition. •The nominee shall be well regarded in the community and shall have a long-term reputation for the high ethical and moral standards. •The nominee shall have sufficient time and availability to devote to the affairs of the Company, particularly in light of the number of boards of directors on which such nominee may serve. •To the extent such nominee serves or has previously served on other boards, the nominee shall have a demonstrated history of actively contributing at board meetings. While we have no formal policy regarding board diversity, our Corporate Governance Guidelines and Nominating and Corporate Governance Committee charter provide that when evaluating proposed director candidates, the Nominating and Corporate Governance Committee (or any search firm acting under the direction of the Nominating and Corporate Governance Committee) shall consider the benefits of diversity, including diversity of thought, educational and professional background, gender, race, age, sexual orientation or ethnic and national background. Our priority in selection of board members is identification of members who will further the interests of our shareholders through consideration of a number of facts and circumstances, including among other things, the skills of the prospective director candidate, his or her depth and breadth of business experience or other background characteristics, his or her independence and the needs of the Board. The table below provides certain highlights of the composition of our Board members and nominees as of
In addition, one director has identified as a military veteran. Shareholder Recommendations and Nominees Our Nominating and Corporate Governance Committee considers both recommendations and nominations for candidates to the Board from shareholders so long as such recommendations and nominations comply with our Articles of Association, Nominating and Corporate Governance 30 Nominating and Corporate Governance Committee by writing to our Company Secretary at the address below not less than 120 days prior to the date on which the Company’s proxy statement is released to shareholders in connection with the previous year’s annual meeting. Shareholder recommendations for director candidates must include the nominee’s name and address of record, a representation that the shareholder is a holder of the Company’s securities, as well as the nominee’s detailed biographical data and qualifications for board membership, information regarding any arrangements or understandings between the shareholder and the recommended candidate, the consent of the proposed nominee to be named in the proxy statement and serve as a director if elected and any other information regarding the nominee that is required to be included in a proxy statement. Following verification of the shareholder status of the person submitting the recommendation, all properly submitted recommendations will be promptly brought to the attention of the Nominating and Corporate Governance Committee. Shareholders who desire to nominate persons directly for election to the Board at an annual general meeting of shareholders must meet the deadlines and other requirements set forth under “Additional Information —Shareholder Proposals.” Any vacancies on the Board occurring between our annual general meetings of shareholders may be filled by persons selected by a majority of the directors then in office, in which case any director so elected will serve until the next annual general meeting of shareholders when such director will offer himself/herself for re-election, or by persons elected by an ordinary resolution of the shareholders of the Company. You may write to the Nominating and Corporate Governance Committee at: c/o Ben Harber Company Secretary COMPASS Pathways plc 3rd Floor 1 Ashley Road, Altrincham Cheshire WA14 2DT United Kingdom Code of Business Conduct and Ethics We have adopted a Code of Business Conduct and Ethics applicable to all of our directors, officers, employees and certain designated agents. The Code of Business Conduct and Ethics is available on the “Corporate Governance –Documents and Charters” section of our investor relations website at ir.compasspathways.com. We expect that any amendments to this code or any waivers of its requirements will be disclosed on our website. Shareholder Communication with the Board of Directors Our Board has implemented a process by which our shareholders or any interested parties may communicate with our Board as a whole or with individual members of our Board. Communications directed to our Board as a whole should be addressed to COMPASS Pathways plc 3rd Floor, 1 Ashley Road, Altrincham Cheshire WA14 2DT, United Kingdom Attn: Chair of the Board, and communications directed to individual directors, including our Lead Independent Director, should be addressed to the attention of the individual director at the same address. Such communications may be made on an anonymous or confidential basis. All such communications received by the Company shall be delivered initially to the Company’s General Counsel, who shall review and maintain a log of all such communications. Directors may at any time review this log and request copies of any shareholder communication. Communications received will be promptly forwarded to the specified addressees thereof at the Company’s discretion. In general, communications relating to board and chief executive officer succession planning, corporate governance matters, executive compensation matters, general board oversight matters and long-term corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances, and matters as to which we tend to receive repetitive or duplicative communications. Any interested party with concerns about our company may report such concerns to the Board or the chairman of our Board and Nominating and Corporate Governance Committee by following the procedures described above. A copy of any such written communication may also be forwarded to our legal counsel and a copy of such communication may be retained for a reasonable period of time. The director may discuss the matter with our legal counsel, with independent advisors, with non-management directors, or with our management, or may take other action or no action as the director determines in good faith, using reasonable judgment, and applying his or her own discretion. Communications may be forwarded to other directors if they relate to important substantive matters and include suggestions or comments that may be important for other directors to know. 31 The Audit and Risk Committee oversees the procedures for the receipt, retention, and treatment of complaints received by us regarding accounting, internal accounting controls or audit matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting, internal accounting controls or auditing matters. Any shareholder communications that include concerns or complaints regarding accounting, internal controls or auditing matters or potential violations of the federal securities laws or the Foreign Corrupt Practices Act will be handled in accordance with procedures adopted by the Audit and Risk Committee. We have also established a toll-free telephone number for the reporting of such activity, which is +1 877 306 1965 or +44 (0) 800 032 5911. DIRECTOR COMPENSATION Under our Directors’ Remuneration Policy for Non-Executive Directors (“Director Compensation Policy”), the Board has the discretion to pay cash and equity fees to our non-executive directors for their Board and committee service. Our compensation arrangements for non-executive directors during Our Director Compensation Policy In addition to cash compensation, each non-executive director is eligible to receive share options under our equity incentive plans. We have historically awarded share options to certain non-executive directors in an amount determined at the discretion of the Board or Compensation and Leadership Development Committee. The value of all equity awards and cash compensation to any non-executive director in any calendar year for services as a non-executive director shall not exceed £750,000. We do not have a formal share ownership guideline policy for non-executive directors. During 2023, our Director Compensation Policy provided that each new non-executive director elected to our Board was granted an initial one-time equity award of options to purchase 52,000 of our ADS on the date of such director’s initial election or appointment to the Board and each continuing non-executive director will The table below shows the compensation paid to our non-executive directors during the year ended December 31, 33
(1) The amount reported represents the aggregate grant date fair value of share options awarded to our non-employee directors during the (2) At December 31, (3) (5) Dr. Malievskaia earned $24,827 in board fees under the Director Compensation Policy for the portion of the year during which she served as a non-executive director. Such compensation amounts are reported under the heading “Named Executive Officer Compensation—Summary Compensation Table” below. EXECUTIVE OFFICERS OF THE COMPANY Below is a list of our executive officers and their positions and ages as of the date of
For biographical information regarding Mr. Nath, Guy Goodwin has served as our Chief Medical Officer since August 2021. Dr. Goodwin currently serves as Emeritus Professor of Psychiatry at The University of Oxford, where he has been a professor of psychiatry since October 1996. Additionally, Dr. Goodwin served as Medical Director at P1vital, where he worked between April 2018 and July 2021. Dr. Goodwin previously served as WA Handley Chair of Psychiatry and Head of the University of Oxford’s Department of Psychiatry. Dr. Goodwin is a Fellow of the Academy of Medical Sciences, the American College of Neuropsychopharmacology, and former President of the British Association for Psychopharmacology and of the European College of Neuropsychopharmacology. Dr. Goodwin received his BA, DPhil, BM, and BCh from the University of Oxford. Teri Loxam has served as our Chief Financial Officer since March 2024 and worked with us on a consulting basis from December 2023 to March 2024. Prior to joining the Company, Ms. Loxam served as Chief Financial Officer of Gameto, Inc., a privately held, clinical-stage biotechnology company from April 2023 until October 2023. Previously, Ms. Loxam served as Chief Financial Officer and Chief Operating Officer of Kira Pharmaceuticals, a privately held, clinical-stage biotechnology company, from November 2021 to April 2023 and as Chief Financial Officer of SQZ Biotechnologies (OTC: SQZB), from August 2019 to November 2021. From August 2015 to August 2019, Ms. Loxam served in various roles at Merck & Co., Inc. (NYSE: MRK), including serving as Senior Vice President of Investor Relations and Global Communications. Before that, from July 2012 to August 2015, Ms. Loxam served as Vice President of Investor Relations at IMAX Corporation (NYSE: IMAX). From June 2001 to July 2012, Ms. Loxam had a number of roles of increasing responsibility across Strategy, Treasury and Investor Relations at Bristol-Myers Squibb (NYSE: BMY). Ms. Loxam currently serves on the boards of directors and as audit committee chairperson at Cardiol Therapeutics Inc. (Nasdaq: CRDL) (TSX: CRDL) where she has served since May 2022 and Vaxcyte, Inc. (Nasdaq: PCVX) where she has served since September 2021. Ms. Loxam holds an M.B.A. from the University of California, Irvine, Paul Merage School of Business, and a B.Sc. from the University of Victoria. Matthew Owens has served as our General Counsel and Chief Legal Officer since February 2022. Prior to joining the Company, Mr. Owens served as Global Head Legal, Digital at Novartis International AG, beginning in January 2018. He has served in various positions with Novartis since 2010, also serving as Senior Legal Counsel, and as Head Legal, Strategic Partnerships and Digital. Prior to Novartis, he was Senior Counsel at Solvay Pharmaceuticals, and Corporate Counsel at Mettler-Toledo. He holds a Bachelor of Arts (Pre-Law & Political Science, History & Criminology) from Capital University, Columbus, Ohio, and a Juris Doctorate from Capital University Law School where he was a Presidential Scholar. He previously was a lecturer at the University of Zurich Law School’s Europa Institute. EXECUTIVE COMPENSATION This Executive Compensation section describes our executive compensation program and the Our named executive officers for •Kabir Nath, our Chief Executive Officer and a Director; • •Matthew Owens, our Chief Legal Officer and General •Michael Falvey, our former Chief Financial Officer; and •Ekaterina Malievskaia, our co-founder and former Chief Innovation Officer. This Executive Compensation section describes the material elements of our executive compensation program during EXECUTIVE SUMMARY Business Overview We are a Corporate Performance Highlights We have made substantial progress during • • • Manage our cash runway and ensure value for shareholders • issued warrants, which are exercisable at the election of the holder between February 2024 and February 2027 and if all warrants are exercised for cash would result in an additional approximately $160 million in gross proceeds • • Grow pipeline beyond COMP360 in TRD •Completed enrollment of our open-label phase 2 study evaluating safety and tolerability of COMP360 in 22 patients with PTSD study and announced initial safety findings from this study at 24 hours •Continued to progress our phase 2 study in anorexia nervosa •Advanced non-oral psilocin prodrug program and ongoing research on prodrug development, which has led to a number of potential candidate leads being identified that we plan to continue through further Maintain our unique culture while maturing our organizational processes • • •Enhanced our risk management reporting, compliance maturity and quality processes OVERVIEW OF EXECUTIVE COMPENSATION PROGRAM Executive Compensation Philosophy Our executive compensation program is guided by our overarching philosophy of paying for performance. Consistent with this philosophy, we have designed our executive compensation program with the following principles in mind:
Executive Compensation Program Design Our executive compensation program is designed to be reasonable and competitive, and balance our goal of attracting, motivating, rewarding and retaining top-performing senior executives with our goal of aligning their interests with those of our shareholders. The Compensation and Leadership Development Committee annually evaluates our executive compensation program to ensure that it is consistent with our short-term and long-term goals and market competitive practices. Our executive compensation program consists of a mix of compensation elements that balance achievement of our short-term goals with our long-term performance. We provide short-term incentive compensation opportunities in 37 the form of annual cash bonuses, which focus on our achievement of annual goals. We also provide long-term incentive compensation opportunities in the form of equity awards. We provide a combination of share options with an exercise price equal to fair market value, or "market-priced" options, and full-value awards (in the form of restricted share units for U.S. taxpayers and options with an exercise price equal to the nominal value of a share, or nominal cost options, for non-U.S. taxpayers) and which focus executive attention on our long-term performance. We believe that market-priced Our executive compensation program is also designed to incorporate sound practices for compensation governance. Below we summarize such practices. What We Do:
What We Don’t Do:
“Say-on-Pay” Vote on Executive Compensation 38 Annually, at our general meeting of shareholders, we hold a non-binding advisory vote regarding the compensation of our named executive officers, which we refer to as say-on-pay. The Compensation and Leadership Development Committee has considered and will continue to consider the outcome of such say-on-pay votes, including the percentage of votes cast in favor and against the say-on-pay proposal, when making future compensation decisions for our named executive officers. The Compensation and Leadership Development Committee also relies on advice from its compensation consultants, its evaluation of Company performance against pre-defined corporate goals, its understanding of the challenges facing the Company and its observations of executive officer performance to determine executive officer compensation. At our Among other things, our Our new remuneration policy is proposed for approval at this Meeting and will remain valid until replaced by a new or amended policy (expected to occur at the 2027 annual general meeting of the Company).Our new proposed remuneration policy, which our Board of Directors has determined is competitive and consistent with current market practices. The proposed policy is largely similar to our previously approved policy, but includes the following material changes. •The proposed policy sets the maximum annual bonus payable to an Executive Director to 100% of his or her annual base salary and provides that the bonus amount may be paid in cash or shares, at the Compensation and Leadership Development Committee's election. •The proposed policy provides that the maximum pension or retirement contribution, cash supplement (or combination thereof) payable by the Company shall be up to 5% of base salary, or such lesser percentage which is available to the general workforce. •The proposed policy includes compensation recovery provisions, which are designed to comply with the mandatory compensation “clawback” requirements under Nasdaq rules that became effective as of October 2, 2023. Under the policy, in the event of an accounting restatement, we will be required to recover erroneously received incentive‑based compensation from our current and former executive officers representing the excess of the amount actually received over the amount that would have been received had the financial statements been correct in the first instance. Governance of Executive Compensation Program Role of the Compensation and Leadership Development Committee and the Board of Directors 39 Our Compensation and Leadership Development Committee, which is comprised entirely of independent directors, is responsible for discharging our Board’s responsibilities relating to compensation of our directors and executives, overseeing our overall compensation structure, policies and programs, and reviewing our processes and procedures for the consideration and determination of director and executive compensation. The Compensation and Leadership Development Committee’s approach to remuneration matters is to enable the Company to attract and retain talent, incentivize long-term value generation, and effectively manage the Company’s cash resources. It is the belief of the Compensation and Leadership Development Committee that this is best achieved through a greater emphasis on variable rather than fixed remuneration, comprised of a mix of base salary and benefits, along with the flexibility to appropriately reward and incentivize with variable pay and long-term incentives. Our Compensation and Leadership Development Committee has the authority to retain, at our expense, one or more third-party compensation consultants to assist the Compensation and Leadership Development Committee in performing its responsibilities. At the beginning of the year, the Compensation and Leadership Development Committee reviews and recommends, in the case of Compensation-Setting Factors When reviewing and approving the amount of each compensation element and the target total compensation opportunity for our executive officers, the Compensation and Leadership Development Committee considers the following factors: the Company’s performance during the year, based on business and corporate goals and priorities established by the Chief Executive Officer and the Board of Directors; each executive officer’s skills, experience and qualifications relative to other similarly-situated executives at the companies in our compensation peer group; the scope of each executive officer’s role compared to other similarly-situated executives at the companies in our compensation peer group; the performance of each individual executive officer, based on an assessment of their contributions to our overall performance, ability to lead their department and work as part of a team, all of which reflect our values; compensation parity among our executive officers; the dilutive impact of equity awards; our retention goals; general economic and market conditions and rate of inflation; changes in the size and complexity of the Company as we transitioned to a Phase 3 clinical development company and prepare to transition from a clinical-stage company to a fully integrated biotechnology company in anticipation of our first product launch; the expectations of institutional shareholders and any specific feedback received from shareholders; and the recommendations provided by the Chief Executive Officer with respect to the compensation of our executive officers, other than These factors provide the framework for compensation decisions for each of our executive officers, including our named executive officers. The Compensation and Leadership Development Committee and the Board, as applicable, do not assign relative weights or rankings to these factors, and do not consider any single factor as determinative in the compensation of our executive officers. Rather, the Compensation and Leadership Development Committee and the Board, as applicable, rely on their own knowledge and judgment in assessing these factors and making 40 compensation decisions. Role of Management In discharging its responsibilities, the Compensation and Leadership Development Committee works with management, including our Chief Executive Officer. Our management assists the Compensation and Leadership Development Committee by providing information on corporate and individual performance, market compensation data and management’s perspective on compensation matters. In addition, at the beginning of each year, our Chief Executive Officer reviews the performance of our other executive officers, including our other named executive officers based on our achievement of our corporate goals and each executive officer’s overall performance during that year. The Compensation and Leadership Development Committee solicits and reviews our Chief Executive Officer’s recommendations for base salary increases, annual cash bonuses, annual equity awards and any other compensation opportunities for our other executive officers, including our other named executive officers, and considers our Chief Executive Officer’s recommendations in determining such compensation. Role of Compensation Consultant The Compensation and Leadership Development Committee engages an external compensation consultant to assist it by providing information, analysis and other advice relating to our executive compensation program. For review and analysis of the compensation for our executive officers, including our named executive officers; research, development and review of our compensation peer support on other compensation matters as requested throughout the year. Aon reports directly to the Compensation and Leadership Development Committee and to the Compensation and Leadership Development Committee chair. Aon also coordinates with our management for data collection and job matching for our executive officers. The Compensation and Leadership Development Committee reviewed its relationship with Aon and considered Aon’s independence in light of all relevant factors, including those set forth in the Exchange Act and in applicable Nasdaq listing rules. The Compensation and Leadership Development Committee concluded that the work performed by Aon and Aon’s senior advisors involved in the engagements did not raise any conflict of interest. In reaching these conclusions, our Compensation and Leadership Development Committee considered the factors set forth in the SEC rules and the applicable Nasdaq rules. Role of Market Data For purposes of comparing our executive compensation against the competitive market, the Compensation and Leadership Development Committee reviews and considers the compensation levels and practices of a group of peer companies. This compensation peer group consists of public biotechnology companies that are similar to us in terms of market capitalization, stage of development and number of employees. As a Nasdaq-listed 41 To determine the composition of the peer group for publicly-traded companies listed in the United States (including both U.S.-headquartered and European-headquartered companies), with a preference towards companies with a recent IPO (i.e., within the past five years); companies in the pre-commercial biotechnology or health care technology sectors, with preference towards mental health care and healthcare technology platform companies, as appropriate; similar market capitalization—within a range of approximately 0.33x to approximately 3.0x our market capitalization in the stage of development of each company’s development candidates, with a focus on companies with similar headcount—within a range of This analysis led to the selection of the following peer group which was used to make the relevant compensation assessments for
PRIMARY ELEMENTS OF EXECUTIVE COMPENSATION PROGRAM The primary elements of our executive compensation program are: base salary; short-term incentive compensation in the form of annual cash bonuses; and long-term incentive compensation in the form of annual equity awards. Our executive officers, including our named executive officers, are also eligible to participate in our standard employee benefit plans, such as our health and welfare benefits plans, and defined contribution retirement plans on the same basis as our other employees in the U.S. or U.K., as applicable. In addition, as described below, our executive officers, including our named executive officers, are entitled to certain severance payments, change-in-control severance payments and benefits pursuant to their employment agreements, described herein. Base Salary We pay base salaries to our executive officers, including our named executive officers, to provide a market competitive fixed remuneration that reflects the responsibilities of the role undertaken, the experience of the individual, and their performance in the role over time. At the time of hire, base salaries are determined for our executive officers, including our named executive officers, based on the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above. Typically, at the beginning of each year, the Compensation and Leadership Development Committee reviews base salaries for our executive officers, 42 including our named executive officers, based on such factors to determine if an increase is appropriate. In addition, base salaries may be adjusted in the event of a promotion or significant change in responsibilities. In January
(1) All amounts, except those for Mr. Nath and Mr. Falvey, have been converted from GBP to USD using the The actual base salaries paid to our named executive officers in Short-Term Incentive Compensation Annual Cash Bonuses We provide short-term incentive compensation opportunities to our executive officers, including our named executive officers, in the form of annual cash bonuses to incentivize and award delivery of the Company’s strategy and corporate objectives on an annual basis. For Performance Goals At the beginning of each year, the Board discusses with the Chief Executive Officer the annual corporate performance objectives that are intended to be the most significant drivers of our short-term and long-term success. After the end of the relevant financial year, the Compensation and Leadership Development Committee assesses the results of the corporate goals, reviews management’s self-assessment, evaluates specific achievements that advanced the prior year’s corporate objectives, and determines our overall success in the prior year. The Compensation and Leadership Development Committee considers our Chief Executive Officer’s recommendations, and independently reviews and approves the total percentage achievement level for each of the other named executive officers. Target Annual Bonuses At the time of hire, the target annual bonus is determined for each of our named executive officers, and at the beginning of each year, the Compensation and Leadership Development Committee reviews and determines whether to change the target annual bonus for each such individual. The Compensation and Leadership Development Committee considers the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above, with an emphasis on market data from our compensation peer group for comparable positions. Target annual bonuses represent a specific percentage of annual base salary. Each year, we evaluate our target annual bonuses relative to our executive peer group and adjust the targets, as appropriate, to stay aligned with our compensation philosophy. In January 43 The Corporate Goals and Achievements Prepare for commercial launch in TRD – In collaboration with Lykos Therapeutics, we applied for a new CPT III code for the delivery of psychedelic treatments with the goal of ensuring broad and equitable access to psychedelic therapies, if approved, for people who urgently need new options to treat their mental health conditions. The American Medical Association accepted the application and released the language for the CPT III code titled “Continuous In-Person Monitoring and Intervention during Psychedelic Medication Therapy,” which became effective January 1, 2024. We entered into research collaborations with Greenbrook TMS and Hackensack Meridian Health to explore and develop multiple potential commercial delivery models for COMP360 psilocybin treatment if approved. Manage our cash runway and enhance shareholder value – During 2023, we raised an aggregate of approximately $180 million in gross proceeds from our private placement financing, sales under our ATM facility and the closing of our loan facility with Hercules Capital. In August 2023, we completed a Grow our pipeline beyond COMP360 in TRD – We quality processes. In January The table below sets forth the
(1) All amounts, except those for Mr. Nath, have been converted from GBP to USD using the (2) (3) Mr. Long-Term Incentive Compensation Long-term incentive compensation in the form of equity incentives aligns the interests of our executive officers, including our named executive officers, with long-term shareholder interests and allows us to attract, incentivize, and retain staff in a competitive market. As a form of compensation, share-based incentives also enable us to more effectively manage the Company’s cash resources. In connection with the IPO, we adopted the COMPASS Pathways plc 2020 Share Option and Incentive Plan (the “2020 Plan”). The 2020 Plan allows for the grant of options, restricted share awards, restricted share unit awards (“RSUs”), other share or cash-based awards and dividend equivalent awards to employees, non-employee directors and consultants.
Typically, at the beginning of each year, the Compensation and Leadership Development Committee determines the size and relative weighting of the annual equity awards for our executive officers, including our named executive officers, it deems reasonable and appropriate based on such factors. With the help of our compensation consultant, we determine whether to grant additional equity awards, the mix of RSUs and options and the amount of equity awards to give to our executive officers based on benchmarking the position of each executive officer against the compensation paid to people in similar positions in our peer group. In February
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Employment Arrangements with our Named Executive Officers In connection with our IPO, the Compensation and Leadership Development Committee reviewed the employment agreements with our executive officers, including Our post-employment compensation arrangements set forth in the employment agreements are designed to provide reasonable compensation to executive officers who leave the Company under certain circumstances to facilitate their transition to new employment. Further, we seek to mitigate any potential employer liability and avoid future disputes or litigation by requiring a departing executive officer to sign a separation and release agreement acceptable to us as a condition to receiving post-employment compensation payments or benefits. Our Compensation and Leadership Development Committee and the Board do not consider specific amounts payable under these post-employment compensation arrangements when establishing annual compensation. It does believe, however, that these arrangements are necessary to offer compensation packages that are competitive. For more information on the service and employment agreements with our named executive officers and post-employment compensation arrangements, see the discussion under the headings “Employment Agreements, Change of Control and Severance Arrangements with Named Executive Officers” later in this Proxy Statement. Other Elements of Compensation Retirement Plans We currently maintain a 401(k) retirement savings plan for our U.S.-based employees, including any U.S.-based named executive officers, who satisfy certain eligibility requirements. The U.S. Internal Revenue Code (the “Code”) allows eligible employees to defer a portion of their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k) plan. We currently contribute a 4% safe harbor match on employee contributions up to the statutory limit. We also maintain a defined contribution plan for U.K. employees, including any U.K.-based named executive officers, who satisfy certain eligibility requirements. Other Compensation Policies and Practices Policy Prohibiting Hedging and Pledging Our Insider Trading Policy prohibits our executive officers, the non-employee members of our Board and certain designated employees who in the course of the performance of their duties have access to material, non-public information regarding the Company from engaging in the following transactions: selling any of our securities that they do not own at the time of the sale (a “short sale”); buying or selling puts, calls, other derivative securities of the Company or any derivative securities that provide the economic equivalent of ownership of any of our securities or an opportunity, direct or indirect, to profit from any change in the value of our securities or engaging in any other hedging transaction with respect to our securities at any time; using our securities as collateral in a margin account; and pledging our securities as collateral for a loan (or modifying an existing pledge) unless the pledge has been approved by the Audit and Risk Committee of the Board of Directors. Compensation Recovery Policy On November 1, 2023, we adopted a compensation recovery policy designed to comply with the mandatory compensation “clawback” requirements under Nasdaq rules that became effective as of October 2, 2023. Our compensation recovery policy provides that in the event we are required to prepare an accounting restatement, then we will seek to recover any erroneously awarded performance-based incentive compensation received by our current or former executive officers during the three completed fiscal years of the Company immediately preceding such financial restatement. This recovery is required without regard to any individual knowledge or responsibility related to the financial restatement. Notwithstanding the foregoing, we will not be required to seek such recovery if the Compensation and Leadership Development Committee determines it impracticable to do so (when permitted by Nasdaq rules), after reviewing all the relevant facts and circumstances and determining the direct expenses paid to third parties to assist in enforcing the policy would exceed the amount to be recovered and the Company has made a reasonable attempt to recover. Tax Considerations Taxation of “Parachute” Payments Sections 280G and 4999 of the U.S. Code provide that executive officers and directors who hold significant equity interests and certain other service providers may be subject to significant additional taxes if they receive payments or benefits in connection with a change in control of the company that exceeds certain prescribed limits, and that the company (or a successor) may forfeit a deduction on the amounts subject to this additional tax. We have not agreed to provide any executive officer, including any named executive officer, with a “gross-up” or other reimbursement payment for any tax liability that the executive officer might owe as a result of the application of Sections 280G or 4999 of the U.S. Code. SUMMARY COMPENSATION TABLE The following table shows the total compensation paid or accrued during the last two fiscal years ended December 31, 2023 and 2022
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(1) All 2023 amounts, except for Mr. Nath and Mr. Falvey, have been converted from GBP to USD using the 2023 average FX rate (£1:$1.2437). All 2022 amounts, except those for Mr. Nath, have been converted from GBP to USD using the 2022 average FX rate (£1: (2) The amounts reported in this column represent bonuses paid to each named executive officer based on the Compensation and Leadership Development Committee’s determination of performance against 2023 and 2022 goals, respectively, in its discretion. (3) The amount reported in the Stock Awards and Option Awards column represents the aggregate grant date fair value of time-based RSUs and time-based share options granted to each of the named executive officers in the applicable year, calculated in accordance with the provisions of FASB ASC Topic 718. The assumptions we used in calculating these amounts for 2023 are included in Note 8 of our audited consolidated financial statements for the year ended December 31, 2023 included in our Annual Report on Form 10-K, filed with the SEC on February 29, 2024. The assumptions we used in calculating these amounts for 2022 are included in Note 10 of our audited consolidated financial statements for the year ended December 31, 2022 included in our Annual Report on Form 10-K, filed with the SEC on February 28, 2023. The amounts reported in the Summary Compensation Table for these time-based RSUs and options may not represent the amounts that the named executive officers will actually realize from the awards. Whether, and to what extent, a named executive officer realizes value will depend on our actual operating performance, share price fluctuations and the named executive officer’s continued employment. (4) Effective August 1, 2022, Mr. Nath was appointed as our Chief Executive Officer and a member of our Board. (5) All other compensation for Mr. Nath in 2023 consists of (i) a one-time $250,000 cash contribution towards moving and relocation costs, (ii) housing allowance of (6) (9) All other compensation for (10) Mr. Falvey resigned from his role as chief financial officer to pursue other opportunities effective October 26, 2023 and his employment terminated effective November 3, 2023. The amount reported for salary represents the amount earned through November 3, 2023. (11) All other compensation for Mr. Falvey consists of (i) a EMPLOYMENT AGREEMENTS, CHANGE OF CONTROL AND SEVERANCE ARRANGEMENTS WITH NAMED EXECUTIVE OFFICERS Kabir Nath 48 General Terms. Effective August 1, 2022, we entered into an employment agreement with Mr. Nath in connection with his appointment as our Chief Executive Officer. The Mr. Nath's employment agreement provides for an annual base salary of $580,000 (upon Mr. Nath's relocation to the United Kingdom, such salary will be paid in pound sterling (“GBP”) and be equal to the greater of (i) £431,000 GBP or (ii) the GBP equivalent of $580,000 U.S. dollars calculated at the then-prevailing exchange rate), which is subject to annual review and redetermination. Pursuant to his employment agreement, Mr. Nath is eligible to earn an annual incentive bonus, with a target bonus amount of 60% of his then-current annual base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances) as determined by our Board in its discretion. In addition, Mr. Nath will receive (i) a housing stipend of £12,000 per month through August 2023; (ii) a one-time reimbursement payment of up to $5,000 for attorneys’ fees; and (iii) a one-time cash payment of $250,000 Payments Upon Termination. Either party may terminate the employment agreement upon ninety (90) days’ written notice. The Company may terminate the Employment Agreement at any time for “cause” (as such term is defined in the employment agreement). Mr. Nath may terminate the Employment Agreement upon thirty (30) days’ written notice for “good reason” (as such term is defined in the Employment Agreement), subject to Company’s right to cure the deficiency. In the event we terminate Mr. Nath’s employment without “cause” or Mr. Nath terminates his employment for “good reason”, Mr. Nath is entitled to a cash severance payment equal to one year’s annual salary plus the target annual bonus amount for the year in which such termination occurs. Guy Goodwin General Terms. In July 2021, we entered into an employment agreement with Dr. Goodwin in connection with his appointment as our Chief Medical Officer. Dr. Goodwin’s employment agreement provides for a base salary of £324,450 ($446,346), which is subject to annual review and redetermination. In addition, Dr. Goodwin is entitled to participate in our executive variable cash compensation program. In his employment agreement, Dr. Goodwin is eligible to earn an annual incentive bonus, with a target bonus amount of 35% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances) as determined by our Board of Directors in its discretion. Dr. Goodwin is only entitled to payment of a bonus payment if he is in the Company’s employment on the date that the bonus is paid and is not eligible for a bonus payment if he is subject to any disciplinary action or investigation at the date any bonus is being considered or paid. Dr. Goodwin is also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time. Payments upon Termination. The Company may, in its discretion, terminate Dr. Goodwin’s employment at any time with immediate effect by providing notice to Dr. Goodwin that it is exercising its right and will make a payment in lieu of notice (“PILON”). Such PILON is equal to the base salary which Dr. Goodwin would be entitled to receive during the notice period of three months less deductions required by law and will be paid within 28 days. Dr. Goodwin is subject to immediate termination and is not entitled to any further payment, including any PILON which the Company is entitled to recover if payment was already made, other than amounts accrued as of the termination date in the event he is terminated for certain reasons for cause, including gross misconduct, serious breach of his employment agreement, gross negligence or incompetence and certain other requirements, as set forth in his employment agreement. In the event Dr. Goodwin is terminated for any reason, under most circumstances, the Company is required to reimburse him for any unused holiday entitlements. Following service of notice to terminate the employment by either party, which is required to be given with not less than three months’ prior written notice, the Company may place Dr. Goodwin on garden leave for the whole or part of the remainder of his employment. Under garden leave, Dr. Goodwin would receive his base salary for the period, but would not be entitled to receive any bonus or other incentive in respect of the period of garden leave. If Dr. Goodwin is terminated other than for misconduct, lack of capability or poor performance, or if Dr. Goodwin terminates employment in response to a fundamental breach of contract by the Company within 12 months following a change of control of the Company (as defined in the employment agreement), subject to certain conditions, Dr. Goodwin is entitled to (a) 12 months’ base salary, (b) the pro rata bonus Dr. Goodwin would have 49 received for the year in which his employment is terminated had he not been dismissed, but not including any pro rata bonus for a notice period which is not worked and (c) an amount equivalent to the cost to the Company of providing Dr. Goodwin with his other employment benefits for 12 months. Matthew Owens General Terms. Effective February 1, 2022, we entered into an employment agreement with Mr. Owens in connection with his appointment as our Chief Legal Officer and General Counsel. Mr. Owens’ employment agreement provides for an initial base salary of £300,000 ($371,130), which is subject to annual review and redetermination. In addition, Mr. Owens is entitled to participate in our executive variable cash compensation program. Pursuant to his employment agreement, Mr. Owens is eligible to earn an annual incentive bonus, with a target bonus amount of 40% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances). To assist with his relocation to the U.K., we agreed to pay a cash contribution towards housing costs of £10,000 ($12,371) per month through August 2023 and to provide tax advisory services in connection with the preparation and filing of tax returns for the first two tax years of his employment. Mr. Owens is also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time. His employment agreement also provides for a pension contribution equivalent to 8% of his monthly base salary. Payments upon Termination. The Company may, in its discretion, terminate Mr. Owens' employment at any time with immediate effect by providing notice to Mr. Owens that it is exercising its right and will make a Mr. Owens is subject to immediate termination and is not entitled to any further payment, including any PILON which the Company is entitled to recover if payment was already made, other than amounts accrued as of the termination date in the event he is terminated for certain reasons for cause, including gross misconduct, serious breach of her employment agreement, gross negligence or incompetence and certain other requirements, as set forth in her employment agreement. In the event Mr. Owens is terminated for any reason, under most circumstances, the Company is required to reimburse him for any unused holiday entitlements. Following service of notice to terminate the employment by either party, which is required to be given with not less than nine months’ prior written notice, the Company may place Mr. Owens on garden leave for the whole or part of the remainder of her employment. Under garden leave, Mr. Owens would receive his base salary for the period, but would not be entitled to receive any bonus or other incentive in respect of the period of garden leave. If Mr. Owens is terminated other than for misconduct, lack of capability or poor performance, or if Mr. Owens terminates employment in response to a fundamental breach of contract by the Company within 12 months following a change of control of the Company (as defined in the employment agreement), subject to certain conditions, Mr. Owens is entitled to (a) 12 months’ base salary, (b) the pro rata bonus Mr. Owens would have received for the year in which his employment is terminated had he not been dismissed, but not including any pro rata bonus for a notice period which is not worked and (c) an amount equivalent to the cost to the Company of providing Mr. Owens with his other employment benefits for 12 months. Ekaterina Malievskaia General Terms. In September 2020, we entered into an employment agreement with Dr. Malievskaia in connection with her continued employment as our Chief Innovation Officer. This employment agreement ended when Dr. Malievskaia stepped down from her executive officer role in June 2023. Once, she stepped down from her executive officer role, Dr. Malievskaia received compensation for her service on the board in accordance with our Director Compensation Policy. Dr. Malievskaia’s employment agreement 50 Michael Falvey General Terms Mr. Falvey's employment agreement provided for a initial base salary of $430,000, which was subject to annual review and redetermination. In addition, Mr. Falvey was entitled to participate in our executive variable cash compensation program. In his employment agreement, Mr. Flavey was eligible to earn an annual incentive bonus, with a target bonus amount of 45% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances) as determined by our Board of Directors in its Separation Agreement. We and Mr. Falvey entered into a separation agreement and release dated October 24, 2023, pursuant to which his employment 2020 Share Option and Incentive Plan In September 2020, we adopted the 2020 Plan. The 2020 Plan allows the Compensation and Leadership Development Committee to make equity-based and cash-based incentive awards to our officers, employees, directors and other key persons (including consultants). We have initially reserved 2,074,325 ordinary shares (the “Initial Limit”) for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by four percent of the outstanding number of ordinary shares on the immediately preceding December 31, or such lesser number of shares as determined by our Compensation and Leadership Development Committee (the “Annual Increase”). This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. The ordinary shares underlying any awards that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by us prior to vesting, satisfied without any issuance of shares, expire or are otherwise terminated (other than by exercise) under the 2020 Plan will be added back to the ordinary shares available for issuance under the 2020 Plan. The maximum aggregate number of shares that may be issued in the form of incentive share options shall not exceed the Initial Limit cumulatively increased on January 1, 2022 and on each January 1 thereafter by the lesser of the Annual Increase for such year or 2,074,325 ordinary shares. The 2020 Plan is administered by our Compensation and Leadership Development Committee. Our Compensation and Leadership Development Committee has full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants, and to determine the specific terms and conditions of each award, subject to the provisions of the 2020 Plan. Persons eligible to participate in the 2020 Plan will be those full or part-time officers, employees, non-employee directors and other key persons (including consultants) as selected from time to time by our Compensation and Leadership Development Committee in its discretion. The 2020 Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under Section 422 of the Code, options intended to qualify as U.K. tax advantaged options under our company share option plan, or CSOP, which is a sub-plan under the 2020 Plan and options that do not so qualify for any tax advantages. Other than the nominal cost options granted to non-U.S. tax persons in lieu of restricted share units, the option exercise price of each option will be determined by our Compensation and Leadership Development Committee but may not be less than 100% of the fair market value of our ordinary shares on the date of grant. The term of each option will be fixed by our Compensation and Leadership Development Committee and 51 may not exceed ten years from the date of grant. Our Compensation and Leadership Development Committee development committee will determine at what time or times each option may be exercised. Our Compensation and Leadership Development Committee may award share appreciation rights subject to such conditions and restrictions as it may determine. Share appreciation rights entitle the recipient to ordinary shares, or cash, equal to the value of the appreciation in our share price over the exercise price. The exercise price of each share appreciation right may not be less than 100% of the fair market value of the ordinary shares on the date of grant. Our Compensation and Leadership Development Committee may award restricted shares and restricted share units to participants subject to such conditions and restrictions as it may determine. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with us through a specified vesting period. Our Compensation and Leadership Development Committee may also grant ordinary shares that are free from any restrictions under the 2020 Plan. Unrestricted shares may be granted to participants in recognition of past services or other valid consideration and may be issued in lieu of cash compensation due to such participant. Our Compensation and Leadership Development Committee may grant cash bonuses under the 2020 Plan to participants, subject to the achievement of certain performance goals. The 2020 Plan provides that in the case of, and subject to, the consummation of a “sale event” as defined in the 2020 Plan, all outstanding awards may be assumed, substituted or otherwise continued by the successor entity. To the extent that the successor entity does not assume, substitute or otherwise continue such awards, then (i) all share options and share appreciation rights will automatically become fully exercisable and the restrictions and conditions on all other awards with time-based conditions will automatically be deemed waived, and awards with conditions and restrictions relating to the attainment of performance goals may become vested and non-forfeitable in connection with a sale event in the Compensation and Leadership Development Committee’s discretion and (ii) upon the effectiveness of the sale event, the 2020 Plan and all awards will automatically terminate. In the event of such termination, (i) individuals holding options and share appreciation rights will be permitted to exercise such options and share appreciation rights (to the extent exercisable) prior to the sale event, or (ii) we may make or provide for a cash payment to participants holding options and share appreciation rights equal to the difference between the per share cash consideration payable to shareholders in the sale event and the exercise price of the options or share appreciation rights (to the extent then exercisable). Our Board may amend or discontinue the 2020 Plan and our Compensation and Leadership Development Committee may amend the exercise price of options and amend or cancel outstanding awards for purposes of satisfying changes in law or any other lawful purpose but no such action may adversely affect rights under an award without the holder’s consent. Certain amendments to the 2020 Plan require the approval of our shareholders. No awards may be granted under the 2020 Plan after the date that is ten years from the date of shareholder approval. OUTSTANDING EQUITY AWARDS AT The following table sets forth information concerning the outstanding equity awards held by each of the named executive officers as of December 31,
(1) Market value has been computed in accordance with SEC rules as the number of unvested shares or units multiplied by the closing price per share of our ADSs on The Nasdaq Global Select Market as of December (2) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting 53 date. The vesting commencement date is August 1, 2022. This grant was awarded outside the 2020 Plan pursuant to the inducement grant exception under Nasdaq Listing Rule 5635(c). (3) Options vest over a 4 year service period in 48 equal monthly installments, subject to continued service through each applicable vesting date. The vesting commencement date is February 2, 2023. This grant was made under the 2020 Plan. (4) The restricted share units vest in four equal annual installments, subject to continued service through each applicable vesting date. The vesting commencement date is August 1, 2022. This grant was made under the 2020 Plan. (5) The restricted share units vest in four equal annual installments, subject to continued service through each applicable vesting date. The vesting commencement date is February 2, 2023. This grant was made under the 2020 Plan. (6) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is August (9) Options vest in four equal annual installments, subject to continued service through each applicable vesting date. The vesting commencement date is February 2, 2023. This grant was made under the 2020 Plan. (12) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is September 18, 2020. This grant was made under the 2020 Plan. (13) The restricted share units are subject to 25% vesting upon the earlier of (i) the one year anniversary of the date of grant, or (ii) the first day following the six-month anniversary of the listing of the Company’s ordinary shares on any stock exchange on which the closing price of the shares is 20% higher than the listing price for at least five consecutive trading days. They vest quarterly thereafter over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is August 12, 2021. This grant was made under the 2017 Plan. (14) Options vested over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is December 6, 2021. Pursuant to the terms of his separation agreement, the vesting was accelerated for 25% of the shares underlying this grant. This grant was made under the 2020 Plan. PAY VERSUS PERFORMANCE The following table shows the total compensation for each of our principal executive officers (each a "PEO") and the average compensation for our other named executive officers during the last
(1) Mr. Goldsmith served as our PEO throughout 2021 and during 2022 until July 31, 2022. (2) Mr. Nath served as our PEO beginning on August 1, 2022. (3) For fiscal 2023, our non-PEO named executive officers were Guy Goodwin, Matthew Owens, Ekaterina Malievskaia and Michael Falvey. For fiscal 2022, our non-PEO named executive officers were Matthew Owens and Ekaterina Malievskaia. For fiscal 2021, our non-PEO named executive officers were Ekaterina Malievskaia, Guy Goodwin, Piers Morgan (our former Chief Financial Officer) and Nate Poulsen (our former General Counsel). 54 (4) The 2023 compensation actually paid to our PEO and the average compensation actually paid to our non-PEO named executives reflects the following adjustments from total compensation reported in the Summary Compensation Table:
(5) The 2022 compensation actually paid to our PEO and the average compensation actually paid to our non-PEO named executives reflects the following adjustments from total compensation reported in the Summary Compensation Table:
Analysis of the Information Presented in the Pay Versus Performance Table We generally seek to incentivize long-term performance, and therefore do not specifically align our performance goals 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, we are providing the following descriptions of the relationships between information presented in the Pay Versus Performance table. Compensation Actually Paid and Net Loss As a Compensation Actually Paid and TSR As shown in the following graph, the compensation actually paid to our SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS Equity Compensation Plans Table The following table sets forth information as of December 31,
(1) The weighted average exercise price is calculated based solely on outstanding share options. (2) Includes the following plans: our 2020 Plan, our 2017 Plan and our Employee Stock Purchase Plan (“ESPP”). (3) The Company initially reserved 2,074,325 of its ordinary shares for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by up to 4% of the outstanding number of ordinary shares on the immediately preceding December 31, or such lesser number of shares as determined by our Compensation and Leadership Development Committee. This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. The total number of ordinary shares that may be issued under the 2020 Plan was 57 up to a total of 340,053 ordinary shares to participating employees. The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2022 and each January 1 thereafter through January 1, 2022, by the lesser of (i) 1% of the outstanding number of ordinary shares on the immediately preceding December 31 or (ii) 510,058 ordinary shares. The number of shares reserved under the ESPP is subject to change in the event of a share split, share dividend or other change in our capitalization. On October 1, 2021, the Company launched the Share Incentive Plan and the ESPP, through which employees can purchase shares at a discounted price. At the end of each six month purchase period, shares will automatically be purchased at the lower of the opening and closing price of the shares for the purchase period minus a 15% discount. (4) Amount does not include any purchase rights accruing under the ESPP during the current purchase period, which commenced on November 1, (5) On August 1, 2022, we granted a non-qualified share option to purchase an aggregate of 600,000 shares to Mr. Nath in connection with his appointment as Chief Executive Officer. In accordance with Nasdaq Listing Rule 5635(c)(4), the non-qualified share option award was approved by Compensation and Leadership Development Committee and made as a material inducement to Mr. Nath’s entry into employment as our new Chief Executive Officer. The non-qualified share option has a 10-year term and vests as to one-fourth on August 1, 2023 (the first anniversary of his employment commencement date) and as to the remaining three-fourths in equal monthly installments over the following 36 months, subject to Mr. Nath remaining an employee on the applicable vesting dates. The non-qualified share option has other terms that mirror those of non-qualified share options granted under our 2020 Plan and the standard form of non-qualified share option agreement. AUDIT AND RISK COMMITTEE REPORT The Audit and Risk Committee oversees the accounting and financial reporting processes of COMPASS Pathways plc (the “Company”) and the audits of the Company’s financial statements, evaluates auditor performance, manages relations with the Company’s independent registered public accounting firm and evaluates policies and procedures relating to internal control systems. The Audit and Risk Committee operates under a written Audit and Risk Committee charter that has been adopted by the Board of the Company (the “Board”). All members of the Audit and Risk Committee currently meet the independence and qualification standards for audit committee membership set forth in the listing standards provided by Nasdaq and the U.S. Securities and Exchange Commission (“SEC”), and the Board has determined that Annalisa Jenkins and Linda McGoldrick are “audit committee financial experts,” as the SEC has defined that term in Item 407 of Regulation S-K. The Audit and Risk Committee members are not professional accountants or auditors. The members’ functions are not intended to duplicate or to certify the activities of management and the independent registered public accounting firm. The Audit and Risk Committee serves a board-level oversight role in which it provides advice, counsel and direction to management and the auditors on the basis of the information it receives, discussions with management and the auditors, and the experience of the Audit and Risk Committee’s members in business, financial and accounting matters. The Audit and Risk Committee oversees the Company’s financial reporting process on behalf of the Board. The Company’s management has the primary responsibility for the financial statements and reporting process, including the Company’s system of internal controls. In fulfilling its oversight responsibilities, the Audit and Risk Committee reviewed with management the audited financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, The Audit and Risk Committee also reviewed with PricewaterhouseCoopers LLP (“PwC”), our independent registered public accounting firm, which is responsible for expressing an opinion on the conformity of the audited financial statements with accounting principles generally accepted in the United States of America, their judgments as to the quality and the acceptability of the Company’s financial reporting and such other matters as are required to be discussed with the Committee by Public Company Accounting Oversight Board (“PCAOB”) AU 380, Communications with Audit Committees, and SEC Regulation S-X Rule 207, Communication with Audit Committees. The Audit and Risk Committee has received the written disclosures and the letter from PwC required by the applicable requirements of the PCAOB regarding PwC’s communications with the audit committee concerning independence. The Audit and Risk Committee has discussed with PwC its independence from management and the Company. In addition to the matters specified above, the Audit and Risk Committee discussed with PwC the overall scope, plans and estimated costs of their audit. The Audit and Risk Committee met with PwC periodically, with and without management present, to discuss the results of PwC’s examinations, the overall quality of the Company’s financial reporting and PwC’s reviews of the quarterly financial statements, and drafts of the quarterly and annual reports. Based on the reviews and discussions referred to above, and subject to the limitations of the Audit and Risk Committee’s role and responsibilities referred to above and in the Audit and Risk Committee charter, Audit and Risk Committee recommended to the Board that the Company’s audited financial statements should be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
The information contained in this Audit and Risk Committee report shall not be deemed to be “soliciting material,” “filed” with the SEC, subject to Regulations 14A or 14C of the Exchange Act, or subject to the liabilities of Section 18 of the Exchange Act. No portion of this audit and risk committee report shall be deemed to be incorporated by reference into any filing under the Securities Act, or the Exchange Act, through any general statement incorporating by reference in its entirety the proxy statement in which this report appears, except to the extent that we specifically incorporate this report or a portion of it by reference. In addition, this Audit and Risk Committee report shall not be deemed filed under either the Securities Act or the Exchange Act. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table and related footnotes set forth information with respect to the beneficial ownership of our ordinary shares, as of •each beneficial owner of more than 5% of our ordinary shares; •each of our named executive officers and directors; and •all of our current executive officers and directors as a group. Beneficial ownership is determined in accordance with the rules and regulations of the SEC. Under these rules, beneficial ownership includes any shares as to which a person has sole or shared voting power or investment power. In computing the number of ordinary shares beneficially owned by a person and the percentage ownership of that person, ordinary shares subject to options, or other rights held by such person that are currently exercisable or will become exercisable within 60 days of Unless otherwise indicated, addresses of the directors, executive officers and named beneficial owners are in care of COMPASS Pathways plc, 3rd Floor, 1 Ashley Road, Altrincham, Cheshire WA14 2DT, United Kingdom.
* Represents beneficial ownership of less than one percent. (1) Based 61 (2) Consists of (i) 3,858,000 ordinary shares and (ii) 2,976,253 ordinary shares underlying outstanding warrants. The Warrants may not be exercised to the extent that doing so would result in the holder of the Warrants (together with the holder’s affiliates and any other persons acting as a group together with the holder or any of the holder’s affiliates) beneficially owning more than 9.99% of the shares of Ordinary Shares outstanding immediately prior to or after giving effect to such exercise (the “Ownership Limitation”). Based on a Schedule 13G filed with the SEC on August 28, 2023, by TCG Crossover Fund I, L.P. (“TCG Crossover I”), CG Crossover GP I, LLC ("TCG Crossover GP I"); TCG Crossover Fund II, L.P. ("TCG Crossover II"), TCG Crossover GP II, LLC (“TCG Crossover GP II”) and Chen Yu. TCG Crossover I is the record holder of (i) 964,500 of these ordinary shares and (ii) 964,500 of the shares underlying these outstanding warrants. TCG Crossover GP I is the general partner of TCG Crossover I and may be deemed to have voting, investment and dispositive power with respect to the securities held by TCG Crossover I. TCG Crossover II is the record holder of (i) 2,893,500 of these shares and (ii) 2,893,500 of the shares underlying these outstanding warrants. TCG Crossover GP II is the general partner of TCG Crossover II and may be deemed to have voting, investment and dispositive power with respect to the securities held by TCG Crossover II. Chen Yu is the sole managing member of TCG Crossover GP I and TCG Crossover GP II and may be deemed to share voting, investment and dispositive power with respect to these securities. Each of TCG Crossover GP I, TCG Crossover GP II and Chen Yu disclaim beneficial ownership except to the extent of their pecuniary interest therein. The address for individual and entities listed above is 705 High Street, Palo Alto, California 94301. (3) Represents (i) (4) Represents March 27, 2024. Mr. Goldsmith and Dr. Malievskaia are married but they expressly disclaim beneficial ownership of each other’s shares in the Company. Pursuant to the terms of call option agreements dated May 19, 2020, as amended and restated on July 21, 2020, as further amended and restated on September 9, 2020, and as further amended effective February 15, 2023, Lars Christian Wilde, a former co-founder of the Company, has an option to purchase 776,565 of our ordinary shares for an exercise price of less than £0.01 per share from each of Mr. Goldsmith and Dr. Malievskaia, exercisable at any time following our initial public offering until September 9, 2033. (5) Represents (6) Represents (i) (7) Represents (i) (8) Represents (i) (9) Represents 11,556 ordinary shares underlying options to purchsae ordinary shares from the Company exercisable within 60 days after March 27, 2024. (10) Represents (i) 89,049 ordinary shares and (ii) (11) Represents (12) Represents (i) 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC and (ii) 62 within 60 days after (13) Represents (14) Represents (1) Represents (i) 1,733,882 ordinary shares, (ii) 2,968 ordinary shares issuable upon the settlement of RSUs releasable within 60 days of March 27, 2024 and (iii) 1,222,463 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after March 27, 2024 held by our current officers and directors. DELINQUENT SECTION 16(a) REPORTS Under Section 16(a) of the Exchange Act, directors, executive officers, our principal accounting officer and beneficial owners of 10% or more of our common stock, or reporting persons, are required to report to the SEC on a timely basis the initiation of their status as a reporting person and any changes with respect to their beneficial ownership of our common stock. Based solely on our review of copies of such forms that have been filed with the SEC, or written representations from reporting persons, we believe that during the fiscal year ended December 31, requirements. CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH RELATED PERSONS Other than the compensation arrangements described above under the sections “Director Compensation” and “Executive Compensation” and the transactions described below, in the period from January 1, AGREEMENTS WITH OUR EXECUTIVE OFFICERS AND DIRECTORS We have entered into employment agreements with our executive officers, a separation agreement with Michael Falvey and service agreements with our non-executive directors. These agreements contain customary provisions and representations, including confidentiality, non-competition, non-solicitation and inventions assignment undertakings by the executive officers. However, the enforceability of the non-competition provisions may be limited under applicable law. FAMILY RELATIONSHIPS George Goldsmith, our co-founder and former chief executive officer and Board Chair, is married to Ekaterina Malievskaia, our co-founder and former Chief Innovation Officer and INSURANCE AND INDEMNIFICATION To the extent permitted by the Companies Act 2006 and in accordance with our Articles of Association, we are empowered to indemnify our directors against any liability they incur by reason of their directorship. We maintain directors’ and officers’ insurance to insure such persons against certain liabilities. We also enter into a deed of indemnity with each of our directors and executive officers. These agreements and our Articles of Association require us to indemnify our directors and executive officers to the fullest extent permitted by law. RELATED PARTY TRANSACTION POLICY We have adopted a related party transaction policy. Pursuant to this policy, the Audit and Risk Committee has the primary responsibility for reviewing and approving or disapproving “related party transactions,” which are transactions between us and related parties in which the related party has a direct or indirect material interest. For purposes of this policy, a related party is defined as a director, executive director, nominee for director, or greater than 5% beneficial owner of any class of our voting securities, and their immediate family members. DELIVERY OF PROXY MATERIALS Our EACH ORDINARY SHAREHOLDER IS URGED TO COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY FORM. EACH ADS HOLDER IS URGED TO COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ADS PROXY CARD TO CITIBANK, N.A., THE DEPOSITARY FOR THE ADSs. ADDITIONAL INFORMATION U.K. STATUTORY ANNUAL ACCOUNT AND REPORTS OF THE BOARD OF DIRECTORS AND AUDITORS OF COMPASS PATHWAYS PLC FOR THE YEAR ENDED DECEMBER 31, Consistent with its obligations under the U.K. Companies Act 2006, our Board will present at the AGM our U.K. statutory annual accounts and reports for the year ended December 31, SHAREHOLDERS' RIGHT TO CALL A GENERAL MEETING Our shareholders have the right to call a meeting of our shareholders. The U.K. Companies Act 2006 generally requires the directors to call a general meeting once we have received requests to do so from shareholders representing at least 5% of our paid-up shares entitled to vote at a general meeting. The U.K. Companies Act 2006 generally prohibits shareholders of a U.K. public limited company from passing written resolutions. However, significant shareholders would, in any case, still have the power to call a general meeting and propose resolutions. These provisions are mandatory under the U.K. Companies Act 2006 and cannot be waived by our shareholders. SHAREHOLDER PROPOSALS Pursuant to Rule 14a-8 under the Exchange Act, in order to be considered for inclusion in our proxy statement for our Under Section 338 of the U.K. Companies Act 2006, shareholders representing at least 5% of holders entitled to vote on a resolution at an annual general meeting may require the Company to include such resolution in its notice of an annual general meeting. Provided the applicable thresholds are met, notice of the resolution must be received by the Company at the Office of the Company Secretary, 3rd Floor, 1 Ashley Road, Altrincham, Cheshire, WA14 2DT, United Kingdom at least six weeks prior to the date of the annual general meeting, or, if later, at the time notice of the annual general meeting is delivered to shareholders. QUESTIONS? If you have any questions or need more information about the AGM please write to us at: Ben Harber Company Secretary COMPASS Pathways plc 3rd Floor 1 Ashley Road Altrincham Cheshire WA14 2DT United Kingdom Annex A DIRECTORS’ REMUNERATION REPORT This part of the Remuneration Report sets out the Key considerations when determining the Policy The Policy was designed by the Committee with a number of specific principles in mind: •attract, retain and motivate high •encourage a corporate culture that promotes the highest level of integrity, teamwork and ethical standards; •be competitive against appropriate market benchmarks (being predominantly the US biotech sector) and have a strong link to performance, providing the ability to earn above-market rewards for strong performance; •be simple and understandable, both internally and externally; •encourage increased equity ownership to motivate executives in the overall interests of shareholders, the Company, employees and •take due account of good governance and promote the long-term success of the Company. A-1 In seeking to achieve the above objectives, the Committee is mindful of the views of a broad range of stakeholders in the business and accordingly takes account of a number of factors when setting remuneration including: market conditions; pay and benefits in relevant comparator organisations; terms and conditions of employment across the Company; the Company’s risk appetite; the expectations of institutional shareholders; the Nasdaq or SEC. In The Directors identify any conflicts of interest at the beginning of each Board meeting and the beginning of each Committee meeting. Mr. Goldsmith who served as The Key Changes to the Policy The Committee maintains that the overall structure of remuneration is appropriate and no fundamental structural changes are proposed. The key changes to the Policy reflect developments in market and best practices, including: •establishing the maximum annual bonus payable to an Executive Director at 100% of base salary for each Executive Director; 2 •providing flexibility for annual bonus to be payable in cash or shares, at the discretion of the Committee; •establishing for purposes of the UK pension scheme that maximum contribution, cash supplement (or combination thereof) payable to an Executive Director at 5% of base salary or such lesser level as is available to the general workforce; and •introduction of new Compensation Recovery Policy, which was adopted by the Company to comply with the mandatory compensation "clawback" requirements under applicable Nasdaq listing rules. The Policy for Executive Directors During The total remuneration for the Executive Directors is made up of the following elements: •salary; •benefits; •annual bonus; •long-term incentive awards; and •Pension/401k contribution. 3 Nasdaq IPO, the Company has issued equity under these plans and has issued an inducement grant, on such terms as are defined under applicable
4
5
The Committee operates the annual bonus and 2020 Plan, in accordance with their rules, and where relevant, 6.to make certain exceptions to the Compensation Recovery Policy (to the extent permitted under applicable Nasdaq listing rules) and to determine whether to recover, and if so, the method for recovering, erroneously awards compensation from current and former Executive Directors in the event of an accounting restatement. In certain exceptional circumstances, such as a material acquisition/divestment of a Group business or a change in the broader business environment, which mean the original performance conditions are no 7 longer appropriate, the Committee may adjust the objectives, alter weightings or set different measures as necessary, to ensure the conditions achieve their original purpose and are not materially less difficult to satisfy. The Directors' service contracts and letters of appointment are kept for inspection at the Company's registered office. The Company has a classified Board with each Director serving a three-year term; each Director must seek re-election at the annual general meeting of shareholders at the end of his or her three-year term. Historical equity incentive awards Awards which were granted prior to 18 September 2020 are disclosed separately in this Remuneration Report in the Statement of Directors’ Shareholding and Share Interests section. These awards remain eligible to vest, based on their original terms which are described separately in the Directors' Remuneration Report. Annual bonus The annual bonus is designed to drive the achievement of the Company’s strategic and corporate objectives. These targets are agreed by the Board and selected because of their importance in value creation for shareholders. Objectives are weighted for Executive Directors in proportion to the degree of importance of that objective for the Company. The weightings are agreed by the Committee. Remuneration on recruitment The remuneration package for any new Executive Director will be determined by the Committee in accordance with the terms of the Policy at the time of appointment (including salary, benefits, annual bonus, long-term incentive awards and pension). It is recognised that in order to attract and recruit talented individuals the Policy needs to allow sufficient flexibility with respect to remuneration on recruitment. The following policies apply to the remuneration on recruitment of new Executive Directors: 8 Salary: Base salary will be determined based on the responsibilities of the role, experience of the individual and current market rates. It may be considered necessary to appoint a new Executive Director on above or below market rates (e.g. to reflect limited Board experience). In such circumstances, phased increases above those of the wider workforce may be required over an appropriate time period, to bring the salary to the desired market level, subject to the continued development in the role. Annual bonus: The ongoing annual bonus maximum will be in line with that outlined in the policy table for existing Executive Directors, Long-term incentive awards: 2020 Plan awards are granted in line with the policy outlined for existing Executive Directors. An initial award may be made on the date of appointment or shortly following an appointment. For internal appointments, existing awards will continue on their original terms. Benefits: Benefits provided should be in line with those of existing Executive Directors. For external and internal appointments, where required to meet business needs, reasonable relocation support will be provided. In addition, if it becomes necessary to appoint a new Executive Director from outside the UK, additional benefits may be provided to reflect local market norms or legislation. Pension/ Sign-on payments and buy-out awards: To enable the recruitment of exceptional talent, the Committee may offer additional cash and/or share-based remuneration to take account of and compensate for remuneration that the Executive Director is required to relinquish when leaving a former employer. The Committee will seek to structure any such replacement awards to be no more generous overall in terms of 9 quantum or vesting than the award to be forfeited from the previous employer and will take into account the timing, form and performance requirements of the awards forgone. Where appropriate, any long-term incentive awards will be granted under the 2020 Plan, however, the Committee will have discretion to make use of the flexibility to make awards under any relevant exemptions in the For an internal Executive Director appointment, any variable pay element awarded in respect of the prior role will be allowed to pay out according to its terms. In addition, any other contractual remuneration obligations existing prior to appointment may continue. The fees for any new Policy for payments on loss of office The Company does not have a policy of fixed term employment contracts, however, the Directors are required to retire and are entitled to put themselves forward for re-election at the AGM in accordance with their respective Director class, as prescribed by the Company’s articles of association (“Articles of Association”). The notice period for the current Chief Executive Officer’s employment contract is 90 days, provided however, that if the Company terminates his employment contract without cause, the Chief Executive Officer is entitled to a cash severance payment equal to one year’s annual salary plus the target annual bonus amount for the year in which such termination The Committee’s approach to payments in the event that an Executive Director’s employment is terminated is to take account of the individual circumstances including the reason for termination, 10 individual performance, contractual obligations, potential claims the Executive Director might have against the Company and the terms of the equity incentive plans in which the Executive Director participates. Termination by notice from the Company: up to 12 months’ notice, with the discretion for the Committee to make a payment in lieu of notice for base salary, pension and other benefits that would otherwise have been paid during the notice period. Annual bonus: except for the current Chief Executive Officer who is entitled to his target annual bonus in the event his employment is terminated by the Company without "cause" (as defined in his employment agreement) or by the Chief Executive Officer for "good reason" (as defined in his employment agreement), there is no automatic contractual entitlement to bonus or pro-rata bonus on termination, although this may be considered at the discretion of the Committee. Long-term incentives: whether any long-term incentive awards would vest and be exercisable upon loss of office would be subject to the relevant plan rules under which such award was granted. The 2020 Plan allows vesting and exercise of awards in the event of death, retirement, ill-health, injury, redundancy and any other reason at the discretion of the Committee. The Committee retains discretion to determine the extent to which the award will vest, taking into consideration the circumstances. Unvested awards normally lapse, although the Committee retains the power to determine, in accordance with the “good leaver” provisions of the relevant plan rules, what proportion of unvested awards will be retained and what proportion will lapse. In determining this, the Committee will give consideration to the reason for leaving, the extent of achievement of performance objectives at the date of leaving and may decide to pro-rate awards. Change of Control: on a change of control, all unvested awards vest on the date of change of control. Change of control provisions in the former Chief Innovation Officer’s 11 including by way of constructive dismissal) less any sums paid by way of notice or payment in lieu of notice. The former Chief Innovation Officer's employment agreement ended in June 2023 when she stepped down from her executive role. Additional payments: the Committee reserves the right to make payments it considers reasonable under a settlement agreement, including payment or reimbursement of reasonable legal and professional fees, untaken holiday and any payment for the settlement of potential claims against the Company in the UK or other jurisdictions. Payment or reimbursement of reasonable outplacement fees may also be provided. Compensation Recovery Policy During 2023, we adopted our Compensation Recovery Policy designed to comply with the mandatory compensation “clawback” requirements under Nasdaq rules that became effective as of 1 December 2023. Under this policy, in the event of certain accounting restatements, we will be required to recover erroneously received incentive compensation tied to a financial reporting measure (including measures related to stock price and total shareholder return) from our Executive Directors. The amount of erroneously awarded compensation to be recovered shall equal the excess of the amount actually received over the amount that would have been received had the financial statements been correct in the first instance. Where the financial reporting measure is related to stock price or total shareholder return, the Committee shall make a reasonable estimate of the effect of the accounting restatement upon the stock price or total shareholder return and the amount of the compensation to be recovered. The Committee also has the discretion to make certain exceptions to the Compensation Recovery Policy (to the extent permitted under applicable Nasdaq listing rules) and to determine whether to recover, and if so, the method for recovering, erroneously awarded compensation from current and former Executive Directors in the event of an accounting restatement. Currently, none of the incentive compensation payable to our Executive Directors is based on a financial reporting measure and therefore none of our current compensation is subject to recovery under this policy. 12 The Directors' service contracts are available for inspection at the Company's The Policy for the The Board approves fees payable to the The Policy for the Chief Executive Officer (CEO) The Board approves any compensation paid to the Chief Executive Officer The Policy for Non-Executive Directors The Board approves the fees payable to the Company’s non-Executive Directors.
14 Statement of consideration of employees’ pay and remuneration conditions elsewhere in the Group The Company does not formally consult with employees when drawing up the Policy. However, the Committee is made aware of employment conditions in the wider Group. The same broad principles apply to the Policy both for the Executive Directors and the wider employee population. However, the remuneration for the Executive Directors has a stronger emphasis on variable pay than for other employees. In particular, the following approach is used for the wider employee population in the Group: •Salaries, benefits and pensions or matching contributions under our 401(k) plan, as applicable, are compared to appropriate market rates and set at approximately mid market level with allowance for role, responsibilities and experience. •When setting salary levels for the Executive Directors, the Committee considers the salary increases provided to other employees. •An annual bonus plan is available to all employees and is based on business and individual performance. Payments under the bonus plan are entirely discretionary. 15 ANNUAL REPORT ON REMUNERATION Single total figure of remuneration of each Director (audited). The Directors received the following remuneration for the years ended 31 December
* 1George Goldsmith served as chief executive officer until 1 August 2022, he served as Executive Chair from 1 August 2022 until 31 December 2022 and he was appointed as Non Executive Director, effective from 1 January 2023. 2Ekaterina Malievskaia was appointed as Non Executive Director, effective from 17 June 2023. 3 Daphne Karydas was appointed as Non Executive Director, effective 18 September 2023. Her remuneration has been pro-rated above. **Relates to health insurance, life assurance, income protection insurance, pension/401(k) contributions, and housing allowance. Our Chief Executive Officer received $376,155 in compensation during 2023, which includes a housing allowance of $104,471 and a one-time cash contribution towards moving and relocation costs of $250,000. Our Chief Executive Officer also received $12,207 in 401(k) contributions and $3,600 in relation to health savings account contributions and $5,876 in relation to tax advice paid by the company on his behalf during 2023.i) No Director is currently in receipt of a pension contribution. Each Director is either not entitled to a pension payment or has opted out of receiving it. There Illustrations of Base Case, Expected and Maximum remuneration for the Executive Scenarios The charts set out for illustrative purposes only, what annual remuneration the Company expects the Executive The assumptions used in the calculations are set out below:
1)Base case: this illustration assumes a fixed base case, as set out above. This illustration assumes no annual bonus; 2)Expected case: this illustration assumes the base case remuneration set out above, plus an annual bonus. We make the assumption that The Group has used the exchange rate Annual performance bonus In During a series of meetings in December 2023 and January 18 Director individual performance. The Compensation and Leadership Development Committee reviewed the following corporate goals and based on the results approved an overall average The goals were as follows: Corporate Goals and Achievements • • •Strengthened balance sheet through equity and debt financings raising gross proceeds of approximately $185 million with potential additional gross proceeds of approximately $160 million dependent upon full exercise of warrants for cash; •Expanded shareholder base and attracted new leading biotech investors; •Took key steps to prepare for a successful and scalable commercial launch of COMP360 treatment, if regulatory approval is obtained, that will support access for as many patients as possible, including applying for CPT III code to cover in-person drug monitoring services associated with the administration of psychedelic drugs and entering into research collaborations with Greenbrook and Hackensack; •Progressed development of a pipeline of new drug and technology assets to increase the value of •Developed a high-performing team and a mission-driven organisation committed to the highest standards of quality and compliance. 19 Long term incentive awards during the year ended 31 December During the Payments to past Directors (audited) There were no payments to past Directors made during the financial year ending 31 December Payments for Loss of Office (audited) There were no payments made to Directors for Loss of Office during the financial year ending 31 December 20 Statement of Directors’ Shareholding and Share Interests (audited) The Company does not have a formal policy on Executive or Non-Executive Director shareholdings. The table below details the total number of shares owned (including their beneficial interests), the total number of share options held, the number of share options vested but not yet exercised and the total number of RSUs held as at 31 December
*Includes 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares.
*Includes 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares. The interests of the Directors in the Company’s share options and RSUs as at 31 December
(1) Price per share has been updated from 16.85 to 17.00 due to an error in the disclosure in 2022. (2) Price per share has been updated from 0.01 to N/A due to an error in the disclosure in 2022. (3) Price per share has been updated from 1.40 to 1.32 due to an error in the disclosure in 2022. (4) Price per share has been updated from 2.40 to 2.26 due to an error in the disclosure in 2022. (5) Price per share has been updated from 9.44 to 9.41 due to an error in the disclosure in 2022. (6) Price per share has been updated from 32.66 to 33.83 due to an error in the disclosure in 2022. (7) Price per share has been updated from 35.25 to 35.30 due to an error in the disclosure in 2022. 22 All options are subject to service rather than performance conditions. The options vest monthly over 4 years with a 1 year 25% cliff for those granted the one-year anniversary of the date of grant or the date of the 2024 annual general meeting of shareholders.. The beneficial interests in the Company’s shares of the Directors and their families were as follows:
*Represents beneficial ownership of less than one percent. **Includes 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares. ***Mr. Goldsmith and Dr. Malievskaia are married but they expressly disclaim beneficial ownership of each other’s shares in the Company and do not include their spouse's shares in the number of shares beneficially owned in the table above. Pursuant to the terms of call option agreements dated 19 May 2020, as amended and restated on 21 July 2020, as further amended and restated on 9 September 2020, and as further amended effective 15 February 2023, Lars Christian Wilde, a former co-founder of the Company, has an option to purchase 776,565 of our ordinary shares for an exercise price of less than £0.01 per share from each of Mr. Goldsmith and Dr. Malievskaia, exercisable at any time following our initial public offering until 9 September 2033. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission, or SEC. These rules generally attribute beneficial ownership of securities to persons who 23 possess sole or shared voting power or investment power with respect to those securities and include ordinary shares that can be acquired within 60 days of 31 December Total Shareholder Return for Compass Pathways American Depositary Shares The graph below shows the Company’s performance, measured by total shareholder return, for the Company’s American Depositary Shares (“ADSs”), which are listed on Nasdaq and each representing one of the Company’s ordinary shares against the Nasdaq Composite Index (Nasdaq: CMPS vs NCI) and the Nasdaq Biotech Index (Nasdaq: CMPS vs NBI). We have selected these indices for this comparison because the Company has been admitted to trading on the Nasdaq exchange and operates as a Biotech and we consider them to be the most suitable comparator indices. 24 Chief Executive Officer total remuneration history 2020 was the first year that the Company prepared a Remuneration Report. We have taken the exemption not to disclose 5 years of history of remuneration and have chosen to disclose remuneration history for 2020 onwards. Percentage change in remuneration of the Executive and Non-Executive Directors The year on year movement to 31 December
*Represents Kabir Nath **Represents George Goldsmith The year on year movement to 31 December
25
*Represents Kabir **Represents George Goldsmith ***Represents Ekaterina Malievskaia 1.None of the Non-Executive Directors are eligible for an annual bonus and none claimed any benefits during the year. 2. 3.Effective 1 4. 5.Effective 18 September 2023, Daphne Karydas joined as Non-Executive Director. 6.The employee % change compares the total prorated remuneration earned by all employees in 2023 versus 2022. Relative importance of spend on pay The Committee considers the Company’s research and development expenditure relative to remuneration expenditure for all employees, to be the most appropriate metric for assessing overall spend on pay due to the nature and stage of the Company’s business. Dividend distribution comparators have not been included as the Company has no history of such transactions. The graph below illustrates the gross remuneration to all employees compared to research and development expenditure in 26 trials for the treatment of TRD and into trials for other indications, as well as developing other neuropsychiatric therapies. Structure and Role of Committee and Approach to Remuneration Matters The Committee is comprised of Annalisa Jenkins, who chairs the Committee, David Norton and Wayne Riley. The constitution of the Committee is in compliance with Nasdaq requirements. The members of the Committee are Independent Directors as defined in Rule 10C-1 under the US Securities Exchange Act of 1934 and under applicable The Committee’s approach to remuneration matters is to enable the Company to attract and retain talent, incentivise long-term value generation and effectively manage the Company’s cash resources. It is the belief of the Committee that this is best achieved through a greater emphasis on variable rather than fixed remuneration, comprised of a mix of base salary and benefits, along with the flexibility to appropriately reward and incentivise with variable pay and longer term incentives, as described within the Policy. When applying the Policy to Executive Directors, the Committee seeks to comply with the QCA Code so far as it is practical to do so, having regard to the size, nature and business requirements of the Company. Operation of the Policy will largely be compliant with the remuneration elements of the QCA Code, but we are aware that in certain instances we will differ from the QCA Code. These instances reflect differences in US market practice when compared to the UK, and the need to balance our governance obligations against the importance of offering competitive remuneration packages in the markets in which we compete and operate. The terms of reference of the Committee can be found on our website at External advice During the year, the Company engaged Aon Solutions UK Limited (Aon) to support management and the Committee with advice on remuneration matters, in particular peer-group benchmarking of Director and Senior Management remuneration and the grant of long term equity incentives under the 2020 Plan that became effective on the day prior to the listing of our ADSs on Nasdaq. The consultants were appointed by the Committee. The 28 Aon is a leading global professional services firm and the Board confirm no conflicts of interest before each meeting. During Aon. Proposed Application of the Policy for the Year Ending 31 December CEO remuneration With effect from 1 January The target bonus for Mr. Nath for the Long term incentives for Mr Goldsmith serves as Non-Executive Director cash fees Non-Executive Directors are paid a basic fee. In addition to the basic fee, committee fees may be paid for service as Lead Independent Director, chairing or membership of a Board Non-Executive Directors are eligible to receive the following annual fees:
* ** 30 Note: Chair and committee member retainers are in addition to retainers for members of the Board of Directors. In accordance with the Company's Articles of Association, Directors are allocated into one of three classes. Each class of Directors serves a staggered three-year term. At each annual general meeting, the successors of Directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. Directors of the class retiring at the annual general meeting shall be eligible for re-appointment by ordinary resolution at such annual general meeting. Details of
*George Goldsmith and Ekaterina Malievskaia provided notice that they will resign from the Board effective 29 March 2024 The information in this part of the Remuneration Report is not subject to audit. Directors’ Remuneration Policy This remuneration policy will be submitted for approval by shareholders in a binding vote at the AGM scheduled for 9 May 2024. Statement of consideration of shareholder views The Compensation and Leadership Development Committee will consider any shareholder feedback received and ongoing shareholder feedback throughout the year, when reviewing and applying the Policy each year. The guidance from shareholder representative bodies is also considered on an ongoing basis. The Committee submits its Directors’ remuneration report for a non-binding, advisory vote of shareholders at its annual general meeting of shareholders. At the 2023 annual general meeting of shareholders, 98.27% of shareholders voted in favor of the proposal to receive and approve, as a non-binding advisory resolution, the Directors’ Remuneration Report for the year ended 31 December 2022, with 1.73% voting against such proposal. 32 Although non-binding, the Compensation and Leadership Development Committee will review and consider the voting results when making future decisions regarding our Director remuneration program. The attendees of the Compensation and Leadership Development Committee meetings in 2023 were as follows:
*David York Norton attended 4 of 5 meetings due to scheduling conflicts. 33 FORM OF PROXY FOR ORDINARY SHAREHOLDERS | December 31, 2022 ( (1) “Audit Fees” consist of fees billed for the audit of our annual consolidated financial statements and statutory accounts. (2) “Audit-related” fees consist of fees in connection with the review of our interim consolidated financial statements. (3) “Tax Fees” consist of fees billed for tax planning advice in respect of intercompany arrangements and structuring in connection with both our initial public offering (“IPO”) and ongoing operations. (4) “All Other Fees” consist of non-audit fees paid to PwC for advisory services in relation to fundraising and registration statements filed with the SEC. The Audit and Risk Committee has determined that the rendering of non-audit services by PwC is compatible with maintaining the principal accountant’s independence. Pre-Approval Procedures The Audit and Risk Committee pre-approves all audit and permissible non-audit services provided by the independent registered certified public accounting firm unless an exception to such pre-approval exists under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or the rules of the SEC. These services may include audit services, audit-related services, tax services and other services. Our Audit and Risk Committee has pre-approved all services performed by the independent registered public accounting firm since the pre-approval policy was adopted prior to our initial public offering. REQUIRED VOTE The ratification of the selection of PwC as our independent registered public accounting firm requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. This vote is advisory and non-binding. Abstentions and broker non-votes, if any, RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, PROPOSAL Proposal 7 authorizes the Audit and Risk Committee to determine our auditors’ remuneration for the fiscal year ending December 31, The Audit and Risk Committee is directly responsible for the appointment, retention and termination, and for determining the compensation of the Company’s independent registered public accounting firm. The Audit and Risk Committee shall pre-approve all auditing services and the terms thereof and non-audit services (other than non-audit services prohibited under Section 10A(g) of the Exchange Act or the applicable rules of the SEC or the Public Company Accounting Oversight Board (“PCAOB”)), except that pre-approval is not required for the provision of non-audit services if the “de minimis” provisions of Section 10A(i)(1)(B) of the Exchange Act are satisfied. The Audit and Risk Committee may delegate to the chairperson of the Audit and Risk Committee the authority to grant pre-approvals for audit and non-audit services, provided such approvals are presented to the Audit and Risk Committee at its next scheduled meeting. All services provided by PwC during fiscal year REQUIRED VOTE The authorization of the Audit and Risk Committee to determine auditor remuneration requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” the authorization of our Audit and Risk Committee to determine our auditors’ remuneration for the fiscal year ending December 31, PROPOSAL At the Meeting, our Board will present our U.K. statutory annual accounts and reports for the period January 1, REQUIRED VOTE The receipt of the U.K. statutory annual accounts and reports requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” the resolution to receive our U.K. statutory annual accounts and reports. PROPOSAL Our U.K. statutory directors’ remuneration report is set forth as Annex A to this Proxy Statement. The directors’ remuneration report includes the annual report on remuneration. This document describes in detail our remuneration policies and procedures and explains how these policies and procedures help to achieve our compensation objectives with regard to our directors and the retention of high-quality directors. Our Board and our Compensation and Leadership Development Committee believe that the policies and procedures as articulated in the directors’ remuneration report are effective and that as a result of these policies and procedures we have and will continue to have high-quality directors. Our Board has approved and signed the report in accordance with English law. At the Meeting, the shareholders will vote on the annual report on remuneration. This vote is advisory and non-binding. Although non-binding, our Board and Compensation and Leadership Development Committee will review and consider the voting results when making future decisions regarding our director remuneration program. Following the Meeting, and as required under English law, the directors’ annual report on remuneration will be delivered to the U.K. Registrar of Companies. REQUIRED VOTE The approval of our U.K. statutory directors’ annual report on remuneration requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. This vote is advisory and non-binding. Abstentions and broker non-votes, if any, RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” approval of our U.K. statutory directors’ annual report on remuneration set forth in Annex A. PROPOSAL 9—APPROVAL OF OUR U.K. STATUTORY DIRECTORS' REMUNERATION POLICY Our U.K. statutory directors’ remuneration policy is set forth as Annex A to this proxy statement. Our directors’ remuneration policy is used to determine the remuneration for our directors, including our Chief Executive Officer (our sole executive director). The policy has as its key objective the engagement and retention of high-quality directors. The last approved remuneration policy was approved by the shareholders at our 2021 annual general meeting and the new remuneration policy is proposed for approval at this AGM, as required by the U.K. Companies Act 2006. As set forth in Annex A, we submit our new proposed remuneration policy, which our Board of Directors has determined is competitive and consistent with current market practices. The proposed policy is largely similar to our previously approved policy, but includes the following material changes. •The proposed policy sets the maximum annual bonus payable to an Executive Director to 100% of his or her annual base salary and provides that the bonus amount may be paid in cash or shares, at the Compensation and Leadership Development Committee's election. •The proposed policy provides that the maximum pension or retirement contribution, cash supplement (or combination thereof) payable by the Company shall be up to 5% of base salary, or such lesser percentage which is available to the general workforce. •The proposed policy includes compensation recovery provisions, which are designed to comply with the mandatory compensation “clawback” requirements under Nasdaq rules that became effective as of October 2, 2023. Under the policy, in the event of an accounting restatement, we will be required, subject to limited impracticability exceptions, to recover erroneously received incentive‑based compensation from our current or former executive officers representing the excess of the amount actually received over the amount that would have been received had the financial statements been correct in the first instance. 18 Our Board of Directors has approved the directors’ remuneration policy and believes it is effective to achieve its objectives. The directors’ remuneration policy, if approved, will take effect immediately upon conclusion of this Meeting and will remain valid until replaced by a new or amended policy (expected to occur at the 2027 annual general meeting of the Company). Further information about the policy is available at “Director Remuneration” and the policy is set forth as of Annex A to this proxy statement. REQUIRED VOTE The approval of our U.K. statutory directors’ remuneration policy requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, are not counted in the calculation of votes for or against this proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” approval of our U.K. statutory directors’ remuneration policy set forth in Annex A. 19 PROPOSAL 10—ADVISORY (NON-BINDING) VOTE TO APPROVE THE COMPANY’S EXECUTIVE COMPENSATION Section 14A of the Exchange Act requires that we provide our shareholders with the opportunity to vote to approve, on a non-binding, advisory basis, not less frequently than once every three years, the compensation of our named executive officers. Based on the voting results of the vote on the frequency of future votes on executive compensation at our 2022 Our compensation programs are designed to effectively align our executives’ interests with the interests of our shareholders by focusing on long-term equity incentives that correlate with the growth of sustainable long-term value for our shareholders. Shareholders are urged to read the section titled “Executive Compensation” in this Proxy Statement, which discusses our executive compensation policies and practices and contains tabular information and narrative discussion about the compensation of our named executive officers for the year ended December 31, The vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the compensation of our named executive officers, as described in this Proxy Statement in accordance with the compensation disclosure rules of the SEC. Accordingly, we are asking our shareholders to vote on the following resolution at the Meeting: RESOLVED, that the shareholders hereby approve, on a non-binding advisory basis, the compensation paid to the Company’s named executive officers, as disclosed in the Company’s Proxy Statement for the REQUIRED VOTE The approval of this advisory non-binding proposal requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, The vote is advisory, which means that the vote is not binding on the Company, our Board or our Compensation and Leadership Development Committee. To the extent there is any significant vote against our named executive officer compensation as disclosed in this Proxy Statement, our Compensation and Leadership Development Committee will evaluate whether any actions are necessary to address the concerns of shareholders. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” the approval, on a non-binding advisory basis, of the compensation of our named executive officers, as disclosed in this Proxy Statement. PROPOSAL 11—AUTHORIZATION OF ALLOTMENT OF SHARES Under the U.K. Companies Act 2006, our Board of Directors cannot allot shares in the Company unless they are authorized to do so by our shareholders at a general meeting. The Directors currently have an existing authority to allot shares in the Company and to grant rights to subscribe for or convert securities into shares in the Company. This authority was granted to the Directors prior to our initial public offering in September 2020 and was in respect of a maximum aggregate nominal amount of up to £536,000 (the "Existing Authority"). The Existing Authority remains unexercised in respect of approximately 43% of the Company’s issued ordinary share capital; however 37% is allotted and reserved for future issuances under outstanding warrants and under 20 outstanding equity awards and in connection with future awards under our equity compensation plans . This Proposal 12 is an ordinary resolution to seek a new authority, in addition to such subsisting amounts under the Existing Authority. Proposal 12 proposes that the Board of Directors are granted authority to allot new shares or to grant rights to subscribe for or to convert any security into shares in the Company up to a maximum aggregate nominal amount of £820,100, which represents approximately 150% of the Company's issued ordinary share capital. If approved by shareholders, this authority will expire on May 8, 2029. If shareholders do not approve Proposal 12, the subsisting amounts under the Existing Authority granted at the time of the Company's initial public offering will continue to apply until September 10, 2025 or until such earlier time as it has been fully utilized. However, such existing authorization is only sufficient to cover future issuances under outstanding warrants, under outstanding equity awards and future equity awards under our equity compensation plans. Absent a further shareholder authorization, we do not have sufficient shares to raise capital to fund the development of the Company’s business and to increase the shares reserved for issuance under the Company’s equity compensation plans in accordance with such plans' "evergreen provisions". The grant of this authority will not exempt the Company from applicable Nasdaq requirements to obtain shareholder approval prior to certain share issuances or to comply with applicable SEC disclosure requirements and other rules and regulations. Our Board of Directors will continue to focus on and satisfy its fiduciary duties to our shareholders with respect to share issuances. If shareholders do not approve this Proposal No. 12, the Existing Authority to allot and issue shares up to the amount of our authorized but unissued share capital will continue to apply until September 10, 2025. However, our Board would generally not be able to issue any shares after September 10, 2025 (other than pursuant to any pre-existing contractual obligations, including upon exercise of outstanding warrants) without first seeking and obtaining shareholder approval for each such issuance. This limitation on our ability to issue shares would disadvantage us vis-à-vis many of our late-stage clinical biotechnology peers (many of which are incorporated in the United States) in competing for capital. Like other late-stage clinical biotechnology companies, we intend to seek additional fundraisings when necessary to implement our operating plan. Failure to raise additional capital may inhibit us from being able to file for regulatory approval and commercialize COMP360 and could delay research and development of our investigational COMP360 psilocybin treatment, research and discovery efforts for prodrug candidates and new compounds and the achievement of other strategic goals. In light of our size and status of being a pre-revenue-generating company, the Board believes that equity financings are an appropriate method to support any potential future funding requirements. The Board believes that, in the event of an equity financing, having authorization to allot, or grant rights to subscribe for or convert securities into, our shares without needing to seek approval from shareholders at the time should allow Compass to raise funds more efficiently, with more Company favorable terms and in a timely fashion. REQUIRED VOTE The approval of this proposal to authorize allotment of shares requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, are not counted in the calculation of votes for or against this proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” this proposal to authorize allotment of shares. PROPOSAL 12—DISAPPLICATION OF PRE-EMPTION RIGHTS As a UK incorporated company, the Company’s shareholders are entitled, under the U.K. Companies Act 2006, to pre-emption rights, whereby, in the event that the Company wishes to allot new equity securities for cash, those securities must first be offered to existing shareholders in proportion to the number of ordinary shares they each hold before they can be offered to new shareholders unless the shareholders have sanctioned the disapplication of their statutory rights of pre-emption in respect of such allotment or grant of rights. 21 In practice, the operation of such pre-emption rights is onerous and can result in significant delay and additional expense to the cost of an equity fundraising. It is therefore customary for our Board of Directors to seek authority from our shareholders to dis-apply statutory pre-emption rights for cash issues of up to a limit approved by the Company’s shareholders. With the Company solely listed on Nasdaq, and the Company’s peers, key shareholders and primary target market being in the United States, the Board of Directors is mindful of the fact that equivalent United States incorporated companies are not required to offer shares to existing shareholders on a pre-emptive basis in the event they are pursuing an equity fundraising. The Board considers that its requirement to offer shares to existing shareholders on a pre-emptive basis may place the Company at a disadvantage in competing for capital. Therefore, Proposal 13 seeks a disapplication of pre-emption rights for cash issues of up to a certain proportion of the Company’s issued ordinary share capital. Our Board of Directors currently has a power to allot shares as if the rights of pre-emption applicable under the U.K. Companies Act 2006 did not apply for cash issues. This power was granted to the Directors pursuant to shareholder resolutions passed on September 11, 2020 and was in respect of a maximum aggregate nominal amount of £536,000. It remains unexercised in respect of approximately 43% of the Company’s issued ordinary share capital; however 37% is allotted and reserved for future issuances under outstanding warrants, under outstanding equity awards and in connection with future awards under our equity compensation plans. Our Board of Directors have decided to seek a new disapplication of pre-emption rights for cash issues to replace the existing power. This Proposal will, if passed, give the Directors power, pursuant to the authority to allot granted by Proposal 12, to allot shares for cash or to grant rights to subscribe for or to convert any security into shares without first offering them to existing shareholders in proportion to their existing holdings up to an aggregate maximum nominal amount of £820,100, which represents approximately 150% of the Company’s issued share capital as of March 27, 2024. This Proposal will be required to be passed as a special resolution and, if passed, this power will expire on May 8, 2029. If shareholders do not approve Proposal 12 or this Proposal 13, the subsisting amounts under the existing authorization granted prior to the Company's initial public offering in September 2020 will continue to apply until September 10, 2025 (other than pursuant to any pre-existing contractual obligations, including upon exercise of outstanding warrants) or until such earlier time as it has been fully utilized. However, such existing authorization is only sufficient to cover future issuances under outstanding warrants, under outstanding equity awards and future equity awards under our equity compensation plans. Absent securing further shareholder authorization to allot new equity securities and disapply pre-emption rights for cash issues, we do not have sufficient shares to raise capital to fund the development of the Company’s business through completion of our phase 3 clinical program for our investigational COMP360 psilocybin treatment and to increase the shares reserved for issuance under the Company’s equity compensation plans in accordance with such plans' "evergreen provisions". Our Board of Directors considers that, as a late-stage clinical biotechnology company, the ability to raise new equity funds at relatively short notice and at low cost is vital to the continuing financial health of the business and our ability to continue our research and development activities. We believe that it is in the best interests of the Company and our shareholders for the Board of Directors to seek to retain the ability to raise new equity funds efficiently on the best terms available and in a timely fashion. REQUIRED VOTE The approval of the disapplication of pre-emption rights is a special resolution and requires the affirmative vote of not less than 75% of the votes cast by shareholders present (in person or by proxy) at the Meeting and entitled to vote. On a poll, a special resolution is passed if it is approved by holders representing not less than 75% of the total voting rights of shareholders present (in person or by proxy) who (being entitled to vote) vote on the resolution.. This vote is advisory and non-binding. Abstentions and broker non-votes, if any, are not counted in the calculation of votes for or against the proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board unanimously recommends that the shareholders vote “FOR” the disapplication of pre-emption rights. 22 BOARD OF DIRECTORS AND CORPORATE GOVERNANCE BOARD OF DIRECTORS Below is a list of our directors and their positions and ages as of
During the year ended December 31, The biographical information for Below is biographical information for those directors who are not standing for re-election at this Meeting and who will remain seated following the Meeting. Kabir Nath has served as our Chief Executive Officer and a member of our Board since August 2022. Previously from March 2016 until July 2022, Mr. Nath held positions of increasing responsibility and leadership at Otsuka Holdings Co., Ltd., a leading global healthcare group listed on the Tokyo Stock Exchange (JP 4578). Most recently, from March 2020 until July 2022, Mr. Nath served as senior managing director of global pharmaceuticals at Otsuka. From March 2016 until April 2022, Mr. Nath served as president and chief executive officer of Otsuka’s North America Pharmaceutical Business. Prior to Otsuka, from 2003 until December 2015, Mr. Nath held positions of increasing responsibility and leadership at Bristol-Myers Squibb Company (NYSE: BMS). Mr. Nath holds an M.A. from King’s College, University of Cambridge, and an M.B.A. from INSEAD. We believe that Mr. Nath is qualified to serve on our Board because of his extensive experience in the pharmaceutical and biotechnology sector and his commercial and senior leadership experience. 23 Annalisa Jenkins, MBBS, FRCP, has served as a member of our Board since May 2018. Thomas Lönngren has served as a member of our Board since May 2018. Mr. Lönngren currently serves as the Director at PharmaExec Consulting AB and as a Strategic Advisor at the NDA Group, which he has done since 2010. He is non-executive board member and chairman at Egetis Therapeutics AB, believe that Mr. Lönngren is qualified to serve on our Board because of his experience, qualifications, attributes and skills, including his extensive pharmaceutical consulting experience. Linda McGoldrick, Ph.D, has served as a director of our company since September 2020. In 1985, Dr. McGoldrick founded, and currently serves as Chair and Chief Executive Officer of, Financial Health Associates International, a strategic consulting company specializing in healthcare and life sciences. From April 2019 through December 2019, Dr. McGoldrick served as President and interim Chief Executive Officer of Zillion, Inc., 24 Sciences Industry Practices at Marsh-MMC Companies, international operations and marketing director of Veos plc, a European medical devices company, and managing director Europe for Kaiser Permanente International. In 2018, Dr. McGoldrick was appointed by the Governor of Massachusetts to serve on the state’s Health Information Technology Commission. Dr. McGoldrick currently serves on the board of Alvotech (Nasdaq: ALVO) and a number of privately-held life sciences companies. Dr. McGoldrick has served as a director of numerous publicly traded and private held companies and non-profit organizations in the United States, United Kingdom and Europe and currently serves on the faculty of the National Association of Corporate Directors. Dr. McGoldrick previously served on the board of directors of Avadim Health, Inc. Dr. McGoldrick received her bachelor of arts in sociology from Ohio Wesleyan University and master of social work in healthcare from the University of Pennsylvania, master of business administration in management and finance from the Wharton School, University of Pennsylvania and a Ph.D. in global health from Worcester Polytechnic Institute. We believe that Dr. McGoldrick is qualified to serve on our Board because of her extensive experience as a public company director, chief executive officer of various global organizations and corporations, global business strategy leader and policy expert for U.S. and European companies and organizations. Robert McQuade, Ph.D. has served as a member of our Board since CORPORATE GOVERNANCE Structure of our Board of Directors Our Articles of Association and Corporate Governance Guidelines gives our Board the flexibility to determine the appropriate leadership structure for the Board, including whether the offices of Chief Executive Officer and Chair of the Board should be separate or combined and why the Board’ leadership structure is appropriate given the specific characteristics or circumstances of our Our Board is currently chaired by our co-founder and a significant shareholder, George Goldsmith. Independence of our Board of Directors Our Board has determined that all of our current directors, other than George Goldsmith, our co-founder and Board Chair, Kabir Nath, our Chief Executive Officer, and Ekaterina Malievskaia, our co-founder and former Chief Innovation Officer, qualify as “independent” directors in accordance with the independence requirements under the applicable Nasdaq rules as well as applicable rules promulgated by the SEC. Mr. Nath is not considered independent 25 because he is an executive officer and employee of the Company. Mr. Goldsmith and Dr. Malievskaia are not considered independent because Our Board has made a subjective determination as to each independent director that no relationships exist that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, our Board reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and our management. Mr. Goldsmith is married to Dr. Malievskaia. There are no other family relationships among any of our directors or executive officers. Our independent directors meet in regularly scheduled executive sessions at which only independent directors are present. The Audit and Risk Committee, the Compensation and Leadership Development Committee and the Nominating and Corporate Governance Committee are each comprised entirely of directors determined by the Board to be independent. Board Oversight of Risk Management and ESG Matters Our management is primarily responsible for assessing and managing risk and one of the key functions of the Board is informed oversight of our risk management process. In carrying out its risk oversight responsibilities, the Board reviews the long and short-term operational and external risks facing the Company through its participation in long-range strategic planning, and ongoing reports from various Board standing committees that address risks inherent in their respective areas of oversight. On an ongoing basis, the Board and management identify key long and short-term risks, assess their potential impact and likelihood, and, where appropriate, implement operational measures and controls or purchase insurance coverage in order to help ensure adequate risk mitigation. The Board is supported by its committees in fulfillment of its risk oversight responsibilities. For example, our Audit and Risk Committee focuses on our overall financial risk by evaluating our internal controls and disclosure policies as well as ensuring the integrity of our financial statements and periodic reports. The Audit and Risk Committee also monitors compliance with legal and regulatory Most of the Environmental, Social, and Governance (“ESG”) matters prioritized as part of our ESG framework are embedded in the Company’s strategic and operational plans, and are therefore overseen by the Board as part of regular updates and discussions that the Board receives and holds on these plans. The Board also specifically discusses our ESG framework at least once a year. Furthermore, Board oversight of specific ESG matters occurs through the committees of the Board: our Nominating and Corporate Governance Committee oversees our corporate governance guidelines; our Audit and Risk Committee oversees our risk and compliance framework, our code of conduct and ethics, as well as data privacy and security matters; and our Compensation and Leadership Development Committee oversees talent and employee-related matters, and human capital management strategies, including our employee well-being program and equity, diversity and inclusion initiatives. Board Evaluation Process Our Board is committed to assessing its own performance as a board in order to identify its strengths as well as areas in which it may improve its performance. The board evaluation process, which is overseen by the Nominating and Corporate Governance Committee, involves the completion of annual written questionnaires by the directors and interviews with members of the Board and, where appropriate from time to time, may include interviews with key members of management and key advisors to the Board. The results of the board evaluation process are reviewed and discussed, including considerations of action plans to address any issues, by both the Nominating and Corporate Governance Committee and our Board. Committees of Our Board of Directors Our Board has three standing committees: the Audit and Risk Committee, the Compensation and Leadership Development Committee, and the Nominating and Corporate Governance Committee. We also have an Innovation 26 and Research Committee, which meets on an ad hoc, as needed basis and does not yet have a charter in place that governs its purpose and duties. The Innovation and Research Committee meets to oversee the development and progress of programs to research and develop drug and technology assets that aid our mission to accelerate patient access to evidence-based innovation in mental health. The charters for our Audit and Risk Committee, Compensation and Leadership Development Committee and Nominating and Corporate Governance Committee can be found on the “Corporate Governance–Documents and Charters” section of our investor relations website at ir.compasspathways.com. Each such committee reviews these charters at least annually.
Audit and Risk Committee Our Audit and Risk Committee currently consists of Annalisa Jenkins, Daphne Karydas, Linda McGoldrick and Robert McQuade and assists our Board in overseeing our accounting and financial reporting processes. Ms. Our Audit and Risk Committee’s responsibilities include: •appointing, approving the compensation of, and assessing the performance and independence of our independent registered public accounting firm; •approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm; •reviewing the audit plan with the independent registered public accounting firm and members of management responsible for preparing our financial statements and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures as well as critical accounting policies and practices used by us; •discussing with the independent registered public accounting firm its independence and obtaining required written communications required by the PCAOB; •exercising general oversight over our information security and technology risks, including our cybersecurity and information security and related risk management programs; and 27 •monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements and reviewing all related party transactions for potential conflict of interest situations and approving all such transactions. Compensation and Leadership Development Committee Our Compensation and Leadership Development Committee currently consists of Annalisa Jenkins, David Norton and Wayne Riley. Dr. Jenkins serves as chair of our Compensation and Leadership Development Committee. Under SEC and Nasdaq rules, there are heightened independence standards for members of our Compensation and Leadership Development Committee, including a prohibition against the receipt of any compensation from us other than standard board member fees. Each member of our Compensation and Leadership Development Committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act. Our Board has determined that each member of our Compensation and Leadership Development Committee is “independent” as defined under the applicable Nasdaq rules. Our Compensation and Leadership Development Committee held Our Compensation and Leadership Development Committee’s responsibilities include: •reviewing policies relevant to the consideration and determination of compensation of our directors and executive officers; •overseeing and administering our employee equity incentive plans in operation from time to time, including reviewing and approving grants and awards; •reviewing and approving certain corporate goals and objectives relating to the compensation of our chief executive officer, evaluating the performance of our chief executive officer in light of such corporate goals and objectives, and recommending the compensation of our chief executive officer to the Board based on such evaluation; •reviewing and recommending to our Board the compensation of our other executive officers and our directors; •overseeing our strategies, programs and initiatives related to equity, diversity and inclusion, gender pay parity and creating a positive working environment; •reviewing and overseeing our human capital management strategies, policies and practices, including employee health, safety and well-being, workforce belong, inclusion and diversity efforts and overall employee engagement and retention; and •reviewing and approving the retention of consulting firm or outside advisor to assist in the evaluation of compensation matters. The Compensation and Leadership Development Committee has the authority to delegate certain responsibilities to one or more subcommittees consisting of one or more of its members, but has not delegated such authority to a subcommittee. Our Board has delegated to the Compensation and Leadership Development Committee the authority to approve any proposed compensation for our executive officers other than the Chief Executive Officer whose compensation is recommended to the Board for approval based on the Compensation and Leadership Development Committee’s evaluation of his performance in relation to our goals and objectives. Non-executive director compensation is recommended by our Compensation and Leadership Development Committee to the Board for approval. Our Chief Executive Officer may participate in general discussions with our Compensation and Leadership Development Committee and Board about these compensation matters, but he does not participate in discussions during which his individual compensation is being considered and approved. In Nominating and Corporate Governance Committee 28 Our Nominating and Corporate Governance Committee currently consists of Thomas Lönngren, Linda McGoldrick and Wayne Riley. Mr. Lönngren serves as chair of our Nominating and Corporate Governance committee. Our Board has determined that each member of our Nominating and Corporate Governance Committee is “independent” as defined under the applicable Nasdaq rules. Our Nominating and Corporate Governance Committee held Our Nominating and Corporate Governance committee’s responsibilities include: •developing and recommending to the Board criteria for board and committee membership; •establishing procedures for identifying and evaluating board of director candidates, including nominees recommended by shareholders, including procedures by which shareholders may recommend director candidates; •identifying individuals qualified to become members of the Board; •evaluating the suitability of individual prospective director candidates, including considering the benefits of diversity, including diversity of thought, educational and professional background, gender, race, age, sexual orientation or ethnic and national background; •recommending to our Board the persons to be nominated for election as directors and to each of our Board’s committees; •developing and recommending to our Board a set of corporate governance guidelines, and regularly reviewing policies and guidelines adopted by the Board or its committees; and •overseeing the evaluation of our Board and its committees. Our Board is responsible for filling vacancies on our Board and for nominating candidates for election by our shareholders each year in the class of directors whose term expires at the relevant annual general meeting. The Board delegates the selection and nomination process to the Nominating and Corporate Governance Committee, with the expectation that other members of the Board, and of management, will be requested to take part in the process as appropriate. The Nominating and Corporate Governance Committee considers candidates for Board of Director membership by soliciting recommendations from any of the following sources: independent directors, the Chief Executive Officer, other executive officers, third-party search firms, or any other source it deems appropriate. Additionally, the Nominating and Corporate Governance Committee will review and evaluate the qualifications of any such proposed candidate, and conduct inquiries it deems appropriate. Any shareholder who wishes to recommend a candidate for consideration by the committee as a nominee for director should follow the procedures described later in this Proxy Statement under the heading “Additional Information—Shareholder Proposals.” Director Nomination Process The process followed by our Nominating and Corporate Governance Committee to identify and evaluate director candidates includes requests to board members and others for recommendations, including through the use of search firms or other advisors, meetings from time to time to evaluate biographical information and background material relating to potential candidates, and interviews of selected candidates by management, recruiters, members of the committee and our Board. Once candidates have been identified, the Nominating and Corporate Governance Committee confirms that the candidates meet all of the minimum qualifications and other criteria for director nominees approved by the Board and all facts and circumstances that it deems appropriate or advisable. The Nominating and Corporate Governance Committee may gather information about the candidates that relate to their skills, their depth and breadth of business experience or other background characteristics, their independence, the needs of the Board and any other item of information that the Nominating and Corporate Governance Committee deems to be appropriate in the evaluation process. The Nominating and Corporate Governance Committee then meets as a group to discuss and evaluate the qualities and skills of each candidate, both on an individual basis and taking into account the overall composition and needs of our Board. Based on the results of the evaluation process, the Nominating and Corporate Governance Committee recommends candidates for the Board’s approval to fill a vacancy or as director nominees for election to the Board by our shareholders each year in the class of directors whose term expires at the relevant annual general meeting. 29 The qualifications, qualities and skills that our Nominating and Corporate Governance Committee believes must be met by a nominee for a position on our Board are as follows: •The nominee shall have experience at a strategic or policymaking level in a business, government, non-profit or academic organization of high standing. •The nominee shall be accomplished in his or her respective field, with superior credentials and recognition. •The nominee shall be well regarded in the community and shall have a long-term reputation for the high ethical and moral standards. •The nominee shall have sufficient time and availability to devote to the affairs of the Company, particularly in light of the number of boards of directors on which such nominee may serve. •To the extent such nominee serves or has previously served on other boards, the nominee shall have a demonstrated history of actively contributing at board meetings. While we have no formal policy regarding board diversity, our Corporate Governance Guidelines and Nominating and Corporate Governance Committee charter provide that when evaluating proposed director candidates, the Nominating and Corporate Governance Committee (or any search firm acting under the direction of the Nominating and Corporate Governance Committee) shall consider the benefits of diversity, including diversity of thought, educational and professional background, gender, race, age, sexual orientation or ethnic and national background. Our priority in selection of board members is identification of members who will further the interests of our shareholders through consideration of a number of facts and circumstances, including among other things, the skills of the prospective director candidate, his or her depth and breadth of business experience or other background characteristics, his or her independence and the needs of the Board. The table below provides certain highlights of the composition of our Board members and nominees as of
In addition, one director has identified as a military veteran. Shareholder Recommendations and Nominees Our Nominating and Corporate Governance Committee considers both recommendations and nominations for candidates to the Board from shareholders so long as such recommendations and nominations comply with our Articles of Association, Nominating and Corporate Governance 30 Nominating and Corporate Governance Committee by writing to our Company Secretary at the address below not less than 120 days prior to the date on which the Company’s proxy statement is released to shareholders in connection with the previous year’s annual meeting. Shareholder recommendations for director candidates must include the nominee’s name and address of record, a representation that the shareholder is a holder of the Company’s securities, as well as the nominee’s detailed biographical data and qualifications for board membership, information regarding any arrangements or understandings between the shareholder and the recommended candidate, the consent of the proposed nominee to be named in the proxy statement and serve as a director if elected and any other information regarding the nominee that is required to be included in a proxy statement. Following verification of the shareholder status of the person submitting the recommendation, all properly submitted recommendations will be promptly brought to the attention of the Nominating and Corporate Governance Committee. Shareholders who desire to nominate persons directly for election to the Board at an annual general meeting of shareholders must meet the deadlines and other requirements set forth under “Additional Information —Shareholder Proposals.” Any vacancies on the Board occurring between our annual general meetings of shareholders may be filled by persons selected by a majority of the directors then in office, in which case any director so elected will serve until the next annual general meeting of shareholders when such director will offer himself/herself for re-election, or by persons elected by an ordinary resolution of the shareholders of the Company. You may write to the Nominating and Corporate Governance Committee at: c/o Ben Harber Company Secretary COMPASS Pathways plc 3rd Floor 1 Ashley Road, Altrincham Cheshire WA14 2DT United Kingdom Code of Business Conduct and Ethics We have adopted a Code of Business Conduct and Ethics applicable to all of our directors, officers, employees and certain designated agents. The Code of Business Conduct and Ethics is available on the “Corporate Governance –Documents and Charters” section of our investor relations website at ir.compasspathways.com. We expect that any amendments to this code or any waivers of its requirements will be disclosed on our website. Shareholder Communication with the Board of Directors Our Board has implemented a process by which our shareholders or any interested parties may communicate with our Board as a whole or with individual members of our Board. Communications directed to our Board as a whole should be addressed to COMPASS Pathways plc 3rd Floor, 1 Ashley Road, Altrincham Cheshire WA14 2DT, United Kingdom Attn: Chair of the Board, and communications directed to individual directors, including our Lead Independent Director, should be addressed to the attention of the individual director at the same address. Such communications may be made on an anonymous or confidential basis. All such communications received by the Company shall be delivered initially to the Company’s General Counsel, who shall review and maintain a log of all such communications. Directors may at any time review this log and request copies of any shareholder communication. Communications received will be promptly forwarded to the specified addressees thereof at the Company’s discretion. In general, communications relating to board and chief executive officer succession planning, corporate governance matters, executive compensation matters, general board oversight matters and long-term corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances, and matters as to which we tend to receive repetitive or duplicative communications. Any interested party with concerns about our company may report such concerns to the Board or the chairman of our Board and Nominating and Corporate Governance Committee by following the procedures described above. A copy of any such written communication may also be forwarded to our legal counsel and a copy of such communication may be retained for a reasonable period of time. The director may discuss the matter with our legal counsel, with independent advisors, with non-management directors, or with our management, or may take other action or no action as the director determines in good faith, using reasonable judgment, and applying his or her own discretion. Communications may be forwarded to other directors if they relate to important substantive matters and include suggestions or comments that may be important for other directors to know. 31 The Audit and Risk Committee oversees the procedures for the receipt, retention, and treatment of complaints received by us regarding accounting, internal accounting controls or audit matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting, internal accounting controls or auditing matters. Any shareholder communications that include concerns or complaints regarding accounting, internal controls or auditing matters or potential violations of the federal securities laws or the Foreign Corrupt Practices Act will be handled in accordance with procedures adopted by the Audit and Risk Committee. We have also established a toll-free telephone number for the reporting of such activity, which is +1 877 306 1965 or +44 (0) 800 032 5911. DIRECTOR COMPENSATION Under our Directors’ Remuneration Policy for Non-Executive Directors (“Director Compensation Policy”), the Board has the discretion to pay cash and equity fees to our non-executive directors for their Board and committee service. Our compensation arrangements for non-executive directors during Our Director Compensation Policy In addition to cash compensation, each non-executive director is eligible to receive share options under our equity incentive plans. We have historically awarded share options to certain non-executive directors in an amount determined at the discretion of the Board or Compensation and Leadership Development Committee. The value of all equity awards and cash compensation to any non-executive director in any calendar year for services as a non-executive director shall not exceed £750,000. We do not have a formal share ownership guideline policy for non-executive directors. During 2023, our Director Compensation Policy provided that each new non-executive director elected to our Board was granted an initial one-time equity award of options to purchase 52,000 of our ADS on the date of such director’s initial election or appointment to the Board and each continuing non-executive director will The table below shows the compensation paid to our non-executive directors during the year ended December 31, 33
(1) The amount reported represents the aggregate grant date fair value of share options awarded to our non-employee directors during the (2) At December 31, (3) (5) Dr. Malievskaia earned $24,827 in board fees under the Director Compensation Policy for the portion of the year during which she served as a non-executive director. Such compensation amounts are reported under the heading “Named Executive Officer Compensation—Summary Compensation Table” below. EXECUTIVE OFFICERS OF THE COMPANY Below is a list of our executive officers and their positions and ages as of the date of
For biographical information regarding Mr. Nath, Guy Goodwin has served as our Chief Medical Officer since August 2021. Dr. Goodwin currently serves as Emeritus Professor of Psychiatry at The University of Oxford, where he has been a professor of psychiatry since October 1996. Additionally, Dr. Goodwin served as Medical Director at P1vital, where he worked between April 2018 and July 2021. Dr. Goodwin previously served as WA Handley Chair of Psychiatry and Head of the University of Oxford’s Department of Psychiatry. Dr. Goodwin is a Fellow of the Academy of Medical Sciences, the American College of Neuropsychopharmacology, and former President of the British Association for Psychopharmacology and of the European College of Neuropsychopharmacology. Dr. Goodwin received his BA, DPhil, BM, and BCh from the University of Oxford. Teri Loxam has served as our Chief Financial Officer since March 2024 and worked with us on a consulting basis from December 2023 to March 2024. Prior to joining the Company, Ms. Loxam served as Chief Financial Officer of Gameto, Inc., a privately held, clinical-stage biotechnology company from April 2023 until October 2023. Previously, Ms. Loxam served as Chief Financial Officer and Chief Operating Officer of Kira Pharmaceuticals, a privately held, clinical-stage biotechnology company, from November 2021 to April 2023 and as Chief Financial Officer of SQZ Biotechnologies (OTC: SQZB), from August 2019 to November 2021. From August 2015 to August 2019, Ms. Loxam served in various roles at Merck & Co., Inc. (NYSE: MRK), including serving as Senior Vice President of Investor Relations and Global Communications. Before that, from July 2012 to August 2015, Ms. Loxam served as Vice President of Investor Relations at IMAX Corporation (NYSE: IMAX). From June 2001 to July 2012, Ms. Loxam had a number of roles of increasing responsibility across Strategy, Treasury and Investor Relations at Bristol-Myers Squibb (NYSE: BMY). Ms. Loxam currently serves on the boards of directors and as audit committee chairperson at Cardiol Therapeutics Inc. (Nasdaq: CRDL) (TSX: CRDL) where she has served since May 2022 and Vaxcyte, Inc. (Nasdaq: PCVX) where she has served since September 2021. Ms. Loxam holds an M.B.A. from the University of California, Irvine, Paul Merage School of Business, and a B.Sc. from the University of Victoria. Matthew Owens has served as our General Counsel and Chief Legal Officer since February 2022. Prior to joining the Company, Mr. Owens served as Global Head Legal, Digital at Novartis International AG, beginning in January 2018. He has served in various positions with Novartis since 2010, also serving as Senior Legal Counsel, and as Head Legal, Strategic Partnerships and Digital. Prior to Novartis, he was Senior Counsel at Solvay Pharmaceuticals, and Corporate Counsel at Mettler-Toledo. He holds a Bachelor of Arts (Pre-Law & Political Science, History & Criminology) from Capital University, Columbus, Ohio, and a Juris Doctorate from Capital University Law School where he was a Presidential Scholar. He previously was a lecturer at the University of Zurich Law School’s Europa Institute. EXECUTIVE COMPENSATION This Executive Compensation section describes our executive compensation program and the Our named executive officers for •Kabir Nath, our Chief Executive Officer and a Director; • •Matthew Owens, our Chief Legal Officer and General •Michael Falvey, our former Chief Financial Officer; and •Ekaterina Malievskaia, our co-founder and former Chief Innovation Officer. This Executive Compensation section describes the material elements of our executive compensation program during EXECUTIVE SUMMARY Business Overview We are a Corporate Performance Highlights We have made substantial progress during • • • Manage our cash runway and ensure value for shareholders • issued warrants, which are exercisable at the election of the holder between February 2024 and February 2027 and if all warrants are exercised for cash would result in an additional approximately $160 million in gross proceeds • • Grow pipeline beyond COMP360 in TRD •Completed enrollment of our open-label phase 2 study evaluating safety and tolerability of COMP360 in 22 patients with PTSD study and announced initial safety findings from this study at 24 hours •Continued to progress our phase 2 study in anorexia nervosa •Advanced non-oral psilocin prodrug program and ongoing research on prodrug development, which has led to a number of potential candidate leads being identified that we plan to continue through further Maintain our unique culture while maturing our organizational processes • • •Enhanced our risk management reporting, compliance maturity and quality processes OVERVIEW OF EXECUTIVE COMPENSATION PROGRAM Executive Compensation Philosophy Our executive compensation program is guided by our overarching philosophy of paying for performance. Consistent with this philosophy, we have designed our executive compensation program with the following principles in mind:
Executive Compensation Program Design Our executive compensation program is designed to be reasonable and competitive, and balance our goal of attracting, motivating, rewarding and retaining top-performing senior executives with our goal of aligning their interests with those of our shareholders. The Compensation and Leadership Development Committee annually evaluates our executive compensation program to ensure that it is consistent with our short-term and long-term goals and market competitive practices. Our executive compensation program consists of a mix of compensation elements that balance achievement of our short-term goals with our long-term performance. We provide short-term incentive compensation opportunities in 37 the form of annual cash bonuses, which focus on our achievement of annual goals. We also provide long-term incentive compensation opportunities in the form of equity awards. We provide a combination of share options with an exercise price equal to fair market value, or "market-priced" options, and full-value awards (in the form of restricted share units for U.S. taxpayers and options with an exercise price equal to the nominal value of a share, or nominal cost options, for non-U.S. taxpayers) and which focus executive attention on our long-term performance. We believe that market-priced Our executive compensation program is also designed to incorporate sound practices for compensation governance. Below we summarize such practices. What We Do:
What We Don’t Do:
“Say-on-Pay” Vote on Executive Compensation 38 Annually, at our general meeting of shareholders, we hold a non-binding advisory vote regarding the compensation of our named executive officers, which we refer to as say-on-pay. The Compensation and Leadership Development Committee has considered and will continue to consider the outcome of such say-on-pay votes, including the percentage of votes cast in favor and against the say-on-pay proposal, when making future compensation decisions for our named executive officers. The Compensation and Leadership Development Committee also relies on advice from its compensation consultants, its evaluation of Company performance against pre-defined corporate goals, its understanding of the challenges facing the Company and its observations of executive officer performance to determine executive officer compensation. At our Among other things, our Our new remuneration policy is proposed for approval at this Meeting and will remain valid until replaced by a new or amended policy (expected to occur at the 2027 annual general meeting of the Company).Our new proposed remuneration policy, which our Board of Directors has determined is competitive and consistent with current market practices. The proposed policy is largely similar to our previously approved policy, but includes the following material changes. •The proposed policy sets the maximum annual bonus payable to an Executive Director to 100% of his or her annual base salary and provides that the bonus amount may be paid in cash or shares, at the Compensation and Leadership Development Committee's election. •The proposed policy provides that the maximum pension or retirement contribution, cash supplement (or combination thereof) payable by the Company shall be up to 5% of base salary, or such lesser percentage which is available to the general workforce. •The proposed policy includes compensation recovery provisions, which are designed to comply with the mandatory compensation “clawback” requirements under Nasdaq rules that became effective as of October 2, 2023. Under the policy, in the event of an accounting restatement, we will be required to recover erroneously received incentive‑based compensation from our current and former executive officers representing the excess of the amount actually received over the amount that would have been received had the financial statements been correct in the first instance. Governance of Executive Compensation Program Role of the Compensation and Leadership Development Committee and the Board of Directors 39 Our Compensation and Leadership Development Committee, which is comprised entirely of independent directors, is responsible for discharging our Board’s responsibilities relating to compensation of our directors and executives, overseeing our overall compensation structure, policies and programs, and reviewing our processes and procedures for the consideration and determination of director and executive compensation. The Compensation and Leadership Development Committee’s approach to remuneration matters is to enable the Company to attract and retain talent, incentivize long-term value generation, and effectively manage the Company’s cash resources. It is the belief of the Compensation and Leadership Development Committee that this is best achieved through a greater emphasis on variable rather than fixed remuneration, comprised of a mix of base salary and benefits, along with the flexibility to appropriately reward and incentivize with variable pay and long-term incentives. Our Compensation and Leadership Development Committee has the authority to retain, at our expense, one or more third-party compensation consultants to assist the Compensation and Leadership Development Committee in performing its responsibilities. At the beginning of the year, the Compensation and Leadership Development Committee reviews and recommends, in the case of Compensation-Setting Factors When reviewing and approving the amount of each compensation element and the target total compensation opportunity for our executive officers, the Compensation and Leadership Development Committee considers the following factors: the Company’s performance during the year, based on business and corporate goals and priorities established by the Chief Executive Officer and the Board of Directors; each executive officer’s skills, experience and qualifications relative to other similarly-situated executives at the companies in our compensation peer group; the scope of each executive officer’s role compared to other similarly-situated executives at the companies in our compensation peer group; the performance of each individual executive officer, based on an assessment of their contributions to our overall performance, ability to lead their department and work as part of a team, all of which reflect our values; compensation parity among our executive officers; the dilutive impact of equity awards; our retention goals; general economic and market conditions and rate of inflation; changes in the size and complexity of the Company as we transitioned to a Phase 3 clinical development company and prepare to transition from a clinical-stage company to a fully integrated biotechnology company in anticipation of our first product launch; the expectations of institutional shareholders and any specific feedback received from shareholders; and the recommendations provided by the Chief Executive Officer with respect to the compensation of our executive officers, other than These factors provide the framework for compensation decisions for each of our executive officers, including our named executive officers. The Compensation and Leadership Development Committee and the Board, as applicable, do not assign relative weights or rankings to these factors, and do not consider any single factor as determinative in the compensation of our executive officers. Rather, the Compensation and Leadership Development Committee and the Board, as applicable, rely on their own knowledge and judgment in assessing these factors and making 40 compensation decisions. Role of Management In discharging its responsibilities, the Compensation and Leadership Development Committee works with management, including our Chief Executive Officer. Our management assists the Compensation and Leadership Development Committee by providing information on corporate and individual performance, market compensation data and management’s perspective on compensation matters. In addition, at the beginning of each year, our Chief Executive Officer reviews the performance of our other executive officers, including our other named executive officers based on our achievement of our corporate goals and each executive officer’s overall performance during that year. The Compensation and Leadership Development Committee solicits and reviews our Chief Executive Officer’s recommendations for base salary increases, annual cash bonuses, annual equity awards and any other compensation opportunities for our other executive officers, including our other named executive officers, and considers our Chief Executive Officer’s recommendations in determining such compensation. Role of Compensation Consultant The Compensation and Leadership Development Committee engages an external compensation consultant to assist it by providing information, analysis and other advice relating to our executive compensation program. For review and analysis of the compensation for our executive officers, including our named executive officers; research, development and review of our compensation peer support on other compensation matters as requested throughout the year. Aon reports directly to the Compensation and Leadership Development Committee and to the Compensation and Leadership Development Committee chair. Aon also coordinates with our management for data collection and job matching for our executive officers. The Compensation and Leadership Development Committee reviewed its relationship with Aon and considered Aon’s independence in light of all relevant factors, including those set forth in the Exchange Act and in applicable Nasdaq listing rules. The Compensation and Leadership Development Committee concluded that the work performed by Aon and Aon’s senior advisors involved in the engagements did not raise any conflict of interest. In reaching these conclusions, our Compensation and Leadership Development Committee considered the factors set forth in the SEC rules and the applicable Nasdaq rules. Role of Market Data For purposes of comparing our executive compensation against the competitive market, the Compensation and Leadership Development Committee reviews and considers the compensation levels and practices of a group of peer companies. This compensation peer group consists of public biotechnology companies that are similar to us in terms of market capitalization, stage of development and number of employees. As a Nasdaq-listed 41 To determine the composition of the peer group for publicly-traded companies listed in the United States (including both U.S.-headquartered and European-headquartered companies), with a preference towards companies with a recent IPO (i.e., within the past five years); companies in the pre-commercial biotechnology or health care technology sectors, with preference towards mental health care and healthcare technology platform companies, as appropriate; similar market capitalization—within a range of approximately 0.33x to approximately 3.0x our market capitalization in the stage of development of each company’s development candidates, with a focus on companies with similar headcount—within a range of This analysis led to the selection of the following peer group which was used to make the relevant compensation assessments for
PRIMARY ELEMENTS OF EXECUTIVE COMPENSATION PROGRAM The primary elements of our executive compensation program are: base salary; short-term incentive compensation in the form of annual cash bonuses; and long-term incentive compensation in the form of annual equity awards. Our executive officers, including our named executive officers, are also eligible to participate in our standard employee benefit plans, such as our health and welfare benefits plans, and defined contribution retirement plans on the same basis as our other employees in the U.S. or U.K., as applicable. In addition, as described below, our executive officers, including our named executive officers, are entitled to certain severance payments, change-in-control severance payments and benefits pursuant to their employment agreements, described herein. Base Salary We pay base salaries to our executive officers, including our named executive officers, to provide a market competitive fixed remuneration that reflects the responsibilities of the role undertaken, the experience of the individual, and their performance in the role over time. At the time of hire, base salaries are determined for our executive officers, including our named executive officers, based on the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above. Typically, at the beginning of each year, the Compensation and Leadership Development Committee reviews base salaries for our executive officers, 42 including our named executive officers, based on such factors to determine if an increase is appropriate. In addition, base salaries may be adjusted in the event of a promotion or significant change in responsibilities. In January
(1) All amounts, except those for Mr. Nath and Mr. Falvey, have been converted from GBP to USD using the The actual base salaries paid to our named executive officers in Short-Term Incentive Compensation Annual Cash Bonuses We provide short-term incentive compensation opportunities to our executive officers, including our named executive officers, in the form of annual cash bonuses to incentivize and award delivery of the Company’s strategy and corporate objectives on an annual basis. For Performance Goals At the beginning of each year, the Board discusses with the Chief Executive Officer the annual corporate performance objectives that are intended to be the most significant drivers of our short-term and long-term success. After the end of the relevant financial year, the Compensation and Leadership Development Committee assesses the results of the corporate goals, reviews management’s self-assessment, evaluates specific achievements that advanced the prior year’s corporate objectives, and determines our overall success in the prior year. The Compensation and Leadership Development Committee considers our Chief Executive Officer’s recommendations, and independently reviews and approves the total percentage achievement level for each of the other named executive officers. Target Annual Bonuses At the time of hire, the target annual bonus is determined for each of our named executive officers, and at the beginning of each year, the Compensation and Leadership Development Committee reviews and determines whether to change the target annual bonus for each such individual. The Compensation and Leadership Development Committee considers the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above, with an emphasis on market data from our compensation peer group for comparable positions. Target annual bonuses represent a specific percentage of annual base salary. Each year, we evaluate our target annual bonuses relative to our executive peer group and adjust the targets, as appropriate, to stay aligned with our compensation philosophy. In January 43 The Corporate Goals and Achievements Prepare for commercial launch in TRD – In collaboration with Lykos Therapeutics, we applied for a new CPT III code for the delivery of psychedelic treatments with the goal of ensuring broad and equitable access to psychedelic therapies, if approved, for people who urgently need new options to treat their mental health conditions. The American Medical Association accepted the application and released the language for the CPT III code titled “Continuous In-Person Monitoring and Intervention during Psychedelic Medication Therapy,” which became effective January 1, 2024. We entered into research collaborations with Greenbrook TMS and Hackensack Meridian Health to explore and develop multiple potential commercial delivery models for COMP360 psilocybin treatment if approved. Manage our cash runway and enhance shareholder value – During 2023, we raised an aggregate of approximately $180 million in gross proceeds from our private placement financing, sales under our ATM facility and the closing of our loan facility with Hercules Capital. In August 2023, we completed a Grow our pipeline beyond COMP360 in TRD – We quality processes. In January The table below sets forth the
(1) All amounts, except those for Mr. Nath, have been converted from GBP to USD using the (2) (3) Mr. Long-Term Incentive Compensation Long-term incentive compensation in the form of equity incentives aligns the interests of our executive officers, including our named executive officers, with long-term shareholder interests and allows us to attract, incentivize, and retain staff in a competitive market. As a form of compensation, share-based incentives also enable us to more effectively manage the Company’s cash resources. In connection with the IPO, we adopted the COMPASS Pathways plc 2020 Share Option and Incentive Plan (the “2020 Plan”). The 2020 Plan allows for the grant of options, restricted share awards, restricted share unit awards (“RSUs”), other share or cash-based awards and dividend equivalent awards to employees, non-employee directors and consultants.
Typically, at the beginning of each year, the Compensation and Leadership Development Committee determines the size and relative weighting of the annual equity awards for our executive officers, including our named executive officers, it deems reasonable and appropriate based on such factors. With the help of our compensation consultant, we determine whether to grant additional equity awards, the mix of RSUs and options and the amount of equity awards to give to our executive officers based on benchmarking the position of each executive officer against the compensation paid to people in similar positions in our peer group. In February
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Employment Arrangements with our Named Executive Officers In connection with our IPO, the Compensation and Leadership Development Committee reviewed the employment agreements with our executive officers, including Our post-employment compensation arrangements set forth in the employment agreements are designed to provide reasonable compensation to executive officers who leave the Company under certain circumstances to facilitate their transition to new employment. Further, we seek to mitigate any potential employer liability and avoid future disputes or litigation by requiring a departing executive officer to sign a separation and release agreement acceptable to us as a condition to receiving post-employment compensation payments or benefits. Our Compensation and Leadership Development Committee and the Board do not consider specific amounts payable under these post-employment compensation arrangements when establishing annual compensation. It does believe, however, that these arrangements are necessary to offer compensation packages that are competitive. For more information on the service and employment agreements with our named executive officers and post-employment compensation arrangements, see the discussion under the headings “Employment Agreements, Change of Control and Severance Arrangements with Named Executive Officers” later in this Proxy Statement. Other Elements of Compensation Retirement Plans We currently maintain a 401(k) retirement savings plan for our U.S.-based employees, including any U.S.-based named executive officers, who satisfy certain eligibility requirements. The U.S. Internal Revenue Code (the “Code”) allows eligible employees to defer a portion of their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k) plan. We currently contribute a 4% safe harbor match on employee contributions up to the statutory limit. We also maintain a defined contribution plan for U.K. employees, including any U.K.-based named executive officers, who satisfy certain eligibility requirements. Other Compensation Policies and Practices Policy Prohibiting Hedging and Pledging Our Insider Trading Policy prohibits our executive officers, the non-employee members of our Board and certain designated employees who in the course of the performance of their duties have access to material, non-public information regarding the Company from engaging in the following transactions: selling any of our securities that they do not own at the time of the sale (a “short sale”); buying or selling puts, calls, other derivative securities of the Company or any derivative securities that provide the economic equivalent of ownership of any of our securities or an opportunity, direct or indirect, to profit from any change in the value of our securities or engaging in any other hedging transaction with respect to our securities at any time; using our securities as collateral in a margin account; and pledging our securities as collateral for a loan (or modifying an existing pledge) unless the pledge has been approved by the Audit and Risk Committee of the Board of Directors. Compensation Recovery Policy On November 1, 2023, we adopted a compensation recovery policy designed to comply with the mandatory compensation “clawback” requirements under Nasdaq rules that became effective as of October 2, 2023. Our compensation recovery policy provides that in the event we are required to prepare an accounting restatement, then we will seek to recover any erroneously awarded performance-based incentive compensation received by our current or former executive officers during the three completed fiscal years of the Company immediately preceding such financial restatement. This recovery is required without regard to any individual knowledge or responsibility related to the financial restatement. Notwithstanding the foregoing, we will not be required to seek such recovery if the Compensation and Leadership Development Committee determines it impracticable to do so (when permitted by Nasdaq rules), after reviewing all the relevant facts and circumstances and determining the direct expenses paid to third parties to assist in enforcing the policy would exceed the amount to be recovered and the Company has made a reasonable attempt to recover. Tax Considerations Taxation of “Parachute” Payments Sections 280G and 4999 of the U.S. Code provide that executive officers and directors who hold significant equity interests and certain other service providers may be subject to significant additional taxes if they receive payments or benefits in connection with a change in control of the company that exceeds certain prescribed limits, and that the company (or a successor) may forfeit a deduction on the amounts subject to this additional tax. We have not agreed to provide any executive officer, including any named executive officer, with a “gross-up” or other reimbursement payment for any tax liability that the executive officer might owe as a result of the application of Sections 280G or 4999 of the U.S. Code. SUMMARY COMPENSATION TABLE The following table shows the total compensation paid or accrued during the last two fiscal years ended December 31, 2023 and 2022
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(1) All 2023 amounts, except for Mr. Nath and Mr. Falvey, have been converted from GBP to USD using the 2023 average FX rate (£1:$1.2437). All 2022 amounts, except those for Mr. Nath, have been converted from GBP to USD using the 2022 average FX rate (£1: (2) The amounts reported in this column represent bonuses paid to each named executive officer based on the Compensation and Leadership Development Committee’s determination of performance against 2023 and 2022 goals, respectively, in its discretion. (3) The amount reported in the Stock Awards and Option Awards column represents the aggregate grant date fair value of time-based RSUs and time-based share options granted to each of the named executive officers in the applicable year, calculated in accordance with the provisions of FASB ASC Topic 718. The assumptions we used in calculating these amounts for 2023 are included in Note 8 of our audited consolidated financial statements for the year ended December 31, 2023 included in our Annual Report on Form 10-K, filed with the SEC on February 29, 2024. The assumptions we used in calculating these amounts for 2022 are included in Note 10 of our audited consolidated financial statements for the year ended December 31, 2022 included in our Annual Report on Form 10-K, filed with the SEC on February 28, 2023. The amounts reported in the Summary Compensation Table for these time-based RSUs and options may not represent the amounts that the named executive officers will actually realize from the awards. Whether, and to what extent, a named executive officer realizes value will depend on our actual operating performance, share price fluctuations and the named executive officer’s continued employment. (4) Effective August 1, 2022, Mr. Nath was appointed as our Chief Executive Officer and a member of our Board. (5) All other compensation for Mr. Nath in 2023 consists of (i) a one-time $250,000 cash contribution towards moving and relocation costs, (ii) housing allowance of (6) (9) All other compensation for (10) Mr. Falvey resigned from his role as chief financial officer to pursue other opportunities effective October 26, 2023 and his employment terminated effective November 3, 2023. The amount reported for salary represents the amount earned through November 3, 2023. (11) All other compensation for Mr. Falvey consists of (i) a EMPLOYMENT AGREEMENTS, CHANGE OF CONTROL AND SEVERANCE ARRANGEMENTS WITH NAMED EXECUTIVE OFFICERS Kabir Nath 48 General Terms. Effective August 1, 2022, we entered into an employment agreement with Mr. Nath in connection with his appointment as our Chief Executive Officer. The Mr. Nath's employment agreement provides for an annual base salary of $580,000 (upon Mr. Nath's relocation to the United Kingdom, such salary will be paid in pound sterling (“GBP”) and be equal to the greater of (i) £431,000 GBP or (ii) the GBP equivalent of $580,000 U.S. dollars calculated at the then-prevailing exchange rate), which is subject to annual review and redetermination. Pursuant to his employment agreement, Mr. Nath is eligible to earn an annual incentive bonus, with a target bonus amount of 60% of his then-current annual base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances) as determined by our Board in its discretion. In addition, Mr. Nath will receive (i) a housing stipend of £12,000 per month through August 2023; (ii) a one-time reimbursement payment of up to $5,000 for attorneys’ fees; and (iii) a one-time cash payment of $250,000 Payments Upon Termination. Either party may terminate the employment agreement upon ninety (90) days’ written notice. The Company may terminate the Employment Agreement at any time for “cause” (as such term is defined in the employment agreement). Mr. Nath may terminate the Employment Agreement upon thirty (30) days’ written notice for “good reason” (as such term is defined in the Employment Agreement), subject to Company’s right to cure the deficiency. In the event we terminate Mr. Nath’s employment without “cause” or Mr. Nath terminates his employment for “good reason”, Mr. Nath is entitled to a cash severance payment equal to one year’s annual salary plus the target annual bonus amount for the year in which such termination occurs. Guy Goodwin General Terms. In July 2021, we entered into an employment agreement with Dr. Goodwin in connection with his appointment as our Chief Medical Officer. Dr. Goodwin’s employment agreement provides for a base salary of £324,450 ($446,346), which is subject to annual review and redetermination. In addition, Dr. Goodwin is entitled to participate in our executive variable cash compensation program. In his employment agreement, Dr. Goodwin is eligible to earn an annual incentive bonus, with a target bonus amount of 35% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances) as determined by our Board of Directors in its discretion. Dr. Goodwin is only entitled to payment of a bonus payment if he is in the Company’s employment on the date that the bonus is paid and is not eligible for a bonus payment if he is subject to any disciplinary action or investigation at the date any bonus is being considered or paid. Dr. Goodwin is also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time. Payments upon Termination. The Company may, in its discretion, terminate Dr. Goodwin’s employment at any time with immediate effect by providing notice to Dr. Goodwin that it is exercising its right and will make a payment in lieu of notice (“PILON”). Such PILON is equal to the base salary which Dr. Goodwin would be entitled to receive during the notice period of three months less deductions required by law and will be paid within 28 days. Dr. Goodwin is subject to immediate termination and is not entitled to any further payment, including any PILON which the Company is entitled to recover if payment was already made, other than amounts accrued as of the termination date in the event he is terminated for certain reasons for cause, including gross misconduct, serious breach of his employment agreement, gross negligence or incompetence and certain other requirements, as set forth in his employment agreement. In the event Dr. Goodwin is terminated for any reason, under most circumstances, the Company is required to reimburse him for any unused holiday entitlements. Following service of notice to terminate the employment by either party, which is required to be given with not less than three months’ prior written notice, the Company may place Dr. Goodwin on garden leave for the whole or part of the remainder of his employment. Under garden leave, Dr. Goodwin would receive his base salary for the period, but would not be entitled to receive any bonus or other incentive in respect of the period of garden leave. If Dr. Goodwin is terminated other than for misconduct, lack of capability or poor performance, or if Dr. Goodwin terminates employment in response to a fundamental breach of contract by the Company within 12 months following a change of control of the Company (as defined in the employment agreement), subject to certain conditions, Dr. Goodwin is entitled to (a) 12 months’ base salary, (b) the pro rata bonus Dr. Goodwin would have 49 received for the year in which his employment is terminated had he not been dismissed, but not including any pro rata bonus for a notice period which is not worked and (c) an amount equivalent to the cost to the Company of providing Dr. Goodwin with his other employment benefits for 12 months. Matthew Owens General Terms. Effective February 1, 2022, we entered into an employment agreement with Mr. Owens in connection with his appointment as our Chief Legal Officer and General Counsel. Mr. Owens’ employment agreement provides for an initial base salary of £300,000 ($371,130), which is subject to annual review and redetermination. In addition, Mr. Owens is entitled to participate in our executive variable cash compensation program. Pursuant to his employment agreement, Mr. Owens is eligible to earn an annual incentive bonus, with a target bonus amount of 40% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances). To assist with his relocation to the U.K., we agreed to pay a cash contribution towards housing costs of £10,000 ($12,371) per month through August 2023 and to provide tax advisory services in connection with the preparation and filing of tax returns for the first two tax years of his employment. Mr. Owens is also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time. His employment agreement also provides for a pension contribution equivalent to 8% of his monthly base salary. Payments upon Termination. The Company may, in its discretion, terminate Mr. Owens' employment at any time with immediate effect by providing notice to Mr. Owens that it is exercising its right and will make a Mr. Owens is subject to immediate termination and is not entitled to any further payment, including any PILON which the Company is entitled to recover if payment was already made, other than amounts accrued as of the termination date in the event he is terminated for certain reasons for cause, including gross misconduct, serious breach of her employment agreement, gross negligence or incompetence and certain other requirements, as set forth in her employment agreement. In the event Mr. Owens is terminated for any reason, under most circumstances, the Company is required to reimburse him for any unused holiday entitlements. Following service of notice to terminate the employment by either party, which is required to be given with not less than nine months’ prior written notice, the Company may place Mr. Owens on garden leave for the whole or part of the remainder of her employment. Under garden leave, Mr. Owens would receive his base salary for the period, but would not be entitled to receive any bonus or other incentive in respect of the period of garden leave. If Mr. Owens is terminated other than for misconduct, lack of capability or poor performance, or if Mr. Owens terminates employment in response to a fundamental breach of contract by the Company within 12 months following a change of control of the Company (as defined in the employment agreement), subject to certain conditions, Mr. Owens is entitled to (a) 12 months’ base salary, (b) the pro rata bonus Mr. Owens would have received for the year in which his employment is terminated had he not been dismissed, but not including any pro rata bonus for a notice period which is not worked and (c) an amount equivalent to the cost to the Company of providing Mr. Owens with his other employment benefits for 12 months. Ekaterina Malievskaia General Terms. In September 2020, we entered into an employment agreement with Dr. Malievskaia in connection with her continued employment as our Chief Innovation Officer. This employment agreement ended when Dr. Malievskaia stepped down from her executive officer role in June 2023. Once, she stepped down from her executive officer role, Dr. Malievskaia received compensation for her service on the board in accordance with our Director Compensation Policy. Dr. Malievskaia’s employment agreement 50 Michael Falvey General Terms Mr. Falvey's employment agreement provided for a initial base salary of $430,000, which was subject to annual review and redetermination. In addition, Mr. Falvey was entitled to participate in our executive variable cash compensation program. In his employment agreement, Mr. Flavey was eligible to earn an annual incentive bonus, with a target bonus amount of 45% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances) as determined by our Board of Directors in its Separation Agreement. We and Mr. Falvey entered into a separation agreement and release dated October 24, 2023, pursuant to which his employment 2020 Share Option and Incentive Plan In September 2020, we adopted the 2020 Plan. The 2020 Plan allows the Compensation and Leadership Development Committee to make equity-based and cash-based incentive awards to our officers, employees, directors and other key persons (including consultants). We have initially reserved 2,074,325 ordinary shares (the “Initial Limit”) for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by four percent of the outstanding number of ordinary shares on the immediately preceding December 31, or such lesser number of shares as determined by our Compensation and Leadership Development Committee (the “Annual Increase”). This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. The ordinary shares underlying any awards that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by us prior to vesting, satisfied without any issuance of shares, expire or are otherwise terminated (other than by exercise) under the 2020 Plan will be added back to the ordinary shares available for issuance under the 2020 Plan. The maximum aggregate number of shares that may be issued in the form of incentive share options shall not exceed the Initial Limit cumulatively increased on January 1, 2022 and on each January 1 thereafter by the lesser of the Annual Increase for such year or 2,074,325 ordinary shares. The 2020 Plan is administered by our Compensation and Leadership Development Committee. Our Compensation and Leadership Development Committee has full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants, and to determine the specific terms and conditions of each award, subject to the provisions of the 2020 Plan. Persons eligible to participate in the 2020 Plan will be those full or part-time officers, employees, non-employee directors and other key persons (including consultants) as selected from time to time by our Compensation and Leadership Development Committee in its discretion. The 2020 Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under Section 422 of the Code, options intended to qualify as U.K. tax advantaged options under our company share option plan, or CSOP, which is a sub-plan under the 2020 Plan and options that do not so qualify for any tax advantages. Other than the nominal cost options granted to non-U.S. tax persons in lieu of restricted share units, the option exercise price of each option will be determined by our Compensation and Leadership Development Committee but may not be less than 100% of the fair market value of our ordinary shares on the date of grant. The term of each option will be fixed by our Compensation and Leadership Development Committee and 51 may not exceed ten years from the date of grant. Our Compensation and Leadership Development Committee development committee will determine at what time or times each option may be exercised. Our Compensation and Leadership Development Committee may award share appreciation rights subject to such conditions and restrictions as it may determine. Share appreciation rights entitle the recipient to ordinary shares, or cash, equal to the value of the appreciation in our share price over the exercise price. The exercise price of each share appreciation right may not be less than 100% of the fair market value of the ordinary shares on the date of grant. Our Compensation and Leadership Development Committee may award restricted shares and restricted share units to participants subject to such conditions and restrictions as it may determine. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with us through a specified vesting period. Our Compensation and Leadership Development Committee may also grant ordinary shares that are free from any restrictions under the 2020 Plan. Unrestricted shares may be granted to participants in recognition of past services or other valid consideration and may be issued in lieu of cash compensation due to such participant. Our Compensation and Leadership Development Committee may grant cash bonuses under the 2020 Plan to participants, subject to the achievement of certain performance goals. The 2020 Plan provides that in the case of, and subject to, the consummation of a “sale event” as defined in the 2020 Plan, all outstanding awards may be assumed, substituted or otherwise continued by the successor entity. To the extent that the successor entity does not assume, substitute or otherwise continue such awards, then (i) all share options and share appreciation rights will automatically become fully exercisable and the restrictions and conditions on all other awards with time-based conditions will automatically be deemed waived, and awards with conditions and restrictions relating to the attainment of performance goals may become vested and non-forfeitable in connection with a sale event in the Compensation and Leadership Development Committee’s discretion and (ii) upon the effectiveness of the sale event, the 2020 Plan and all awards will automatically terminate. In the event of such termination, (i) individuals holding options and share appreciation rights will be permitted to exercise such options and share appreciation rights (to the extent exercisable) prior to the sale event, or (ii) we may make or provide for a cash payment to participants holding options and share appreciation rights equal to the difference between the per share cash consideration payable to shareholders in the sale event and the exercise price of the options or share appreciation rights (to the extent then exercisable). Our Board may amend or discontinue the 2020 Plan and our Compensation and Leadership Development Committee may amend the exercise price of options and amend or cancel outstanding awards for purposes of satisfying changes in law or any other lawful purpose but no such action may adversely affect rights under an award without the holder’s consent. Certain amendments to the 2020 Plan require the approval of our shareholders. No awards may be granted under the 2020 Plan after the date that is ten years from the date of shareholder approval. OUTSTANDING EQUITY AWARDS AT The following table sets forth information concerning the outstanding equity awards held by each of the named executive officers as of December 31,
(1) Market value has been computed in accordance with SEC rules as the number of unvested shares or units multiplied by the closing price per share of our ADSs on The Nasdaq Global Select Market as of December (2) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting 53 date. The vesting commencement date is August 1, 2022. This grant was awarded outside the 2020 Plan pursuant to the inducement grant exception under Nasdaq Listing Rule 5635(c). (3) Options vest over a 4 year service period in 48 equal monthly installments, subject to continued service through each applicable vesting date. The vesting commencement date is February 2, 2023. This grant was made under the 2020 Plan. (4) The restricted share units vest in four equal annual installments, subject to continued service through each applicable vesting date. The vesting commencement date is August 1, 2022. This grant was made under the 2020 Plan. (5) The restricted share units vest in four equal annual installments, subject to continued service through each applicable vesting date. The vesting commencement date is February 2, 2023. This grant was made under the 2020 Plan. (6) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is August (9) Options vest in four equal annual installments, subject to continued service through each applicable vesting date. The vesting commencement date is February 2, 2023. This grant was made under the 2020 Plan. (12) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is September 18, 2020. This grant was made under the 2020 Plan. (13) The restricted share units are subject to 25% vesting upon the earlier of (i) the one year anniversary of the date of grant, or (ii) the first day following the six-month anniversary of the listing of the Company’s ordinary shares on any stock exchange on which the closing price of the shares is 20% higher than the listing price for at least five consecutive trading days. They vest quarterly thereafter over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is August 12, 2021. This grant was made under the 2017 Plan. (14) Options vested over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is December 6, 2021. Pursuant to the terms of his separation agreement, the vesting was accelerated for 25% of the shares underlying this grant. This grant was made under the 2020 Plan. PAY VERSUS PERFORMANCE The following table shows the total compensation for each of our principal executive officers (each a "PEO") and the average compensation for our other named executive officers during the last
(1) Mr. Goldsmith served as our PEO throughout 2021 and during 2022 until July 31, 2022. (2) Mr. Nath served as our PEO beginning on August 1, 2022. (3) For fiscal 2023, our non-PEO named executive officers were Guy Goodwin, Matthew Owens, Ekaterina Malievskaia and Michael Falvey. For fiscal 2022, our non-PEO named executive officers were Matthew Owens and Ekaterina Malievskaia. For fiscal 2021, our non-PEO named executive officers were Ekaterina Malievskaia, Guy Goodwin, Piers Morgan (our former Chief Financial Officer) and Nate Poulsen (our former General Counsel). 54 (4) The 2023 compensation actually paid to our PEO and the average compensation actually paid to our non-PEO named executives reflects the following adjustments from total compensation reported in the Summary Compensation Table:
(5) The 2022 compensation actually paid to our PEO and the average compensation actually paid to our non-PEO named executives reflects the following adjustments from total compensation reported in the Summary Compensation Table:
Analysis of the Information Presented in the Pay Versus Performance Table We generally seek to incentivize long-term performance, and therefore do not specifically align our performance goals 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, we are providing the following descriptions of the relationships between information presented in the Pay Versus Performance table. Compensation Actually Paid and Net Loss As a Compensation Actually Paid and TSR As shown in the following graph, the compensation actually paid to our SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS Equity Compensation Plans Table The following table sets forth information as of December 31,
(1) The weighted average exercise price is calculated based solely on outstanding share options. (2) Includes the following plans: our 2020 Plan, our 2017 Plan and our Employee Stock Purchase Plan (“ESPP”). (3) The Company initially reserved 2,074,325 of its ordinary shares for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by up to 4% of the outstanding number of ordinary shares on the immediately preceding December 31, or such lesser number of shares as determined by our Compensation and Leadership Development Committee. This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. The total number of ordinary shares that may be issued under the 2020 Plan was 57 up to a total of 340,053 ordinary shares to participating employees. The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2022 and each January 1 thereafter through January 1, 2022, by the lesser of (i) 1% of the outstanding number of ordinary shares on the immediately preceding December 31 or (ii) 510,058 ordinary shares. The number of shares reserved under the ESPP is subject to change in the event of a share split, share dividend or other change in our capitalization. On October 1, 2021, the Company launched the Share Incentive Plan and the ESPP, through which employees can purchase shares at a discounted price. At the end of each six month purchase period, shares will automatically be purchased at the lower of the opening and closing price of the shares for the purchase period minus a 15% discount. (4) Amount does not include any purchase rights accruing under the ESPP during the current purchase period, which commenced on November 1, (5) On August 1, 2022, we granted a non-qualified share option to purchase an aggregate of 600,000 shares to Mr. Nath in connection with his appointment as Chief Executive Officer. In accordance with Nasdaq Listing Rule 5635(c)(4), the non-qualified share option award was approved by Compensation and Leadership Development Committee and made as a material inducement to Mr. Nath’s entry into employment as our new Chief Executive Officer. The non-qualified share option has a 10-year term and vests as to one-fourth on August 1, 2023 (the first anniversary of his employment commencement date) and as to the remaining three-fourths in equal monthly installments over the following 36 months, subject to Mr. Nath remaining an employee on the applicable vesting dates. The non-qualified share option has other terms that mirror those of non-qualified share options granted under our 2020 Plan and the standard form of non-qualified share option agreement. AUDIT AND RISK COMMITTEE REPORT The Audit and Risk Committee oversees the accounting and financial reporting processes of COMPASS Pathways plc (the “Company”) and the audits of the Company’s financial statements, evaluates auditor performance, manages relations with the Company’s independent registered public accounting firm and evaluates policies and procedures relating to internal control systems. The Audit and Risk Committee operates under a written Audit and Risk Committee charter that has been adopted by the Board of the Company (the “Board”). All members of the Audit and Risk Committee currently meet the independence and qualification standards for audit committee membership set forth in the listing standards provided by Nasdaq and the U.S. Securities and Exchange Commission (“SEC”), and the Board has determined that Annalisa Jenkins and Linda McGoldrick are “audit committee financial experts,” as the SEC has defined that term in Item 407 of Regulation S-K. The Audit and Risk Committee members are not professional accountants or auditors. The members’ functions are not intended to duplicate or to certify the activities of management and the independent registered public accounting firm. The Audit and Risk Committee serves a board-level oversight role in which it provides advice, counsel and direction to management and the auditors on the basis of the information it receives, discussions with management and the auditors, and the experience of the Audit and Risk Committee’s members in business, financial and accounting matters. The Audit and Risk Committee oversees the Company’s financial reporting process on behalf of the Board. The Company’s management has the primary responsibility for the financial statements and reporting process, including the Company’s system of internal controls. In fulfilling its oversight responsibilities, the Audit and Risk Committee reviewed with management the audited financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, The Audit and Risk Committee also reviewed with PricewaterhouseCoopers LLP (“PwC”), our independent registered public accounting firm, which is responsible for expressing an opinion on the conformity of the audited financial statements with accounting principles generally accepted in the United States of America, their judgments as to the quality and the acceptability of the Company’s financial reporting and such other matters as are required to be discussed with the Committee by Public Company Accounting Oversight Board (“PCAOB”) AU 380, Communications with Audit Committees, and SEC Regulation S-X Rule 207, Communication with Audit Committees. The Audit and Risk Committee has received the written disclosures and the letter from PwC required by the applicable requirements of the PCAOB regarding PwC’s communications with the audit committee concerning independence. The Audit and Risk Committee has discussed with PwC its independence from management and the Company. In addition to the matters specified above, the Audit and Risk Committee discussed with PwC the overall scope, plans and estimated costs of their audit. The Audit and Risk Committee met with PwC periodically, with and without management present, to discuss the results of PwC’s examinations, the overall quality of the Company’s financial reporting and PwC’s reviews of the quarterly financial statements, and drafts of the quarterly and annual reports. Based on the reviews and discussions referred to above, and subject to the limitations of the Audit and Risk Committee’s role and responsibilities referred to above and in the Audit and Risk Committee charter, Audit and Risk Committee recommended to the Board that the Company’s audited financial statements should be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
The information contained in this Audit and Risk Committee report shall not be deemed to be “soliciting material,” “filed” with the SEC, subject to Regulations 14A or 14C of the Exchange Act, or subject to the liabilities of Section 18 of the Exchange Act. No portion of this audit and risk committee report shall be deemed to be incorporated by reference into any filing under the Securities Act, or the Exchange Act, through any general statement incorporating by reference in its entirety the proxy statement in which this report appears, except to the extent that we specifically incorporate this report or a portion of it by reference. In addition, this Audit and Risk Committee report shall not be deemed filed under either the Securities Act or the Exchange Act. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table and related footnotes set forth information with respect to the beneficial ownership of our ordinary shares, as of •each beneficial owner of more than 5% of our ordinary shares; •each of our named executive officers and directors; and •all of our current executive officers and directors as a group. Beneficial ownership is determined in accordance with the rules and regulations of the SEC. Under these rules, beneficial ownership includes any shares as to which a person has sole or shared voting power or investment power. In computing the number of ordinary shares beneficially owned by a person and the percentage ownership of that person, ordinary shares subject to options, or other rights held by such person that are currently exercisable or will become exercisable within 60 days of Unless otherwise indicated, addresses of the directors, executive officers and named beneficial owners are in care of COMPASS Pathways plc, 3rd Floor, 1 Ashley Road, Altrincham, Cheshire WA14 2DT, United Kingdom.
* Represents beneficial ownership of less than one percent. (1) Based 61 (2) Consists of (i) 3,858,000 ordinary shares and (ii) 2,976,253 ordinary shares underlying outstanding warrants. The Warrants may not be exercised to the extent that doing so would result in the holder of the Warrants (together with the holder’s affiliates and any other persons acting as a group together with the holder or any of the holder’s affiliates) beneficially owning more than 9.99% of the shares of Ordinary Shares outstanding immediately prior to or after giving effect to such exercise (the “Ownership Limitation”). Based on a Schedule 13G filed with the SEC on August 28, 2023, by TCG Crossover Fund I, L.P. (“TCG Crossover I”), CG Crossover GP I, LLC ("TCG Crossover GP I"); TCG Crossover Fund II, L.P. ("TCG Crossover II"), TCG Crossover GP II, LLC (“TCG Crossover GP II”) and Chen Yu. TCG Crossover I is the record holder of (i) 964,500 of these ordinary shares and (ii) 964,500 of the shares underlying these outstanding warrants. TCG Crossover GP I is the general partner of TCG Crossover I and may be deemed to have voting, investment and dispositive power with respect to the securities held by TCG Crossover I. TCG Crossover II is the record holder of (i) 2,893,500 of these shares and (ii) 2,893,500 of the shares underlying these outstanding warrants. TCG Crossover GP II is the general partner of TCG Crossover II and may be deemed to have voting, investment and dispositive power with respect to the securities held by TCG Crossover II. Chen Yu is the sole managing member of TCG Crossover GP I and TCG Crossover GP II and may be deemed to share voting, investment and dispositive power with respect to these securities. Each of TCG Crossover GP I, TCG Crossover GP II and Chen Yu disclaim beneficial ownership except to the extent of their pecuniary interest therein. The address for individual and entities listed above is 705 High Street, Palo Alto, California 94301. (3) Represents (i) (4) Represents March 27, 2024. Mr. Goldsmith and Dr. Malievskaia are married but they expressly disclaim beneficial ownership of each other’s shares in the Company. Pursuant to the terms of call option agreements dated May 19, 2020, as amended and restated on July 21, 2020, as further amended and restated on September 9, 2020, and as further amended effective February 15, 2023, Lars Christian Wilde, a former co-founder of the Company, has an option to purchase 776,565 of our ordinary shares for an exercise price of less than £0.01 per share from each of Mr. Goldsmith and Dr. Malievskaia, exercisable at any time following our initial public offering until September 9, 2033. (5) Represents (6) Represents (i) (7) Represents (i) (8) Represents (i) (9) Represents 11,556 ordinary shares underlying options to purchsae ordinary shares from the Company exercisable within 60 days after March 27, 2024. (10) Represents (i) 89,049 ordinary shares and (ii) (11) Represents (12) Represents (i) 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC and (ii) 62 within 60 days after (13) Represents (14) Represents (1) Represents (i) 1,733,882 ordinary shares, (ii) 2,968 ordinary shares issuable upon the settlement of RSUs releasable within 60 days of March 27, 2024 and (iii) 1,222,463 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after March 27, 2024 held by our current officers and directors. DELINQUENT SECTION 16(a) REPORTS Under Section 16(a) of the Exchange Act, directors, executive officers, our principal accounting officer and beneficial owners of 10% or more of our common stock, or reporting persons, are required to report to the SEC on a timely basis the initiation of their status as a reporting person and any changes with respect to their beneficial ownership of our common stock. Based solely on our review of copies of such forms that have been filed with the SEC, or written representations from reporting persons, we believe that during the fiscal year ended December 31, requirements. CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH RELATED PERSONS Other than the compensation arrangements described above under the sections “Director Compensation” and “Executive Compensation” and the transactions described below, in the period from January 1, AGREEMENTS WITH OUR EXECUTIVE OFFICERS AND DIRECTORS We have entered into employment agreements with our executive officers, a separation agreement with Michael Falvey and service agreements with our non-executive directors. These agreements contain customary provisions and representations, including confidentiality, non-competition, non-solicitation and inventions assignment undertakings by the executive officers. However, the enforceability of the non-competition provisions may be limited under applicable law. FAMILY RELATIONSHIPS George Goldsmith, our co-founder and former chief executive officer and Board Chair, is married to Ekaterina Malievskaia, our co-founder and former Chief Innovation Officer and INSURANCE AND INDEMNIFICATION To the extent permitted by the Companies Act 2006 and in accordance with our Articles of Association, we are empowered to indemnify our directors against any liability they incur by reason of their directorship. We maintain directors’ and officers’ insurance to insure such persons against certain liabilities. We also enter into a deed of indemnity with each of our directors and executive officers. These agreements and our Articles of Association require us to indemnify our directors and executive officers to the fullest extent permitted by law. RELATED PARTY TRANSACTION POLICY We have adopted a related party transaction policy. Pursuant to this policy, the Audit and Risk Committee has the primary responsibility for reviewing and approving or disapproving “related party transactions,” which are transactions between us and related parties in which the related party has a direct or indirect material interest. For purposes of this policy, a related party is defined as a director, executive director, nominee for director, or greater than 5% beneficial owner of any class of our voting securities, and their immediate family members. DELIVERY OF PROXY MATERIALS Our EACH ORDINARY SHAREHOLDER IS URGED TO COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY FORM. EACH ADS HOLDER IS URGED TO COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ADS PROXY CARD TO CITIBANK, N.A., THE DEPOSITARY FOR THE ADSs. ADDITIONAL INFORMATION U.K. STATUTORY ANNUAL ACCOUNT AND REPORTS OF THE BOARD OF DIRECTORS AND AUDITORS OF COMPASS PATHWAYS PLC FOR THE YEAR ENDED DECEMBER 31, Consistent with its obligations under the U.K. Companies Act 2006, our Board will present at the AGM our U.K. statutory annual accounts and reports for the year ended December 31, SHAREHOLDERS' RIGHT TO CALL A GENERAL MEETING Our shareholders have the right to call a meeting of our shareholders. The U.K. Companies Act 2006 generally requires the directors to call a general meeting once we have received requests to do so from shareholders representing at least 5% of our paid-up shares entitled to vote at a general meeting. The U.K. Companies Act 2006 generally prohibits shareholders of a U.K. public limited company from passing written resolutions. However, significant shareholders would, in any case, still have the power to call a general meeting and propose resolutions. These provisions are mandatory under the U.K. Companies Act 2006 and cannot be waived by our shareholders. SHAREHOLDER PROPOSALS Pursuant to Rule 14a-8 under the Exchange Act, in order to be considered for inclusion in our proxy statement for our Under Section 338 of the U.K. Companies Act 2006, shareholders representing at least 5% of holders entitled to vote on a resolution at an annual general meeting may require the Company to include such resolution in its notice of an annual general meeting. Provided the applicable thresholds are met, notice of the resolution must be received by the Company at the Office of the Company Secretary, 3rd Floor, 1 Ashley Road, Altrincham, Cheshire, WA14 2DT, United Kingdom at least six weeks prior to the date of the annual general meeting, or, if later, at the time notice of the annual general meeting is delivered to shareholders. QUESTIONS? If you have any questions or need more information about the AGM please write to us at: Ben Harber Company Secretary COMPASS Pathways plc 3rd Floor 1 Ashley Road Altrincham Cheshire WA14 2DT United Kingdom Annex A DIRECTORS’ REMUNERATION REPORT This part of the Remuneration Report sets out the Key considerations when determining the Policy The Policy was designed by the Committee with a number of specific principles in mind: •attract, retain and motivate high •encourage a corporate culture that promotes the highest level of integrity, teamwork and ethical standards; •be competitive against appropriate market benchmarks (being predominantly the US biotech sector) and have a strong link to performance, providing the ability to earn above-market rewards for strong performance; •be simple and understandable, both internally and externally; •encourage increased equity ownership to motivate executives in the overall interests of shareholders, the Company, employees and •take due account of good governance and promote the long-term success of the Company. A-1 In seeking to achieve the above objectives, the Committee is mindful of the views of a broad range of stakeholders in the business and accordingly takes account of a number of factors when setting remuneration including: market conditions; pay and benefits in relevant comparator organisations; terms and conditions of employment across the Company; the Company’s risk appetite; the expectations of institutional shareholders; the Nasdaq or SEC. In The Directors identify any conflicts of interest at the beginning of each Board meeting and the beginning of each Committee meeting. Mr. Goldsmith who served as The Key Changes to the Policy The Committee maintains that the overall structure of remuneration is appropriate and no fundamental structural changes are proposed. The key changes to the Policy reflect developments in market and best practices, including: •establishing the maximum annual bonus payable to an Executive Director at 100% of base salary for each Executive Director; 2 •providing flexibility for annual bonus to be payable in cash or shares, at the discretion of the Committee; •establishing for purposes of the UK pension scheme that maximum contribution, cash supplement (or combination thereof) payable to an Executive Director at 5% of base salary or such lesser level as is available to the general workforce; and •introduction of new Compensation Recovery Policy, which was adopted by the Company to comply with the mandatory compensation "clawback" requirements under applicable Nasdaq listing rules. The Policy for Executive Directors During The total remuneration for the Executive Directors is made up of the following elements: •salary; •benefits; •annual bonus; •long-term incentive awards; and •Pension/401k contribution. 3 Nasdaq IPO, the Company has issued equity under these plans and has issued an inducement grant, on such terms as are defined under applicable
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The Committee operates the annual bonus and 2020 Plan, in accordance with their rules, and where relevant, 6.to make certain exceptions to the Compensation Recovery Policy (to the extent permitted under applicable Nasdaq listing rules) and to determine whether to recover, and if so, the method for recovering, erroneously awards compensation from current and former Executive Directors in the event of an accounting restatement. In certain exceptional circumstances, such as a material acquisition/divestment of a Group business or a change in the broader business environment, which mean the original performance conditions are no 7 longer appropriate, the Committee may adjust the objectives, alter weightings or set different measures as necessary, to ensure the conditions achieve their original purpose and are not materially less difficult to satisfy. The Directors' service contracts and letters of appointment are kept for inspection at the Company's registered office. The Company has a classified Board with each Director serving a three-year term; each Director must seek re-election at the annual general meeting of shareholders at the end of his or her three-year term. Historical equity incentive awards Awards which were granted prior to 18 September 2020 are disclosed separately in this Remuneration Report in the Statement of Directors’ Shareholding and Share Interests section. These awards remain eligible to vest, based on their original terms which are described separately in the Directors' Remuneration Report. Annual bonus The annual bonus is designed to drive the achievement of the Company’s strategic and corporate objectives. These targets are agreed by the Board and selected because of their importance in value creation for shareholders. Objectives are weighted for Executive Directors in proportion to the degree of importance of that objective for the Company. The weightings are agreed by the Committee. Remuneration on recruitment The remuneration package for any new Executive Director will be determined by the Committee in accordance with the terms of the Policy at the time of appointment (including salary, benefits, annual bonus, long-term incentive awards and pension). It is recognised that in order to attract and recruit talented individuals the Policy needs to allow sufficient flexibility with respect to remuneration on recruitment. The following policies apply to the remuneration on recruitment of new Executive Directors: 8 Salary: Base salary will be determined based on the responsibilities of the role, experience of the individual and current market rates. It may be considered necessary to appoint a new Executive Director on above or below market rates (e.g. to reflect limited Board experience). In such circumstances, phased increases above those of the wider workforce may be required over an appropriate time period, to bring the salary to the desired market level, subject to the continued development in the role. Annual bonus: The ongoing annual bonus maximum will be in line with that outlined in the policy table for existing Executive Directors, Long-term incentive awards: 2020 Plan awards are granted in line with the policy outlined for existing Executive Directors. An initial award may be made on the date of appointment or shortly following an appointment. For internal appointments, existing awards will continue on their original terms. Benefits: Benefits provided should be in line with those of existing Executive Directors. For external and internal appointments, where required to meet business needs, reasonable relocation support will be provided. In addition, if it becomes necessary to appoint a new Executive Director from outside the UK, additional benefits may be provided to reflect local market norms or legislation. Pension/ Sign-on payments and buy-out awards: To enable the recruitment of exceptional talent, the Committee may offer additional cash and/or share-based remuneration to take account of and compensate for remuneration that the Executive Director is required to relinquish when leaving a former employer. The Committee will seek to structure any such replacement awards to be no more generous overall in terms of 9 quantum or vesting than the award to be forfeited from the previous employer and will take into account the timing, form and performance requirements of the awards forgone. Where appropriate, any long-term incentive awards will be granted under the 2020 Plan, however, the Committee will have discretion to make use of the flexibility to make awards under any relevant exemptions in the For an internal Executive Director appointment, any variable pay element awarded in respect of the prior role will be allowed to pay out according to its terms. In addition, any other contractual remuneration obligations existing prior to appointment may continue. The fees for any new Policy for payments on loss of office The Company does not have a policy of fixed term employment contracts, however, the Directors are required to retire and are entitled to put themselves forward for re-election at the AGM in accordance with their respective Director class, as prescribed by the Company’s articles of association (“Articles of Association”). The notice period for the current Chief Executive Officer’s employment contract is 90 days, provided however, that if the Company terminates his employment contract without cause, the Chief Executive Officer is entitled to a cash severance payment equal to one year’s annual salary plus the target annual bonus amount for the year in which such termination The Committee’s approach to payments in the event that an Executive Director’s employment is terminated is to take account of the individual circumstances including the reason for termination, 10 individual performance, contractual obligations, potential claims the Executive Director might have against the Company and the terms of the equity incentive plans in which the Executive Director participates. Termination by notice from the Company: up to 12 months’ notice, with the discretion for the Committee to make a payment in lieu of notice for base salary, pension and other benefits that would otherwise have been paid during the notice period. Annual bonus: except for the current Chief Executive Officer who is entitled to his target annual bonus in the event his employment is terminated by the Company without "cause" (as defined in his employment agreement) or by the Chief Executive Officer for "good reason" (as defined in his employment agreement), there is no automatic contractual entitlement to bonus or pro-rata bonus on termination, although this may be considered at the discretion of the Committee. Long-term incentives: whether any long-term incentive awards would vest and be exercisable upon loss of office would be subject to the relevant plan rules under which such award was granted. The 2020 Plan allows vesting and exercise of awards in the event of death, retirement, ill-health, injury, redundancy and any other reason at the discretion of the Committee. The Committee retains discretion to determine the extent to which the award will vest, taking into consideration the circumstances. Unvested awards normally lapse, although the Committee retains the power to determine, in accordance with the “good leaver” provisions of the relevant plan rules, what proportion of unvested awards will be retained and what proportion will lapse. In determining this, the Committee will give consideration to the reason for leaving, the extent of achievement of performance objectives at the date of leaving and may decide to pro-rate awards. Change of Control: on a change of control, all unvested awards vest on the date of change of control. Change of control provisions in the former Chief Innovation Officer’s 11 including by way of constructive dismissal) less any sums paid by way of notice or payment in lieu of notice. The former Chief Innovation Officer's employment agreement ended in June 2023 when she stepped down from her executive role. Additional payments: the Committee reserves the right to make payments it considers reasonable under a settlement agreement, including payment or reimbursement of reasonable legal and professional fees, untaken holiday and any payment for the settlement of potential claims against the Company in the UK or other jurisdictions. Payment or reimbursement of reasonable outplacement fees may also be provided. Compensation Recovery Policy During 2023, we adopted our Compensation Recovery Policy designed to comply with the mandatory compensation “clawback” requirements under Nasdaq rules that became effective as of 1 December 2023. Under this policy, in the event of certain accounting restatements, we will be required to recover erroneously received incentive compensation tied to a financial reporting measure (including measures related to stock price and total shareholder return) from our Executive Directors. The amount of erroneously awarded compensation to be recovered shall equal the excess of the amount actually received over the amount that would have been received had the financial statements been correct in the first instance. Where the financial reporting measure is related to stock price or total shareholder return, the Committee shall make a reasonable estimate of the effect of the accounting restatement upon the stock price or total shareholder return and the amount of the compensation to be recovered. The Committee also has the discretion to make certain exceptions to the Compensation Recovery Policy (to the extent permitted under applicable Nasdaq listing rules) and to determine whether to recover, and if so, the method for recovering, erroneously awarded compensation from current and former Executive Directors in the event of an accounting restatement. Currently, none of the incentive compensation payable to our Executive Directors is based on a financial reporting measure and therefore none of our current compensation is subject to recovery under this policy. 12 The Directors' service contracts are available for inspection at the Company's The Policy for the The Board approves fees payable to the The Policy for the Chief Executive Officer (CEO) The Board approves any compensation paid to the Chief Executive Officer The Policy for Non-Executive Directors The Board approves the fees payable to the Company’s non-Executive Directors.
14 Statement of consideration of employees’ pay and remuneration conditions elsewhere in the Group The Company does not formally consult with employees when drawing up the Policy. However, the Committee is made aware of employment conditions in the wider Group. The same broad principles apply to the Policy both for the Executive Directors and the wider employee population. However, the remuneration for the Executive Directors has a stronger emphasis on variable pay than for other employees. In particular, the following approach is used for the wider employee population in the Group: •Salaries, benefits and pensions or matching contributions under our 401(k) plan, as applicable, are compared to appropriate market rates and set at approximately mid market level with allowance for role, responsibilities and experience. •When setting salary levels for the Executive Directors, the Committee considers the salary increases provided to other employees. •An annual bonus plan is available to all employees and is based on business and individual performance. Payments under the bonus plan are entirely discretionary. 15 ANNUAL REPORT ON REMUNERATION Single total figure of remuneration of each Director (audited). The Directors received the following remuneration for the years ended 31 December
* 1George Goldsmith served as chief executive officer until 1 August 2022, he served as Executive Chair from 1 August 2022 until 31 December 2022 and he was appointed as Non Executive Director, effective from 1 January 2023. 2Ekaterina Malievskaia was appointed as Non Executive Director, effective from 17 June 2023. 3 Daphne Karydas was appointed as Non Executive Director, effective 18 September 2023. Her remuneration has been pro-rated above. **Relates to health insurance, life assurance, income protection insurance, pension/401(k) contributions, and housing allowance. Our Chief Executive Officer received $376,155 in compensation during 2023, which includes a housing allowance of $104,471 and a one-time cash contribution towards moving and relocation costs of $250,000. Our Chief Executive Officer also received $12,207 in 401(k) contributions and $3,600 in relation to health savings account contributions and $5,876 in relation to tax advice paid by the company on his behalf during 2023.i) No Director is currently in receipt of a pension contribution. Each Director is either not entitled to a pension payment or has opted out of receiving it. There Illustrations of Base Case, Expected and Maximum remuneration for the Executive Scenarios The charts set out for illustrative purposes only, what annual remuneration the Company expects the Executive The assumptions used in the calculations are set out below:
1)Base case: this illustration assumes a fixed base case, as set out above. This illustration assumes no annual bonus; 2)Expected case: this illustration assumes the base case remuneration set out above, plus an annual bonus. We make the assumption that The Group has used the exchange rate Annual performance bonus In During a series of meetings in December 2023 and January 18 Director individual performance. The Compensation and Leadership Development Committee reviewed the following corporate goals and based on the results approved an overall average The goals were as follows: Corporate Goals and Achievements • • •Strengthened balance sheet through equity and debt financings raising gross proceeds of approximately $185 million with potential additional gross proceeds of approximately $160 million dependent upon full exercise of warrants for cash; •Expanded shareholder base and attracted new leading biotech investors; •Took key steps to prepare for a successful and scalable commercial launch of COMP360 treatment, if regulatory approval is obtained, that will support access for as many patients as possible, including applying for CPT III code to cover in-person drug monitoring services associated with the administration of psychedelic drugs and entering into research collaborations with Greenbrook and Hackensack; •Progressed development of a pipeline of new drug and technology assets to increase the value of •Developed a high-performing team and a mission-driven organisation committed to the highest standards of quality and compliance. 19 Long term incentive awards during the year ended 31 December During the Payments to past Directors (audited) There were no payments to past Directors made during the financial year ending 31 December Payments for Loss of Office (audited) There were no payments made to Directors for Loss of Office during the financial year ending 31 December 20 Statement of Directors’ Shareholding and Share Interests (audited) The Company does not have a formal policy on Executive or Non-Executive Director shareholdings. The table below details the total number of shares owned (including their beneficial interests), the total number of share options held, the number of share options vested but not yet exercised and the total number of RSUs held as at 31 December
*Includes 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares.
*Includes 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares. The interests of the Directors in the Company’s share options and RSUs as at 31 December
(1) Price per share has been updated from 16.85 to 17.00 due to an error in the disclosure in 2022. (2) Price per share has been updated from 0.01 to N/A due to an error in the disclosure in 2022. (3) Price per share has been updated from 1.40 to 1.32 due to an error in the disclosure in 2022. (4) Price per share has been updated from 2.40 to 2.26 due to an error in the disclosure in 2022. (5) Price per share has been updated from 9.44 to 9.41 due to an error in the disclosure in 2022. (6) Price per share has been updated from 32.66 to 33.83 due to an error in the disclosure in 2022. (7) Price per share has been updated from 35.25 to 35.30 due to an error in the disclosure in 2022. 22 All options are subject to service rather than performance conditions. The options vest monthly over 4 years with a 1 year 25% cliff for those granted the one-year anniversary of the date of grant or the date of the 2024 annual general meeting of shareholders.. The beneficial interests in the Company’s shares of the Directors and their families were as follows:
*Represents beneficial ownership of less than one percent. **Includes 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares. ***Mr. Goldsmith and Dr. Malievskaia are married but they expressly disclaim beneficial ownership of each other’s shares in the Company and do not include their spouse's shares in the number of shares beneficially owned in the table above. Pursuant to the terms of call option agreements dated 19 May 2020, as amended and restated on 21 July 2020, as further amended and restated on 9 September 2020, and as further amended effective 15 February 2023, Lars Christian Wilde, a former co-founder of the Company, has an option to purchase 776,565 of our ordinary shares for an exercise price of less than £0.01 per share from each of Mr. Goldsmith and Dr. Malievskaia, exercisable at any time following our initial public offering until 9 September 2033. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission, or SEC. These rules generally attribute beneficial ownership of securities to persons who 23 possess sole or shared voting power or investment power with respect to those securities and include ordinary shares that can be acquired within 60 days of 31 December Total Shareholder Return for Compass Pathways American Depositary Shares The graph below shows the Company’s performance, measured by total shareholder return, for the Company’s American Depositary Shares (“ADSs”), which are listed on Nasdaq and each representing one of the Company’s ordinary shares against the Nasdaq Composite Index (Nasdaq: CMPS vs NCI) and the Nasdaq Biotech Index (Nasdaq: CMPS vs NBI). We have selected these indices for this comparison because the Company has been admitted to trading on the Nasdaq exchange and operates as a Biotech and we consider them to be the most suitable comparator indices. 24 Chief Executive Officer total remuneration history 2020 was the first year that the Company prepared a Remuneration Report. We have taken the exemption not to disclose 5 years of history of remuneration and have chosen to disclose remuneration history for 2020 onwards. Percentage change in remuneration of the Executive and Non-Executive Directors The year on year movement to 31 December
*Represents Kabir Nath **Represents George Goldsmith The year on year movement to 31 December
25
*Represents Kabir **Represents George Goldsmith ***Represents Ekaterina Malievskaia 1.None of the Non-Executive Directors are eligible for an annual bonus and none claimed any benefits during the year. 2. 3.Effective 1 4. 5.Effective 18 September 2023, Daphne Karydas joined as Non-Executive Director. 6.The employee % change compares the total prorated remuneration earned by all employees in 2023 versus 2022. Relative importance of spend on pay The Committee considers the Company’s research and development expenditure relative to remuneration expenditure for all employees, to be the most appropriate metric for assessing overall spend on pay due to the nature and stage of the Company’s business. Dividend distribution comparators have not been included as the Company has no history of such transactions. The graph below illustrates the gross remuneration to all employees compared to research and development expenditure in 26 trials for the treatment of TRD and into trials for other indications, as well as developing other neuropsychiatric therapies. Structure and Role of Committee and Approach to Remuneration Matters The Committee is comprised of Annalisa Jenkins, who chairs the Committee, David Norton and Wayne Riley. The constitution of the Committee is in compliance with Nasdaq requirements. The members of the Committee are Independent Directors as defined in Rule 10C-1 under the US Securities Exchange Act of 1934 and under applicable The Committee’s approach to remuneration matters is to enable the Company to attract and retain talent, incentivise long-term value generation and effectively manage the Company’s cash resources. It is the belief of the Committee that this is best achieved through a greater emphasis on variable rather than fixed remuneration, comprised of a mix of base salary and benefits, along with the flexibility to appropriately reward and incentivise with variable pay and longer term incentives, as described within the Policy. When applying the Policy to Executive Directors, the Committee seeks to comply with the QCA Code so far as it is practical to do so, having regard to the size, nature and business requirements of the Company. Operation of the Policy will largely be compliant with the remuneration elements of the QCA Code, but we are aware that in certain instances we will differ from the QCA Code. These instances reflect differences in US market practice when compared to the UK, and the need to balance our governance obligations against the importance of offering competitive remuneration packages in the markets in which we compete and operate. The terms of reference of the Committee can be found on our website at External advice During the year, the Company engaged Aon Solutions UK Limited (Aon) to support management and the Committee with advice on remuneration matters, in particular peer-group benchmarking of Director and Senior Management remuneration and the grant of long term equity incentives under the 2020 Plan that became effective on the day prior to the listing of our ADSs on Nasdaq. The consultants were appointed by the Committee. The 28 Aon is a leading global professional services firm and the Board confirm no conflicts of interest before each meeting. During Aon. Proposed Application of the Policy for the Year Ending 31 December CEO remuneration With effect from 1 January The target bonus for Mr. Nath for the Long term incentives for Mr Goldsmith serves as Non-Executive Director cash fees Non-Executive Directors are paid a basic fee. In addition to the basic fee, committee fees may be paid for service as Lead Independent Director, chairing or membership of a Board Non-Executive Directors are eligible to receive the following annual fees:
* ** 30 Note: Chair and committee member retainers are in addition to retainers for members of the Board of Directors. In accordance with the Company's Articles of Association, Directors are allocated into one of three classes. Each class of Directors serves a staggered three-year term. At each annual general meeting, the successors of Directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. Directors of the class retiring at the annual general meeting shall be eligible for re-appointment by ordinary resolution at such annual general meeting. Details of
*George Goldsmith and Ekaterina Malievskaia provided notice that they will resign from the Board effective 29 March 2024 The information in this part of the Remuneration Report is not subject to audit. Directors’ Remuneration Policy This remuneration policy will be submitted for approval by shareholders in a binding vote at the AGM scheduled for 9 May 2024. Statement of consideration of shareholder views The Compensation and Leadership Development Committee will consider any shareholder feedback received and ongoing shareholder feedback throughout the year, when reviewing and applying the Policy each year. The guidance from shareholder representative bodies is also considered on an ongoing basis. The Committee submits its Directors’ remuneration report for a non-binding, advisory vote of shareholders at its annual general meeting of shareholders. At the 2023 annual general meeting of shareholders, 98.27% of shareholders voted in favor of the proposal to receive and approve, as a non-binding advisory resolution, the Directors’ Remuneration Report for the year ended 31 December 2022, with 1.73% voting against such proposal. 32 Although non-binding, the Compensation and Leadership Development Committee will review and consider the voting results when making future decisions regarding our Director remuneration program. The attendees of the Compensation and Leadership Development Committee meetings in 2023 were as follows:
*David York Norton attended 4 of 5 meetings due to scheduling conflicts. 33 FORM OF PROXY FOR ORDINARY SHAREHOLDERS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Audit Fees(1) | Audit Fees(1) | 500 | 447 | Audit Fees(1) | 543 | 500 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Audit-related fees(2) | Audit-related fees(2) | 199 | 407 | Audit-related fees(2) | 197 | 199 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tax fees(3) | Tax fees(3) | 0 | 6 | Tax fees(3) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
All Other Fees(4) | All Other Fees(4) | 433 | 596 | All Other Fees(4) | 587 | 433 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | Total | 1,132 | 1,456 | Total | 1,327 | 1,132 |
Name | Age | Position | ||||||||||||||||||
George Goldsmith | Chair of the Board | |||||||||||||||||||
David Norton | Lead Independent Director | |||||||||||||||||||
Kabir Nath | Chief Executive Officer, Director | |||||||||||||||||||
Annalisa Jenkins, MBBS | Director | |||||||||||||||||||
Daphne Karydas | 51 | Director | ||||||||||||||||||
Thomas Lönngren | Director | |||||||||||||||||||
Ekaterina Malievskaia | ||||||||||||||||||||
Linda McGoldrick | Director | |||||||||||||||||||
Robert McQuade | Director | |||||||||||||||||||
Wayne Riley | Director |
Name | Audit and Risk Committee | Compensation and Leadership Development Committee | Nominating and Corporate Governance | Innovation and Research Committee | ||||||||||||||||||||||
George Goldsmith | ||||||||||||||||||||||||||
David Norton | X | |||||||||||||||||||||||||
Kabir Nath | ||||||||||||||||||||||||||
Annalisa Jenkins, MBBS | X | Chair | X | |||||||||||||||||||||||
Daphne Karydas | Chair | |||||||||||||||||||||||||
Thomas Lönngren | Chair | |||||||||||||||||||||||||
Ekaterina Malievskaia | X | |||||||||||||||||||||||||
Linda McGoldrick | X | |||||||||||||||||||||||||
Robert McQuade | X | Chair | ||||||||||||||||||||||||
Wayne Riley | X | X |
Board Diversity Matrix (As of April 4, 2023) | ||||||||||||||
Total Number of Directors | 9 | |||||||||||||
Female | Male | Non‐Binary | Did Not Disclose Gender | |||||||||||
Part I: Gender Identity | ||||||||||||||
Directors | 3 | 6 | ||||||||||||
Part II: Demographic Background | ||||||||||||||
African American or Black | 1 | |||||||||||||
Alaskan Native or Native American | ||||||||||||||
Asian | 1 | |||||||||||||
Hispanic or Latinx | ||||||||||||||
Native Hawaiian or Pacific Islander | ||||||||||||||
White | 3 | 5 | ||||||||||||
Two or More Races or Ethnicities | 1 | |||||||||||||
LGBTQ+ | ||||||||||||||
Did Not Disclose Demographic Background |
Board Diversity Matrix (As of March 27, 2024) | ||||||||||||||
Total Number of Directors | 10 | |||||||||||||
Female | Male | Non‐Binary | Did Not Disclose Gender | |||||||||||
Part I: Gender Identity | ||||||||||||||
Directors | 4 | 6 | ||||||||||||
Part II: Demographic Background | ||||||||||||||
African American or Black | 1 | |||||||||||||
Alaskan Native or Native American | ||||||||||||||
Asian | 1 | |||||||||||||
Hispanic or Latinx | ||||||||||||||
Native Hawaiian or Pacific Islander | ||||||||||||||
White | 4 | 5 | ||||||||||||
Two or More Races or Ethnicities | 1 | |||||||||||||
LGBTQ+ | ||||||||||||||
Did Not Disclose Demographic Background |
Fees | ||||||||||||||||||||
Earned or | ||||||||||||||||||||
Paid in | Option | |||||||||||||||||||
Cash | Awards | Total | ||||||||||||||||||
Name | ($) | ($) (1) (2) | ($) | |||||||||||||||||
David Norton (4) | 60,620 | 112,479 | 173,099 | |||||||||||||||||
Jason Camm (3) | — | — | — | |||||||||||||||||
Annalisa Jenkins (4) | 59,382 | 112,479 | 171,861 | |||||||||||||||||
Thomas Lönngren | 45,692 | 112,479 | 158,171 | |||||||||||||||||
Robert McQuade | 54,434 | 112,479 | 166,913 | |||||||||||||||||
Linda McGoldrick | 56,290 | 112,479 | 168,769 | |||||||||||||||||
Wayne Riley(5) | 46,393 | 140,599 | 186,992 |
Fees | ||||||||||||||||||||
Earned or | ||||||||||||||||||||
Paid in | Option | |||||||||||||||||||
Cash | Awards | Total | ||||||||||||||||||
Name | ($) | ($) (1) (2) | ($) | |||||||||||||||||
George Goldsmith(2)(3) | 99,495 | 227,513 | 327,008 | |||||||||||||||||
David Norton (2)(3) | 63,892 | 151,675 | 215,567 | |||||||||||||||||
Annalisa Jenkins (2)(3) | 63,102 | 151,675 | 214,777 | |||||||||||||||||
Daphne Karydas(2)(4) | 13,846 | 349,867 | 363,713 | |||||||||||||||||
Thomas Lönngren(2) | 48,145 | 151,675 | 199,820 | |||||||||||||||||
Ekaterina Malievskaia(5) | — | — | — | |||||||||||||||||
Linda McGoldrick(2) | 57,801 | 151,675 | 209,476 | |||||||||||||||||
Robert McQuade(2) | 59,162 | 151,675 | 210,837 | |||||||||||||||||
Wayne Riley(2) | 49,183 | 151,675 | 200,858 |
Name | Age | Position | ||||||||||||
Kabir Nath | Chief Executive Officer, Director | |||||||||||||
Chief Medical Officer | ||||||||||||||
Teri Loxam | 52 | Chief Financial Officer | ||||||||||||
Matthew Owens | General Counsel and Chief Legal Officer |
• | Attract, retain, and motivate high caliber executive talent and focus them on the delivery of the Company’s strategic and business objectives; | ||||||||||
• | Be competitive against appropriate market benchmarks and have a strong link to performance, providing the ability to earn above-market rewards for strong performance; | ||||||||||
• | Be simple and understandable, both internally and externally; | ||||||||||
• | Encourage increased equity ownership to motivate executives in the overall interests of shareholders, the Company, employees and customers; and | ||||||||||
• | Take due account of good governance and promote the long-term success of the Company. |
✓ | Maintain an Independent Compensation and Leadership Development Committee. The Compensation and Leadership Development Committee consists solely of independent directors. |
✓ | Retain an Independent Compensation Advisor. The Compensation and Leadership Development Committee engages its own compensation advisor to provide information and analysis related to annual executive compensation decisions, including the |
✓ | Review Executive Compensation Annually. The Compensation and Leadership Development Committee annually reviews our compensation strategy, including a review and determination of our compensation peer group used for comparative purposes. |
✓ | Design Compensation At-Risk. Our executive compensation program is designed so that a significant portion of our executive officers’ compensation is “at risk” based on our corporate performance, as well as equity-based, to align the interests of our executive officers and shareholders. |
✓ | Use a Pay-for-Performance Philosophy. Our executive officers’ compensation is directly linked to achievement of company goals and includes a significant long-term equity component, thereby making a substantial portion of each executive officer’s total compensation dependent upon our share price. |
✓ | Maintain a Compensation Recovery Policy. We adopted a compensation recovery policy designed to comply with the mandatory compensation “clawback” requirements under Nasdaq rules that became effective as of October 2, 2023. |
✗ | No Excessive Executive |
✗ | No Post-Employment Tax Payment Reimbursement. We do not provide any tax reimbursement payments (including “gross-ups”) on any change-in-control or severance payments or benefits. |
✗ | No Hedging or Pledging. Our Insider Trading Policy prohibits our executive officers, the non-employee members of our Board and certain designated employees from hedging or pledging our securities, or engaging in short sales or trading in standardized options related to our securities. |
AC Immune SA | Praxis Precision Medicine, Inc. | ||||||||||
Adaptimmune Therapeutics plc | Prothena Corporation plc | ||||||||||
Applied Molecular Transport Inc. | PureTech Health plc | ||||||||||
Arcus Biosciences, Inc. | Replimmune Group, Inc. | ||||||||||
ATAI Life Sciences SA | Rocket Pharmaceuticals, Inc. | ||||||||||
Autolus Therapeutics plc | Scholar Rock Holding Corporation | ||||||||||
Axsome Therapeutics, Inc. | |||||||||||
Y-mAbs Therapeutics, Inc. | |||||||||||
Barinthus Biotherapeutics plc | |||||||||||
(formerly Vaccitech) |
Named Executive Officer (1) | 2021 Annual Base Salary | 2022 Annual Base Salary | Percentage Increase | ||||||||
Kabir Nath(2) | $— | $580,000 | N/A | ||||||||
George Goldsmith (3) | $525,768 | $536,283 | 2.0% | ||||||||
Matthew Owens(4) | $— | $371,130 | N/A | ||||||||
Ekaterina Malievskaia | $371,130 | $378,553 | 2.0% |
Named Executive Officer (1) | 2022 Annual Base Salary | 2023 Annual Base Salary | Percentage Increase | ||||||||
Kabir Nath | $580,000 | $594,500 | 2.5% | ||||||||
Guy Goodwin | $411,540 | $411,540 | —% | ||||||||
Matthew Owens | $373,110 | $398,108 | 6.7% | ||||||||
Michael Falvey | $430,000 | $439,890 | 2.3% | ||||||||
Ekaterina Malievskaia | $380,572 | $380,572 | —% |
Named Executive Officer (1) | 2022 Annual Base Salary | Target Annual Cash Bonus (% of Annual Base Salary) | 2022 Payout (% of Target) | 2022 Annual Cash Bonus | ||||||||||
Kabir Nath(2) | $580,000 | 60% | 100% | $145,000 | ||||||||||
George Goldsmith(3) | $491,337 | 60% | 100% | $294,964 | ||||||||||
Matthew Owens(4) | $371,130 | 40% | 96% | $133,131 | ||||||||||
Ekaterina Malievskaia | $378,563 | 45% | 96% | $163,539 |
Named Executive Officer (1)(2) | 2023 Annual Base Salary | Target Annual Cash Bonus (% of Annual Base Salary) | 2023 Payout (% of Target) | 2023 Annual Cash Bonus | ||||||||||
Kabir Nath | $594,500 | 60% | 95% | $338,900 | ||||||||||
Guy Goodwin | $411,540 | 40% | 94% | $155,462 | ||||||||||
Matthew Owens | $398,108 | 40% | 94% | $149,244 | ||||||||||
Michael Falvey(3) | $439,890 | 45% | (3) | (3) | ||||||||||
Named Executive Officer | New Hire Option Award | New Hire Restricted Share Unit Award | ||||||
Kabir Nath | 600,000 | 50,000 | ||||||
Matthew Owens | 100,000 | 12,400 |
Named Executive Officer | Annual Option Award | Annual Restricted Share Unit Award | ||||||
George Goldsmith | 173,000 | 29,000 | ||||||
Ekaterina Malievskaia | 75,000 | 13,000 |
Named Executive Officer | Annual Option Award | Annual Restricted Share Unit/Nominal Cost Option Awards | ||||||
Kabir Nath | 153,900 | 25,200 | ||||||
Guy Goodwin | 63,900 | 10,800 | ||||||
Matthew Owens | 63,900 | 10,800 | ||||||
Michael Falvey | 45,000 | 22,500 | ||||||
Ekaterina Malievskaia | 67,500 | 11,700 |
Stock | Option | All Other | ||||||||||||||||||||||||||||||||||||||||||||||||
Salary | Bonus | Awards | Awards | Compensation | Total | |||||||||||||||||||||||||||||||||||||||||||||
Name and Principal Position(1) | Year | ($) | ($) (2) | ($) (3) | ($) (3) | ($) | ($) | |||||||||||||||||||||||||||||||||||||||||||
Kabir Nath (4) | 2022 | 243,123 | 145,000 | 754,668 | 6,422,963 | 77,822 (5) | 7,643,576 | |||||||||||||||||||||||||||||||||||||||||||
Chief Executive Officer | 2021 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
George Goldsmith (6) | 2022 | 491,337 | 294,964 | 418,629 | 1,732,031 | 40,070 (7) | 2,977,030 | |||||||||||||||||||||||||||||||||||||||||||
Former Chief Executive Officer | 2021 | 584,658 | 321,562 | — | — | 37,304 (7) | 943,524 | |||||||||||||||||||||||||||||||||||||||||||
Matthew Owens(8) | 2022 | 339,619 | 133,131 | 179,000 | 1,004,560 | 155,879 (9) | 1,812,188 | |||||||||||||||||||||||||||||||||||||||||||
General Counsel and Chief Legal Officer | 2021 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Ekaterina Malievskaia | 2022 | 378,563 | 163,549 | 187,661 | 750,880 | 25,802 (10) | 1,506,456 | |||||||||||||||||||||||||||||||||||||||||||
Chief Innovation Officer | 2021 | 412,700 | 231,800 | — | — | 24,635 (10) | 669,135 |
Stock | Option | All Other | ||||||||||||||||||||||||||||||||||||||||||||||||
Salary | Bonus | Awards | Awards | Compensation | Total | |||||||||||||||||||||||||||||||||||||||||||||
Name and Principal Position(1) | Year | ($) | ($) (2) | ($) (3) | ($) (3) | ($) | ($) | |||||||||||||||||||||||||||||||||||||||||||
Kabir Nath (4) | 2023 | 594,500 | 338,900 | 273,420 | 1,241,783 | 376,155 (5) | 2,824,758 | |||||||||||||||||||||||||||||||||||||||||||
Chief Executive Officer | 2022 | 243,123 | 145,000 | 754,668 | 6,422,963 | 77,822 | 7,643,576 | |||||||||||||||||||||||||||||||||||||||||||
Guy Goodwin | 2023 | 411,540 | 155,462 | — | 632,689 | — | 1,199,691 | |||||||||||||||||||||||||||||||||||||||||||
Chief Medical Officer | 2022 | 409,416 | 172,951 | — | 553,648 | — | 1,136,015 | |||||||||||||||||||||||||||||||||||||||||||
Matthew Owens(6) | 2023 | 398,108 | 149,244 | 117,180 | 515,594 | 137,159 (7) | 1,317,285 | |||||||||||||||||||||||||||||||||||||||||||
General Counsel and Chief Legal Officer | 2022 | 339,619 | 133,131 | 179,000 | 1,004,560 | 155,879 | 1,812,189 | |||||||||||||||||||||||||||||||||||||||||||
Ekaterina Malievskaia(8) | 2023 | 175,167 | — | 126,945 | 544,642 | 24,827 (9) | 871,581 | |||||||||||||||||||||||||||||||||||||||||||
Director and Former Chief Innovation Officer | 2022 | 378,563 | 163,549 | 187,661 | 750,880 | 25,802 | 1,506,455 | |||||||||||||||||||||||||||||||||||||||||||
Michael Falvey (10) | 2023 | 368,793 | — | 244,125 | 363,094 | 698,872 (11) | 1,674,884 | |||||||||||||||||||||||||||||||||||||||||||
Former Chief Financial Officer |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
Market | ||||||||||||||||||||||||||||||||
Number of | Value of | |||||||||||||||||||||||||||||||
Number of Securities | Shares or | Shares or | ||||||||||||||||||||||||||||||
Underlying Unexercised | Option | Units That | Units That | |||||||||||||||||||||||||||||
Options | Exercise | Option | Have Not | Have Not | ||||||||||||||||||||||||||||
Exercisable | Unexercisable | Price | Expiration | Vested | Vested | |||||||||||||||||||||||||||
Name | (#) | (#) | ($) | Date | (#) | ($) (1) | ||||||||||||||||||||||||||
Kabir Nath (2) | — | 600,000 | 14.94 | 7/31/2032 | ||||||||||||||||||||||||||||
(5) | 50,000 | 401,500 | ||||||||||||||||||||||||||||||
George Goldsmith (3) | 63,900 | 49,700 | 17.00 | 9/18/2030 | ||||||||||||||||||||||||||||
(4) | 36,042 | 136,958 | 15.75 | 1/31/2032 | ||||||||||||||||||||||||||||
(6) | 19,561 | 157,075 | ||||||||||||||||||||||||||||||
(7) | 29,000 | 232,870 | ||||||||||||||||||||||||||||||
Matthew Owens (8) | — | 100,000 | 15.75 | 1/31/2032 | ||||||||||||||||||||||||||||
(9) | 12,400 | 99,572 | ||||||||||||||||||||||||||||||
Ekaterina Malievskaia (3) | 47,925 | 37,275 | 17.00 | 9/18/2030 | ||||||||||||||||||||||||||||
(4) | 15,625 | 59,375 | 15.75 | 1/31/2032 | ||||||||||||||||||||||||||||
(6) | 19,561 | 157,075 | ||||||||||||||||||||||||||||||
(7) | 13,000 | 104,390 |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
Market | ||||||||||||||||||||||||||||||||
Number of | Value of | |||||||||||||||||||||||||||||||
Number of Securities | Shares or | Shares or | ||||||||||||||||||||||||||||||
Underlying Unexercised | Option | Units That | Units That | |||||||||||||||||||||||||||||
Options | Exercise | Option | Have Not | Have Not | ||||||||||||||||||||||||||||
Exercisable | Unexercisable | Price | Expiration | Vested | Vested | |||||||||||||||||||||||||||
Name | (#) | (#) | ($) | Date | (#) | ($) (1) | ||||||||||||||||||||||||||
Kabir Nath (2) | 200,000 | 400,000 | 14.94 | 07/31/2032 | — | — | ||||||||||||||||||||||||||
(3) | 32,062 | 121,838 | 10.85 | 02/01/2033 | — | — | ||||||||||||||||||||||||||
(4) | — | — | — | — | 37,500 | 328,125 | ||||||||||||||||||||||||||
(5) | — | — | — | — | 25,200 | 220,500 | ||||||||||||||||||||||||||
Guy Goodwin (6) | 58,333 | 41,667 | 30.26 | 08/15/2031 | — | — | ||||||||||||||||||||||||||
(7) | 20,625 | 24,375 | 15.75 | 01/31/2032 | — | — | ||||||||||||||||||||||||||
(8) | 2,000 | 6,000 | 0.01 | 01/31/2032 | — | — | ||||||||||||||||||||||||||
(9) | — | 10,800 | 0.01 | 02/01/2033 | — | — | ||||||||||||||||||||||||||
(3) | 13,311 | 50,589 | 10.85 | 02/01/2033 | — | — | ||||||||||||||||||||||||||
Matthew Owens (10) | 45,832 | 49,974 | 15.75 | 01/31/2032 | — | — | ||||||||||||||||||||||||||
(3) | 13,311 | 50,589 | 10.85 | 02/01/2033 | — | — | ||||||||||||||||||||||||||
(11) | — | — | — | — | 9,300 | 81,375 | ||||||||||||||||||||||||||
(5) | — | — | — | — | 10,800 | 94,500 | ||||||||||||||||||||||||||
Ekaterina Malievskaia (12) | 69,225 | 15,975 | 17.00 | 09/18/2030 | — | — | ||||||||||||||||||||||||||
(7) | 34,374 | 40,626 | 15.75 | 01/31/2032 | — | — | ||||||||||||||||||||||||||
(3) | 14,061 | 53,439 | 10.85 | 02/01/2033 | — | — | ||||||||||||||||||||||||||
(13) | — | — | — | — | 8,384 | 73,360 | ||||||||||||||||||||||||||
(11) | — | — | — | — | 9,750 | 85,313 | ||||||||||||||||||||||||||
(5) | — | — | — | — | 11,700 | 102,375 | ||||||||||||||||||||||||||
Michael Falvey (14) | 106,250 | — | 29.60 | 02/03/2024 | — | — | ||||||||||||||||||||||||||
(15) | 19,687 | — | 10.85 | 02/03/2024 | — | — |
Year | Summary Compensation Table Total for First PEO(1) | Summary Compensation Table Total for Second PEO(2) | Compensation Actually Paid to First PEO(1)(4) | Compensation Actually Paid to Second PEO(2)(5) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers(3) | Average Compensation Actually Paid to Non-PEO Named Executive Officers(3)(6) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return | Net Income | ||||||||||||||||||
(a) | (b) | (b) | (c) | (c) | (d) | (e) | (f) | (g) | ||||||||||||||||||
2022 | 2,977,030 | 7,643,576 | 786,153 (4) | 3,848,172 (4) | 1,659,322 | 639,499 (4) | 47 | (91,505,000) | ||||||||||||||||||
2021 | 943,524 | — | (2,553,688) (5) | — | 1,215,021 | (1,893,965) (5) | 130 | (71,742,000) |
Year | Summary Compensation Table Total for First PEO(1) | Summary Compensation Table Total for Second PEO(2) | Compensation Actually Paid to First PEO(1)(5) | Compensation Actually Paid to Second PEO(2)(6) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers(3) | Average Compensation Actually Paid to Non-PEO Named Executive Officers(3) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return | Net Income | ||||||||||||||||||
(a) | (b) | (b) | (c) | (c) | (d) | (e) | (f) | (g) | ||||||||||||||||||
2023 | — | 2,824,757 | — | 2,375,232 | 1,259,653 | 931,410 | 51 | (118,464,000) | ||||||||||||||||||
2022 | 2,977,030 | 7,643,576 | 786,153 | 3,848,172 | 1,659,322 | 639,499 | 47 | (91,505,000) | ||||||||||||||||||
2021 | 943,524 | — | (2,533,688) | — | 1,215,021 | (1,893,965) | 130 | (71,742,000) |
First PEO | Second PEO | Average of Non-PEO's | |||||||||
Total compensation reported in the Summary Compensation Table | — | 2,824,757 | 1,259,653 | ||||||||
Deduct the equity compensation reported in the Summary Compensation Table in column (Stock Awards) and column (Option Awards), | — | (1,515,203) | (636,067) | ||||||||
Add year end fair value all awards granted during 2023 that are outstanding and unvested as of the end of the fiscal year; | — | 931,442 | 298,372 | ||||||||
Add change in fair value (from prior year-end) of prior year equity awards that are unvested and outstanding | — | 32,631 | 620 | ||||||||
Add for awards that were granted and vested in 2023, the fair value as of the vesting date | — | 74,709 | 74,709 | ||||||||
Add the change in fair value (from prior year-end to vesting date) of prior year equity awards that vested in the 2023 | — | 2,895 | (11,276) | ||||||||
Subtract for any awards granted in any prior fiscal year that fail to meet the applicable vesting conditions during 2023, the amount equal to the fair value at the end of the prior fiscal year | — | — | (54,602) | ||||||||
Compensation Actually Paid for Fiscal Year 2023 | — | 2,375,232 | 931,410 |
First PEO | Second PEO | Average of Non-PEO's | |||||||||
Total compensation reported in the Summary Compensation Table | 2,977,030 | 7,643,576 | 1,659,322 | ||||||||
Deduct the equity compensation reported in the Summary Compensation Table in column (Stock Awards) and column (Option Awards), | (2,150,660) | (7,177,631) | (1,061,051) | ||||||||
Add year end fair value all awards granted during 2022 that are outstanding and unvested as of the end of the fiscal year; | 881,954 | 3,382,227 | 476,050 | ||||||||
Add change in fair value (from prior year-end) of prior year equity awards that are unvested and outstanding | (854,742) | — | (354,936) | ||||||||
Add for awards that were granted and vested in 2022, the fair value as of the vesting date | 264,337 | — | 57,296 | ||||||||
Add the change in fair value (from prior year-end to vesting date) of prior year equity awards that vested in the 2022 | (331,766) | — | (137,183) | ||||||||
Compensation Actually Paid for Fiscal Year 2022 | 786,153 | 3,848,172 | 639,498 |
First PEO | Average of Non-PEO's | |||||||
Total compensation reported in the Summary Compensation Table | 943,524 | 1,215,022 | ||||||
Deduct the equity compensation reported in the Summary Compensation Table in column (Stock Awards) and column (Option Awards), | — | (485,111) | ||||||
Add year end fair value all awards granted during 2021 that are outstanding and unvested as of the end of the fiscal year; | — | 353,522 | ||||||
Add change in fair value (from prior year-end) of prior year equity awards that are unvested and outstanding | (2,691,551) | (1,331,837) | ||||||
Add for awards that were granted and vested in 2021, the fair value as of the vesting date | — | — | ||||||
Add the change in fair value (from prior year-end to vesting date) of prior year equity awards that vested in 2021 | (785,661) | (385,451) | ||||||
Subtract for any awards granted in any prior fiscal year that fail to meet the applicable vesting conditions during 2021, the amount equal to the fair value at the end of the prior fiscal year | — | (1,260,109) | ||||||
Compensation Actually Paid for Fiscal Year 2021 | (2,533,688) | (1,893,964) |
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (#) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights ($) (1) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column) (3)(4) | ||||||||
Equity Compensation Plans Approved by Security Holders (2) | 4,492,732 | $12.08 | 1,390,436 | ||||||||
Equity Compensation Plans not Approved by Security Holders(5) | 600,000 | $1.78 | — | ||||||||
Total | 5,092,732 | $13.85 | 1,390,436 |
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (#) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights ($) (1) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column) (3)(4) | ||||||||
Equity Compensation Plans Approved by Security Holders (2) | 6,369,328 | $11.84 | 854,013 | ||||||||
Equity Compensation Plans not Approved by Security Holders(5) | 600,000 | $14.94 | — | ||||||||
Total | 6,969,328 | $13.14 | 854,013 |
The Audit and Risk Committee of the Board | ||
Daphne Karydas, Chair | ||
Annalisa Jenkins | ||
Linda McGoldrick | ||
Robert McQuade |
Ordinary Shares Beneficially Owned | ||||||||||||||
Name of Beneficial Owner | Number | Percent | ||||||||||||
Greater than 5% Shareholders | ||||||||||||||
ATAI Life Sciences AG(1) | 9,435,758 | 20.81% | ||||||||||||
George Goldsmith(2) | 4,419,691 | 9.72% | ||||||||||||
Ekaterina Malievskaia(3) | 4,371,525 | 9.62% | ||||||||||||
Named Executive Officers and Directors | ||||||||||||||
George Goldsmith(2) | 4,419,691 | 9.72% | ||||||||||||
Kabir Nath(4) | 12,825 | * | ||||||||||||
Michael Falvey(5) | 56,875 | * | ||||||||||||
Guy Goodwin(6) | 3,750 | * | ||||||||||||
Ekaterina Malievskaia(3) | 4,371,525 | 9.62% | ||||||||||||
Matthew Owens(7) | 40,063 | * | ||||||||||||
Annalisa Jenkins(8) | 138,217 | * | ||||||||||||
Thomas Lönngren(9) | 151,970 | * | ||||||||||||
David Norton(10) | 153,147 | * | ||||||||||||
Linda McGoldrick(11) | 26,389 | * | ||||||||||||
Robert McQuade(12) | 1,620,167 | 3.57% | ||||||||||||
Wayne Riley(13) | 13,000 | * | ||||||||||||
All Current Executive Officers and Directors as a Group (12 persons)(14) | 11,072,004 | 23.99% |
Ordinary Shares Beneficially Owned | ||||||||||||||
Name of Beneficial Owner | Number | Percent | ||||||||||||
Greater than 5% Shareholders | ||||||||||||||
ATAI Life Sciences AG(1) | 9,435,758 | 13.81% | ||||||||||||
Entities affiliated with TCG Crossover GP I, LLC(2) | 6,834,253 | 9.99% | ||||||||||||
George Goldsmith(3) | 4,329,763 | 6.31% | ||||||||||||
Ekaterina Malievskaia(4) | 4,227,648 | 6.17% | ||||||||||||
Named Executive Officers and Directors | ||||||||||||||
Kabir Nath(5) | 325,128 | * | ||||||||||||
Michael Falvey | 3,956 | * | ||||||||||||
Guy Goodwin(6) | 126,658 | * | ||||||||||||
Ekaterina Malievskaia(4) | 4,227,648 | 6.17% | ||||||||||||
Matthew Owens(7) | 85,006 | * | ||||||||||||
Annalisa Jenkins(8) | 192,044 | * | ||||||||||||
Daphne Karydas(9) | 11,556 | * | ||||||||||||
Thomas Lönngren(10) | 202,345 | * | ||||||||||||
Linda McGoldrick(11) | 74,785 | * | ||||||||||||
Robert McQuade(12) | 1,668,563 | 2.44% | ||||||||||||
David Norton(13) | 207,478 | * | ||||||||||||
Wayne Riley(14) | 65,750 | * | ||||||||||||
All Current Executive Officers and Directors as a Group (11 persons)(15) | 2,959,313 | 4.25% |
Purpose and link to strategy | |||||
Salary | Provides market competitive fixed remuneration that reflects the responsibilities of the role undertaken, the experience of the individual and performance in the role over time. | ||||
Benefits | Provides market competitive, yet cost-effective employment benefits. | ||||
Annual bonus | To incentivise and award delivery of the Company's strategy and corporate objectives on an annual basis. | ||||
To align the interests of Executive Directors and management with long-term shareholder interests and to attract, incentivise and retain staff. To incentivise and recognise achievement of longer term corporate objectives and sustained shareholder value creation. To effectively manage the Group's cash resources. | |||||
To provide a competitive and tax-efficient pension or retirement savings plan which complies with at least the minimum contributions requirements of the applicable jurisdiction. |
Operation | |||||
Salary | Reviewed annually taking into account individual responsibilities, experience, performance, inflation and market rates. The Committee will also consider the pay and employment conditions in the wider workforce when determining Executive Directors’ salaries. Where there has been a change in role, or the individual is new to the role, increases could be higher. Salary increases are normally effective from 1 January each year. Salaries are periodically benchmarked against a relevant peer group of biotech companies, most of which are listed on Nasdaq, with others listed on European stock exchanges, with a similar stage of clinical development, and similar market capitalisation or net assets. | ||||
Benefits | For Executive Directors this includes private medical insurance, life insurance and | ||||
Annual bonus | Annual bonus performance targets are set at the start of the year by the Board and performance against objectives is assessed by the Compensation and Leadership Development Committee after the end of the relevant financial year. Bonuses | ||||
Long-term equity incentive awards are granted annually under the 2020 Plan. The awards have time-based vesting conditions and vest over a period of at least three years and may include a mix of share options, restricted share units, performance shares and other awards available for issuance under the 2020 Plan. Awards vest in accordance with the vesting schedule set for the relevant award in its equity agreement. Executive Directors are eligible to participate in the SIP and ESPP under the same conditions as other employees. The SIP and ESPP generally allow employees to save a portion (up to a specified maximum) of their salary over a six-month savings period and at the end of the savings period, shares will automatically be purchased at the lower of the opening and closing price of the shares for the saving period minus a 15% discount in the case of the ESPP and plus issuance of matching shares equal to 15% of the investment for the SIP. The Committee maintains discretion over the types and terms of equity awards granted. | |||||
Pension/401(k) | Executive Directors are eligible to join a defined contribution pension |
Maximum potential value | |||||
Salary | The current base salary of the Executive | ||||
Benefits | The value of each benefit is not predetermined and is typically based upon the cost to the Company of providing said benefit which will vary from year to year based on the cost from third-party providers. If an Executive Director is based outside the UK additional benefits and assistance with relocation may be provided which reflect local market norms or legislation, including without limitation relocation bonus, housing allowance, and tax advisory and preparation services. Any reasonable business-related expenses can be reimbursed, including tax there-on. | ||||
Annual bonus | The maximum payable to an Executive Director is | ||||
The Company initially reserved 2,074,325 of its ordinary shares for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each 1 January, beginning on 1 January 2022, by up to 4% of the outstanding number of ordinary shares on the immediately preceding 31 December, or such lesser number of shares as determined by our Compensation and Leadership Development Committee. This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalisation. The total number of ordinary shares that may be issued under the 2020 Plan was During the years ended 31 December | |||||
Pension/401(k) | For the pension, the maximum contribution, cash supplement (or combination thereof) payable by the Company is |
Performance metrics | |||||
Salary | The overall performance of the individual and Company, including against individual performance objectives, is a key determinant for salary increases. | ||||
Benefits | None. | ||||
Annual bonus | Operational targets related to research and development, business development, financial goals and | ||||
Vesting may be on a time-phased basis or subject to performance conditions, as determined at the discretion of the Committee. During the years ended 31 December | |||||
Pension/401(k) | None. |
Remuneration Element | Purpose and link to strategy | Operation and Maximum | Performance Related | ||||||||
Chair’s fee | To attract and retain a high calibre individual with the requisite experience and knowledge. | The | No | ||||||||
Non-Executive Director fee | To attract and retain high calibre individuals with the requisite experience and knowledge. | The current fee levels are set out in the Non- Executive Director cash fees section of the Remuneration Report. Fees are reviewed on a periodic basis against those in public biotechnology companies that are similar | No | ||||||||
Non-Executive Director long-term incentive awards | To provide alignment with the interest of shareholders. | The Company has historically awarded share options, and in some cases restricted share units, to all employees and Notwithstanding anything to the contrary in the 2020 Plan, the value of all Awards awarded under this Plan and all other cash compensation paid by the Company to any Non-Employee Director in any calendar year for services as a Non-Employee Director shall not exceed vesting provisions. | No |
Base Salary | Bonus | Share-based payments | Other* | Total variable remuneration | Total fixed remuneration | Total remuneration | ||||||||||||||||||||
US $ | US $ | US $ | US $ | US $ | US $ | US $ | ||||||||||||||||||||
Kabir Nath | 2022 | 243,123 | 145,000 | — | — | 145,000 | 243,123 | 388,123 | ||||||||||||||||||
2021 | — | — | — | — | — | — | — | |||||||||||||||||||
George Goldsmith (Executive Chairman) | 2022 | 179,843 | 123,642 | 37,355 | 17,994 | 123,642 | 235,192 | 358,834 | ||||||||||||||||||
George Goldsmith (CEO) | 2022 | 311,494 | 171,321 | 52,296 | 22,076 | 171,321 | 385,866 | 557,187 | ||||||||||||||||||
2021 | 584,658 | 321,562 | 846,545 | 37,304 | 321,562 | 1,468,507 | 1,790,069 | |||||||||||||||||||
Ekaterina Malievskaia | 2022 | 378,563 | 163,549 | 89,651 | 25,802 | 163,549 | 494,016 | 657,565 | ||||||||||||||||||
2021 | 412,700 | 231,800 | 739,056 | 24,635 | 231,800 | 1,176,391 | 1,408,191 | |||||||||||||||||||
David Norton | 2022 | 60,620 | — | 20,426 | — | — | 81,046 | 81,046 | ||||||||||||||||||
2021 | 62,249 | — | 265,031 | — | — | 327,280 | 327,280 | |||||||||||||||||||
Florian Brand | 2022 | — | — | — | — | — | — | — | ||||||||||||||||||
2021 | 13,119 | — | — | — | — | 13,119 | 13,119 | |||||||||||||||||||
Jason Camm | 2022 | — | — | — | — | — | — | — | ||||||||||||||||||
2021 | — | — | — | — | — | — | — | |||||||||||||||||||
Annalisa Jenkins | 2022 | 59,382 | — | 47,601 | — | — | 106,983 | 106,983 | ||||||||||||||||||
2021 | 66,032 | — | 302,913 | — | — | 368,945 | 368,945 | |||||||||||||||||||
Thomas Lonngren | 2022 | 45,692 | — | 47,601 | — | — | 93,293 | 93,293 | ||||||||||||||||||
2021 | 49,535 | — | 258,663 | — | — | 308,198 | 308,198 | |||||||||||||||||||
Robert McQuade | 2022 | 54,434 | — | — | — | — | 54,434 | 54,434 | ||||||||||||||||||
2021 | 60,529 | — | — | — | — | 60,529 | 60,529 | |||||||||||||||||||
Linda McGoldrick | 2022 | 56,290 | — | — | — | — | 56,290 | 56,290 | ||||||||||||||||||
2021 | 62,077 | — | 81,691 | — | — | 143,768 | 143,768 | |||||||||||||||||||
Wayne Riley | 2022 | 46,393 | — | — | — | — | 46,393 | 46,393 | ||||||||||||||||||
2021 | 38,531 | — | — | — | — | 38,531 | 38,531 | |||||||||||||||||||
Total | 2022 | 1,435,834 | 603,512 | 294,930 | 65,872 | 603,512 | 1,796,636 | 2,400,148 | ||||||||||||||||||
2021 | 1,349,430 | 553,362 | 2,493,899 | 61,939 | 553,362 | 3,905,268 | 4,458,630 |
Base Salary | Bonus | Long-term Incentive Awards* | Other** | Total variable*** remuneration | Total fixed*** remuneration | Total remuneration | ||||||||||||||||||||
US $ | US $ | US $ | US $ | US $ | US $ | US $ | ||||||||||||||||||||
Kabir Nath | 2023 | 594,500 | 338,900 | 109,375 | 376,155 | 448,275 | 970,655 | 1,418,930 | ||||||||||||||||||
2022 | 243,123 | 145,000 | — | — | 145,000 | 243,123 | 388,123 | |||||||||||||||||||
George Goldsmith (Non-Executive Director)1 | 2023 | 99,495 | — | 161,128 | — | 161,128 | 99,495 | 260,623 | ||||||||||||||||||
2022 | — | — | — | — | — | — | — | |||||||||||||||||||
George Goldsmith (Executive Chair) | 2023 | — | — | — | — | — | — | — | ||||||||||||||||||
2022 | 179,843 | 123,642 | 37,355 | 17,994 | 160,997 | 197,837 | 358,834 | |||||||||||||||||||
George Goldsmith (CEO) | 2023 | — | — | — | — | — | — | — | ||||||||||||||||||
2022 | 311,494 | 171,321 | 52,296 | 22,076 | 223,617 | 333,570 | 557,187 | |||||||||||||||||||
Ekaterina Malievskaia (Non-Executive Director)2 | 2023 | 24,827 | — | — | — | — | 24,827 | 24,827 | ||||||||||||||||||
2022 | — | — | — | — | — | — | — | |||||||||||||||||||
Ekaterina Malievskaia (Former Chief Innovation Officer) | 2023 | 175,166 | — | 126,128 | — | 126,128 | 175,166 | 301,294 | ||||||||||||||||||
2022 | 378,563 | 163,549 | 89,651 | 25,802 | 253,200 | 404,365 | 657,565 | |||||||||||||||||||
David Norton | 2023 | 63,892 | — | 51,874 | — | 51,874 | 63,892 | 115,766 | ||||||||||||||||||
2022 | 60,620 | — | 20,426 | — | 20,426 | 60,620 | 81,046 | |||||||||||||||||||
Annalisa Jenkins | 2023 | 63,102 | — | 51,874 | — | 51,874 | 63,102 | 114,976 | ||||||||||||||||||
2022 | 59,382 | — | 47,601 | — | 47,601 | 59,382 | 106,983 | |||||||||||||||||||
Daphne Karydas3 | 2023 | 13,846 | — | — | — | — | 13,846 | 13,846 | ||||||||||||||||||
2022 | — | — | — | — | — | — | — | |||||||||||||||||||
Thomas Lonngren | 2023 | 48,145 | — | 38,905 | — | 38,905 | 48,145 | 87,050 | ||||||||||||||||||
2022 | 45,692 | — | 47,601 | — | 47,601 | 45,692 | 93,293 | |||||||||||||||||||
Robert McQuade | 2023 | 57,801 | — | — | — | — | 57,801 | 57,801 | ||||||||||||||||||
2022 | 54,434 | — | — | — | — | 54,434 | 54,434 | |||||||||||||||||||
Linda McGoldrick | 2023 | 59,162 | — | — | — | — | 59,162 | 59,162 | ||||||||||||||||||
2022 | 56,290 | — | — | — | — | 56,290 | 56,290 | |||||||||||||||||||
Wayne Riley | 2023 | 49,183 | — | — | — | — | 49,183 | 49,183 | ||||||||||||||||||
2022 | 46,393 | — | — | — | — | 46,393 | 46,393 | |||||||||||||||||||
Total | 2023 | 1,249,119 | 338,900 | 539,284 | 376,155 | 878,184 | 1,625,274 | 2,503,458 | ||||||||||||||||||
2022 | 1,435,834 | 603,512 | 294,930 | 65,872 | 898,442 | 1,501,706 | 2,400,148 |
2023 | Chief Executive Officer | Chairman | Chief Innovation Officer | ||||||||
US $ | US $ | US $ | |||||||||
Base salary | 594,500 | 96,824 | 370,352 | ||||||||
Benefits | — | 40,070 | 25,802 | ||||||||
Fair value of restricted share units (granted on 2 February 2023) | 273,420 | — | 126,945 | ||||||||
Base case | 867,920 | 136,894 | 523,099 | ||||||||
Expected bonus (assumed at 100% of target) | 356,700 | — | 166,658 | ||||||||
Expected case | 1,224,620 | 136,894 | 689,757 | ||||||||
Maximum bonus (paid at 125% of target) | 445,875 | — | 208,323 | ||||||||
Maximum bonus case | 1,313,795 | 136,894 | 731,422 |
2024 | Chief Executive Officer | ||||
US $ | |||||
Base salary | 627,200 | ||||
Benefits* | 29,673 | ||||
Fair value of restricted share units (granted on 1 February 2024) | 1,043,280 | ||||
Base case | 1,700,153 | ||||
Expected bonus (assumed at 100% of target) | 376,320 | ||||
Expected case | 2,076,473 | ||||
Maximum bonus (assumed at 100% of base salary) | 627,200 | ||||
Maximum bonus case | 2,327,353 |
Shares | Share options | RSUs | |||||||||||||||||||||
2021 | Beneficially owned shares at 31 December 2021 | Total share options at 31 December 2021 | Unvested without performance conditions | Vested but unexercised | Total RSUs at 31 December 2021 | Unvested without performance conditions | Vested but unexercised | ||||||||||||||||
Executive Directors | |||||||||||||||||||||||
George Goldsmith | 4,318,572 | 113,600 | 78,100 | 35,500 | 44,710 | 30,739 | — | ||||||||||||||||
Ekaterina Malievskaia | 4,308,510 | 85,200 | 58,575 | 26,625 | 44,710 | 30,739 | — | ||||||||||||||||
Non-Executive Directors | |||||||||||||||||||||||
David Norton | 127,984 | 147,404 | 26,839 | 120,565 | 23,740 | 16,321 | — | ||||||||||||||||
Florian Brand | — | 5,396 | — | 5,396 | — | — | — | ||||||||||||||||
Jason Camm | — | — | — | — | — | — | — | ||||||||||||||||
Annalisa Jenkins | 113,054 | 132,474 | 26,839 | 105,635 | 23,740 | 16,321 | — | ||||||||||||||||
Thomas Lonngren | 123,919 | 72,095 | 37,225 | 34,870 | — | — | — | ||||||||||||||||
Robert McQuade | 1,600,523* | 33,584 | 27,738 | 5,846 | — | — | — | ||||||||||||||||
Linda McGoldrick | 6,745 | 33,584 | 26,839 | 6,745 | — | — | — | ||||||||||||||||
Wayne Riley | — | 24,000 | 24,000 | — | — | — | — |
Shares | Share options | RSUs | |||||||||||||||||||||
2022 | Beneficially owned shares at 31 December 2022 | Total share options at 31 December 2022 | Unvested without performance conditions | Vested but unexercised | Total RSUs at 31 December 2022 | Unvested without performance conditions | |||||||||||||||||
Executive Directors | |||||||||||||||||||||||
Kabir Nath | — | 600,000 | 600,000 | — | 50,000 | 50,000 | |||||||||||||||||
George Goldsmith | 4,397,499 | 286,600 | 186,658 | 99,942 | 73,710 | 48,561 | |||||||||||||||||
Ekaterina Malievskaia | 4,349,794 | 160,200 | 96,650 | 63,550 | 57,710 | 32,561 | |||||||||||||||||
Non-Executive Directors | |||||||||||||||||||||||
David Norton | 150,314 | 164,404 | 26,443 | 137,961 | 23,740 | 10,386 | |||||||||||||||||
Annalisa Jenkins | 135,384 | 149,474 | 26,443 | 123,031 | 23,740 | 10,386 | |||||||||||||||||
Thomas Lonngren | 149,137 | 89,095 | 30,894 | 58,201 | — | — | |||||||||||||||||
Robert McQuade | 1,618,818* | 50,584 | 27,342 | 23,242 | — | — | |||||||||||||||||
Linda McGoldrick | 25,040 | 50,584 | 26,443 | 24,141 | — | — | |||||||||||||||||
Wayne Riley | 11,500 | 45,250 | 34,750 | 10,500 | — | — |
Shares | Share options | RSUs | ||||||||||||||||||||||||
2022 | Beneficially owned shares at 31 December 2022 | Total share options at 31 December 2022 | Unvested without performance conditions | Vested but unexercised | Total RSUs at 31 December 2022 | Unvested without performance conditions | Vested but unexercised | |||||||||||||||||||
Executive Directors | ||||||||||||||||||||||||||
Kabir Nath | — | 600,000 | 600,000 | — | 50,000 | 50,000 | — | |||||||||||||||||||
George Goldsmith | 4,397,499 | 286,600 | 186,658 | 99,942 | 73,710 | 48,561 | — | |||||||||||||||||||
Ekaterina Malievskaia | 4,349,794 | 160,200 | 96,650 | 63,550 | 57,710 | 32,561 | — | |||||||||||||||||||
Non-Executive Directors | ||||||||||||||||||||||||||
David Norton | 150,314 | 164,404 | 26,443 | 137,961 | 23,740 | 10,386 | — | |||||||||||||||||||
Annalisa Jenkins | 135,384 | 149,474 | 26,443 | 123,031 | 23,740 | 10,386 | — | |||||||||||||||||||
Thomas Lonngren | 149,137 | 89,095 | 30,894 | 58,201 | — | — | — | |||||||||||||||||||
Robert McQuade | 1,618,818* | 50,584 | 27,342 | 23,242 | — | — | — | |||||||||||||||||||
Linda McGoldrick | 25,040 | 50,584 | 26,443 | 24,141 | — | — | — | |||||||||||||||||||
Wayne Riley | 11,500 | 45,250 | 34,750 | 10,500 | — | — | — |
Shares | Share options | RSUs | |||||||||||||||||||||
2023 | Beneficially owned shares at 31 December 2023 | Total share options at 31 December 2023 | Unvested without performance conditions | Vested but unexercised | Total RSUs at 31 December 2023 | Unvested without performance conditions | |||||||||||||||||
Executive Directors | |||||||||||||||||||||||
Kabir Nath | 276,481 | 753,900 | 521,838 | 232,063 | 75,200 | 62,700 | |||||||||||||||||
Non-Executive Directors | |||||||||||||||||||||||
George Goldsmith | 4,474,021 | 325,600 | 154,008 | 171,592 | 73,710 | 30,134 | |||||||||||||||||
Ekaterina Malievskaia | 4,414,204 | 227,700 | 110,038 | 117,663 | 69,410 | 29,834 | |||||||||||||||||
David Norton | 178,645 | 190,404 | 30,047 | 160,357 | 23,740 | 4,451 | |||||||||||||||||
Annalisa Jenkins | 163,386 | 175,474 | 30,047 | 145,427 | 23,740 | 4,451 | |||||||||||||||||
Daphne Karydas | 7,222 | 52,000 | 47,667 | 4,333 | — | — | |||||||||||||||||
Thomas Lonngren | 174,996 | 115,095 | 30,047 | 85,048 | — | — | |||||||||||||||||
Robert McQuade | 1,641,214 | 76,584 | 30,946 | 45,638 | — | — | |||||||||||||||||
Linda McGoldrick | 47,436 | 76,584 | 30,047 | 46,537 | — | — | |||||||||||||||||
Wayne Riley | 38,750 | 71,250 | 33,500 | 37,750 | — | — |
Director | Date of grant | Price per Share ($) | Type | 01/01/2022 | Granted during the year | Exercised during the year | Vested in year | Cancelled during the period | 31/12/2022 | Date from which exercisable | Expiry date | |||||||||||||||||||||||||||
Kabir Nath | 01/08/2022 | 14.94 | Option | — | 600,000 | — | — | — | 600,000 | 01/08/2022 | 31/07/2032 | |||||||||||||||||||||||||||
01/08/2022 | 0.01 | RSU | — | 50,000 | — | — | — | 50,000 | 01/08/2022 | 01/08/2026 | ||||||||||||||||||||||||||||
George Goldsmith | 18/09/2020 | 16.85 | Option | 113,600 | — | — | 28,400 | — | 113,600 | 18/09/2020 | 18/09/2030 | |||||||||||||||||||||||||||
01/02/2022 | 15.75 | Option | — | 173,000 | — | 36,042 | — | 173,000 | 01/02/2022 | 31/01/2032 | ||||||||||||||||||||||||||||
30/06/2020 | 0.01 | RSU | 30,739 | — | — | 11,178 | — | 19,561 | 12/08/2020 | 01/08/2024 | ||||||||||||||||||||||||||||
01/02/2022 | 0.01 | RSU | — | 29,000 | — | — | — | 29,000 | 01/02/2022 | 01/02/2026 | ||||||||||||||||||||||||||||
Ekaterina Malievskaia | 18/09/2020 | 16.85 | Option | 85,200 | — | — | 21,300 | — | 85,200 | 18/09/2020 | 18/09/2030 | |||||||||||||||||||||||||||
01/02/2022 | 15.75 | Option | — | 75,000 | — | 15,625 | — | 75,000 | 01/02/2022 | 31/01/2032 | ||||||||||||||||||||||||||||
30/06/2020 | 0.01 | RSU | 30,739 | — | — | 11,178 | — | 19,561 | 12/08/2020 | 01/08/2024 | ||||||||||||||||||||||||||||
01/02/2022 | 0.01 | RSU | — | 13,000 | — | — | — | 13,000 | 01/02/2022 | 01/02/2026 | ||||||||||||||||||||||||||||
David Norton | 20/07/2019 | 1.40 | Option | 99,049 | — | — | — | — | 99,049 | 05/05/2018 | 20/07/2029 | |||||||||||||||||||||||||||
30/03/2020 | 2.40 | Option | 14,771 | — | — | — | — | 14,771 | 05/05/2018 | 30/03/2030 | ||||||||||||||||||||||||||||
18/09/2020 | 16.85 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 18/09/2020 | 18/09/2030 | ||||||||||||||||||||||||||||
01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | ||||||||||||||||||||||||||||
16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | ||||||||||||||||||||||||||||
30/06/2020 | 0.01 | RSU | 16,321 | — | — | 5,935 | — | 10,386 | 12/08/2020 | 01/08/2024 | ||||||||||||||||||||||||||||
Annalisa Jenkins | 20/07/2019 | 1.40 | Option | 84,119 | — | — | — | — | 84,119 | 01/06/2018 | 20/07/2029 | |||||||||||||||||||||||||||
30/03/2020 | 2.40 | Option | 14,771 | — | — | — | — | 14,771 | 01/06/2018 | 30/03/2030 | ||||||||||||||||||||||||||||
18/09/2020 | 16.85 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 18/09/2020 | 18/09/2030 | ||||||||||||||||||||||||||||
01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | ||||||||||||||||||||||||||||
16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | ||||||||||||||||||||||||||||
30/06/2020 | 0.01 | RSU | 16,321 | — | — | 5,935 | — | 10,386 | 12/08/2020 | 01/08/2024 | ||||||||||||||||||||||||||||
Thomas Lonngren | 30/03/2020 | 0.01 | Option | 14,771 | — | — | — | — | 14,771 | 18/05/2018 | 30/03/2030 | |||||||||||||||||||||||||||
30/06/2020 | 0.01 | Option | 23,740 | — | — | 5,935 | — | 23,740 | 30/06/2020 | 30/06/2030 | ||||||||||||||||||||||||||||
18/09/2020 | 16.85 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 18/09/2020 | 18/09/2030 | ||||||||||||||||||||||||||||
01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | ||||||||||||||||||||||||||||
16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | ||||||||||||||||||||||||||||
Robert McQuade | 23/11/2020 | 32.66 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 23/11/2020 | 22/11/2030 | |||||||||||||||||||||||||||
01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | ||||||||||||||||||||||||||||
16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | ||||||||||||||||||||||||||||
Linda McGoldrick | 18/09/2020 | 17.05 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 18/09/2020 | 18/09/2030 | |||||||||||||||||||||||||||
01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | ||||||||||||||||||||||||||||
16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | ||||||||||||||||||||||||||||
Wayne Riley | 31/03/2021 | 35.25 | Option | 24,000 | — | — | 10,500 | — | 24,000 | 31/03/2021 | 30/03/2031 | |||||||||||||||||||||||||||
16/06/2022 | 9.44 | Option | — | 21,250 | — | — | — | 21,250 | 16/06/2022 | 15/06/2032 |
Director | Date of grant | Price per Share ($) | Type | As at 01/01/2023 | Granted during the year | Exercised during the year | Vested in year | Cancelled during the year | As at 12/31/2023 | Date from which exercisable | Expiry date | ||||||||||||||||||||||||
Kabir Nath | 01/08/2022 | 14.94 | Option | 600,000 | — | — | 200,000 | — | 600,000 | 01/08/2022 | 31/07/2032 | ||||||||||||||||||||||||
02/02/2023 | 10.85 | Option | — | 153,900 | — | 32,062 | — | 153,900 | 02/02/2023 | 01/02/2033 | |||||||||||||||||||||||||
01/08/2022 | N/A(2) | RSU | 50,000 | — | — | 12,500 | — | 37,500 | 01/08/2022 | N/A | |||||||||||||||||||||||||
02/02/2023 | N/A | RSU | — | 25,200 | — | — | — | 25,200 | 02/02/2023 | N/A | |||||||||||||||||||||||||
George Goldsmith | 18/09/2020 | 17.00(1) | Option | 113,600 | — | — | 28,400 | — | 113,600 | 18/09/2020 | 18/09/2030 | ||||||||||||||||||||||||
01/02/2022 | 15.75 | Option | 173,000 | — | — | 43,249 | — | 173,000 | 01/02/2022 | 31/01/2032 | |||||||||||||||||||||||||
02/06/2023 | 7.88 | Option | — | 39,000 | — | — | — | 39,000 | 02/06/2023 | 01/06/2033 | |||||||||||||||||||||||||
30/06/2020 | N/A(2) | RSU | 19,561 | — | — | 11,177 | — | 8,384 | 12/08/2020 | N/A | |||||||||||||||||||||||||
01/02/2022 | N/A(2) | RSU | 29,000 | — | — | 7,250 | — | 21,750 | 01/02/2022 | N/A | |||||||||||||||||||||||||
Ekaterina Malievskaia | 18/09/2020 | 17.00(1) | Option | 85,200 | — | — | 21,300 | — | 85,200 | 18/09/2020 | 18/09/2030 | ||||||||||||||||||||||||
01/02/2022 | 15.75 | Option | 75,000 | — | — | 18,750 | — | 75,000 | 01/02/2022 | 31/01/2032 | |||||||||||||||||||||||||
02/02/2023 | 10.85 | Option | — | 67,500 | — | 14,061 | — | 67,500 | 02/02/2023 | 01/02/2033 | |||||||||||||||||||||||||
30/06/2020 | N/A(2) | RSU | 19,561 | — | — | 11,177 | — | 8,384 | 12/08/2020 | N/A | |||||||||||||||||||||||||
01/02/2022 | N/A(2) | RSU | 13,000 | — | — | 3,250 | — | 9,750 | 01/02/2022 | N/A | |||||||||||||||||||||||||
02/02/2023 | N/A | RSU | — | 11,700 | — | — | — | 11,700 | 02/02/2023 | N/A | |||||||||||||||||||||||||
David Norton | 20/07/2019 | 1.32(3) | Option | 99,049 | — | — | — | — | 99,049 | 05/05/2018 | 20/07/2029 | ||||||||||||||||||||||||
30/03/2020 | 2.26(4) | Option | 14,771 | — | — | — | — | 14,771 | 05/05/2018 | 30/03/2030 | |||||||||||||||||||||||||
18/09/2020 | 17.00(1) | Option | 21,584 | — | — | 5,396 | — | 21,584 | 18/09/2020 | 18/09/2030 | |||||||||||||||||||||||||
01/10/2021 | 29.87 | Option | 12,000 | — | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | |||||||||||||||||||||||||
16/06/2022 | 9.41(5) | Option | 17,000 | — | — | 17,000 | — | 17,000 | 16/06/2022 | 15/06/2032 | |||||||||||||||||||||||||
02/06/2023 | 7.88 | Option | — | 26,000 | — | — | — | 26,000 | 02/06/2023 | 01/06/2033 | |||||||||||||||||||||||||
30/06/2020 | N/A(2) | RSU | 10,386 | — | — | 5,935 | — | 4,451 | 12/08/2020 | N/A | |||||||||||||||||||||||||
Annalisa Jenkins | 20/07/2019 | 1.32(3) | Option | 84,119 | — | — | — | — | 84,119 | 01/06/2018 | 20/07/2029 | ||||||||||||||||||||||||
30/03/2020 | 2.26(4) | Option | 14,771 | — | — | — | — | 14,771 | 01/06/2018 | 30/03/2030 | |||||||||||||||||||||||||
18/09/2020 | 17.00(1) | Option | 21,584 | — | — | 5,396 | — | 21,584 | 18/09/2020 | 18/09/2030 | |||||||||||||||||||||||||
01/10/2021 | 29.87 | Option | 12,000 | — | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | |||||||||||||||||||||||||
16/06/2022 | 9.41(5) | Option | 17,000 | — | — | 17,000 | — | 17,000 | 16/06/2022 | 15/06/2032 | |||||||||||||||||||||||||
02/06/2023 | 7.88 | Option | — | 26,000 | — | — | — | 26,000 | 02/06/2023 | 01/06/2033 | |||||||||||||||||||||||||
30/06/2020 | N/A(2) | RSU | 10,386 | — | — | 5,935 | — | 4,451 | 12/08/2020 | N/A | |||||||||||||||||||||||||
Thomas Lonngren | 30/03/2020 | 0.01 | Option | 14,771 | — | — | — | — | 14,771 | 18/05/2018 | 30/03/2030 | ||||||||||||||||||||||||
30/06/2020 | 0.01 | Option | 23,740 | — | — | 4,452 | — | 23,740 | 30/06/2020 | 30/06/2030 | |||||||||||||||||||||||||
18/09/2020 | 17.00(1) | Option | 21,584 | — | — | 5,396 | — | 21,584 | 18/09/2020 | 18/09/2030 | |||||||||||||||||||||||||
01/10/2021 | 29.87 | Option | 12,000 | — | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | |||||||||||||||||||||||||
16/06/2022 | 9.41(5) | Option | 17,000 | — | — | 17,000 | — | 17,000 | 16/06/2022 | 15/06/2032 | |||||||||||||||||||||||||
02/06/2023 | 7.88 | Option | — | 26,000 | — | — | — | 26,000 | 02/06/2023 | 01/06/2033 | |||||||||||||||||||||||||
Robert McQuade | 23/11/2020 | 33.83 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 23/11/2020 | 22/11/2030 | ||||||||||||||||||||||||
01/10/2021 | 29.87 | Option | 12,000 | — | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | |||||||||||||||||||||||||
16/06/2022 | 9.41(5) | Option | 17,000 | — | — | 17,000 | — | 17,000 | 16/06/2022 | 15/06/2032 | |||||||||||||||||||||||||
02/06/2023 | 7.88 | Option | — | 26,000 | — | — | — | 26,000 | 02/06/2023 | 01/06/2033 | |||||||||||||||||||||||||
Linda McGoldrick | 18/09/2020 | 17.00(1) | Option | 21,584 | — | — | 5,396 | — | 21,584 | 18/09/2020 | 18/09/2030 | ||||||||||||||||||||||||
01/10/2021 | 29.87 | Option | 12,000 | — | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | |||||||||||||||||||||||||
16/06/2022 | 9.41(5) | Option | 17,000 | — | — | 17,000 | — | 17,000 | 16/06/2022 | 15/06/2032 | |||||||||||||||||||||||||
02/06/2023 | 7.88 | Option | — | 26,000 | — | — | — | 26,000 | 02/06/2023 | 01/06/2033 | |||||||||||||||||||||||||
Wayne Riley | 31/03/2021 | 35.30 | Option | 24,000 | — | — | 6,000 | — | 24,000 | 31/03/2021 | 30/03/2031 | ||||||||||||||||||||||||
16/06/2022 | 9.41(5) | Option | 21,250 | — | — | 21,250 | — | 21,250 | 16/06/2022 | 15/06/2032 | |||||||||||||||||||||||||
02/06/2023 | 7.88 | Option | — | 26,000 | — | — | — | 26,000 | 02/06/2023 | 01/06/2033 | |||||||||||||||||||||||||
Daphne Karydas | 18/09/2023 | 9.07 | Option | — | 52,000 | — | 4,333 | — | 52,000 | 18/09/2023 | 17/09/2033 |
NAME OF BENEFICIAL OWNER | ORDINARY SHARES BENEFICIALLY OWNED AT 31 DECEMBER 2022 | |||||||
NUMBER | PERCENT | |||||||
Directors | ||||||||
George Goldsmith | 4,397,499 | 10.3% | ||||||
Ekaterina Malievskaia | 4,349,794 | 10.2% | ||||||
Non-Executive Directors | ||||||||
David Norton | 150,314 | * | ||||||
Annalisa Jenkins | 135,384 | * | ||||||
Thomas Lonngren | 149,137 | * | ||||||
Robert McQuade | 1,618,818** | 3.8% | ||||||
Linda McGoldrick | 25,040 | * | ||||||
Wayne Riley | 11,500 | * |
NAME OF BENEFICIAL OWNER | ORDINARY SHARES BENEFICIALLY OWNED AT 31 DECEMBER 2023 | |||||||
NUMBER | PERCENT | |||||||
Executive Directors | ||||||||
Kabir Nath | 276,481 | * | ||||||
Non-Executive Directors | ||||||||
George Goldsmith*** | 4,474,021 | 7.2% | ||||||
Annalisa Jenkins | 163,386 | * | ||||||
Daphne Karydas | 7,222 | * | ||||||
Thomas Lonngren | 174,996 | * | ||||||
Ekaterina Malievskaia*** | 4,414,204 | 7.1% | ||||||
Linda McGoldrick | 47,436 | * | ||||||
Robert McQuade** | 1,641,214 | 2.7% | ||||||
David Norton | 178,645 | * | ||||||
Wayne Riley | 38,750 | * |
Change in pay between 31 December 2021 and 31 December 2020 | |||||||||||
Salary | Annual Bonus | Benefits | |||||||||
CEO % change | 29 | % | 37 | % | 9 | % | |||||
CIO % change | 14 | % | 54 | % | 4 | % | |||||
David Norton | 288 | % | n/a | n/a | |||||||
Jason Camm | n/a | n/a | n/a | ||||||||
Annalisa Jenkins | 277 | % | n/a | n/a | |||||||
Thomas Lonngren | 277 | % | n/a | n/a | |||||||
Robert McQuade | 277 | % | n/a | n/a | |||||||
Linda McGoldrick | 278 | % | n/a | n/a | |||||||
Wayne Riley | n/a | n/a | n/a | ||||||||
Employees % change | 17 | % | 29 | % | 36 | % | |||||
Change in pay between 31 December 2022 and 31 December 2021 | |||||||||||
Salary | Annual Bonus (1) | Benefits (1) | |||||||||
CEO % change * | (1) % | 6 % | (100) % | ||||||||
CEO % change ** | (8) % | (2) % | 7 % | ||||||||
Executive Chair % change | 100 % | 100 % | 100 % | ||||||||
CIO % change | (8) % | (29) % | 5 % | ||||||||
David Norton | (3) % | n/a | n/a | ||||||||
Annalisa Jenkins | (10) % | n/a | n/a | ||||||||
Thomas Lonngren | (8) % | n/a | n/a | ||||||||
Robert McQuade | (10) % | n/a | n/a | ||||||||
Linda McGoldrick | (9) % | n/a | n/a | ||||||||
Wayne Riley | 20 % | n/a | n/a | ||||||||
Employees % change | (37) % | (27) % | (19) % |
Change in pay between 31 December 2022 and 31 December 2021 | ||||||||||||||||||||
Salary | Annual Bonus (1) | Benefits (1) | ||||||||||||||||||
CEO % change (2)* | (1) | % | 6 | % | (100) | % | ||||||||||||||
CEO % change (2)** | (8) | % | (2) | % | 7 | % | ||||||||||||||
Executive Chairman % change (2) | 100 | % | 100 | % | 100 | % | ||||||||||||||
CIO % change | (8) | % | (29) | % | 5 | % | ||||||||||||||
David Norton | (3) | % | n/a | n/a | ||||||||||||||||
Annalisa Jenkins | (10) | % | n/a | n/a | ||||||||||||||||
Thomas Lonngren | (8) | % | n/a | n/a | ||||||||||||||||
Robert McQuade | (10) | % | n/a | n/a | ||||||||||||||||
Linda McGoldrick | (9) | % | n/a | n/a | ||||||||||||||||
Wayne Riley (3) | 20 | % | n/a | n/a | ||||||||||||||||
Employees % change | (37) | % | (27) | % | (19) | % |
Change in pay between 31 December 2023 and 31 December 2022 | ||||||||||||||||||||
Salary | Annual Bonus (1) | Benefits (1) | ||||||||||||||||||
CEO % change (2)* | 3 % | (1) % | 100 % | |||||||||||||||||
Executive Chair % change (3)** | (100) % | (100) % | (100) % | |||||||||||||||||
CIO % change (4)*** | (19) % | (100) % | (100) % | |||||||||||||||||
George Goldsmith (3) | 100 % | n/a | n/a | |||||||||||||||||
Ekaterina Malievskaia (4) | 100 % | n/a | n/a | |||||||||||||||||
David Norton | 5 % | n/a | n/a | |||||||||||||||||
Annalisa Jenkins | 6 % | n/a | n/a | |||||||||||||||||
Daphne Karydas (5) | 100 % | n/a | n/a | |||||||||||||||||
Thomas Lonngren | 5 % | n/a | n/a | |||||||||||||||||
Robert McQuade | 6 % | n/a | n/a | |||||||||||||||||
Linda McGoldrick | 5 % | n/a | n/a | |||||||||||||||||
Wayne Riley | 6 % | n/a | n/a | |||||||||||||||||
Employees % change (6) | 45 % | 21 % | 54 % |
2022 ($) | 2021 ($) | ||||||||||
Annual Retainer for Board Membership*: | 37,114 | 41,270 | |||||||||
Additional Annual Retainer for Lead Independent Director: | 18,557 | 20,635 | |||||||||
Additional Retainers for Committee Membership: | |||||||||||
Audit and Risk Committee Chair: | 14,846 | 16,508 | |||||||||
Audit and Risk Committee member: | 7,423 | 8,254 | |||||||||
Compensation and Leadership Development Committee Chair: | 9,897 | 11,005 | |||||||||
Compensation and Leadership Development Committee member: | 4,949 | 5,503 | |||||||||
Nominating and Corporate Governance Committee Chair: | 8,660 | 9,630 | |||||||||
Nominating and Corporate Governance Committee member: | 4,330 | 4,815 | |||||||||
Innovation and Research Committee Chair: | 9,897 | 11,005 | |||||||||
Innovation and Research Committee member: | 4,949 | 5,503 |
2023** ($) | 2022 ($) | |||||||
Annual Retainer for Chair | 99,495 | — | ||||||
Annual Retainer for Board Membership* | 40,000 | 37,114 | ||||||
Additional Annual Retainer for Lead Independent Director | 20,000 | 18,557 | ||||||
Additional Retainers for Committee Membership | ||||||||
Audit and Risk Committee Chair | 16,000 | 14,846 | ||||||
Audit and Risk Committee member | 8,000 | 7,423 | ||||||
Compensation and Leadership Development Committee Chair | 12,000 | 9,897 | ||||||
Compensation and Leadership Development Committee member | 6,000 | 4,949 | ||||||
Nominating and Corporate Governance Committee Chair | 10,000 | 8,660 | ||||||
Nominating and Corporate Governance Committee member | 5,000 | 4,330 | ||||||
Innovation and Research Committee Chair | 12,000 | 9,897 | ||||||
Innovation and Research Committee member | 6,000 | 4,949 |
Director | Executive/NED | Date of contract | ||||||
Kabir Nath | Executive | 01 August 2022 | ||||||
George Goldsmith* | NED | 01 January 2023 | ||||||
Ekaterina Malievskaia* | NED | 17 June 2023 | ||||||
David York Norton | NED | 14 September 2020 | ||||||
Annalisa Jenkins | NED | 14 September 2020 | ||||||
Daphne Karydas | NED | 18 September 2023 | ||||||
Thomas Lönngren | NED | 15 September 2020 | ||||||
Robert McQuade | NED | 25 March 2021 | ||||||
Linda McGoldrick | NED | 14 September 2020 | ||||||
Wayne Riley | NED | 31 March 2021 |
Director | Attendance | ||||
David York Norton* | 4 of 5 | ||||
Annalisa Jenkins | 5 of 5 | ||||
Wayne Riley | 5 of 5 |