Table of Dual Class Voting StructureContents

Board Meetings

        From the time of our initial public offering, or IPO, until December 31, 2018, we maintained a dual class equity voting structure, which provided holders of our Class B common stock with significant influence over certain limited matters requiring stockholder approval, including a merger involving Ironwood, a sale of substantially all Ironwood assets and a dissolution or liquidation of Ironwood. In accordance with the terms of our Certificate of Incorporation, each outstanding share of Class B common stock converted into one share of Class A common stock on December 31, 2018, resulting in the company having only one class of common stock. Throughout this proxy statement, unless otherwise noted, we refer to our Class A common stock as our "common stock."

Board Meetings

Our board of directors held eight17 meetings during 2018.2019. As stated in our corporate governance guidelines, we expect our board membersdirectors to rigorously prepare for, attend, and participate in all board and applicable committee meetings. Each board memberdirector is expected to ensure that other existing and planned future commitments do not materially interfere with his or her service as a director. We also expect that all of our board membersdirectors up for election at, or who have a term that continues after, an annual meeting of stockholders will attend such annual meeting. In 2018,2019, each incumbent director attended at least 75% of all meetings of the board of directors and all committees of the board of directors on which he or she served that were held during the period that such director was a member of the board of directors or the applicable committee. All nine of our directors at the time of our 20182019 annual meeting of stockholders attended suchthis meeting.

Committees

Our board of directors has established an audit committee, a governance and nominating committee and a compensation and HR committee. In addition, our board of directors established a capital allocation committee in 2018 to oversee and monitor the company's business mix and capital allocation decisions in order to make recommendations to the board of directors, as well as advise on the Separation. This committee was disbanded upon completion of the Separation. Each of the audit committee, the governance and nominating committee and the compensation and HR committee operates under a charter that has been approved by our board.board of directors. Copies of each charter are accessible through the Investors section of our website atwww.ironwoodpharma.com, under the heading Corporate Governance, and are also available in print to any stockholder who requests them from our Secretary.secretary. The chair of each of our committees is expected to rotate approximately every three to five years, unless the governance and nominating committee recommends otherwise.

Audit Committee.Committee

We have a separately designated standing audit committee established by our board of directors for the purpose of overseeing our accounting and financial reporting processes and audits of our financial statements. The members of our audit committee are Mses. Moukheibir and McHugh and Mr. Owens, with each of Ms. Moukheibir and Mr. Owens being appointed to the committee upon

Table of Contents

completion of the Separation.Owens. Ms. Moukheibir chairs the audit committee. Prior to the Separation, the audit committee was comprised of Mses. McHugh and Fanucci and Mr. Dreyfus. Our audit committee met sevensix times during 2018.2019. Our audit committee assists our board of directors in its oversight of significant risks facing Ironwood, the integrity of our financial statements and our independent registered public accounting firm's qualifications, independence and performance.

Our audit committee's responsibilities include:

•

reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements, earnings releases and related disclosures;



•

reviewing and discussing with management and our independent registered public accounting firm and, as needed, internal auditors or any relevant third party, our internal controls and internal auditing procedures, including any material weaknesses in either;



•

discussing our accounting policies and all material correcting adjustments with our management and our independent registered public accounting firm;



•

discussing with our management any significant risks or exposures facing the company and the related mitigation plans, and discussing with our independent registered public accounting firm any significant risks or exposures facing the company to the extent that such risks or exposures relate to accounting and thefinancial reporting and related mitigation plans, as well as plans;



•

monitoring our internal control over financial reporting and disclosure controls and procedures;



•

working with management to formulate a mitigation plan and reviewing the company's compliance with such mitigation plan in the event of a significant breakdown or security breach affecting the information technology systems of the company or a third party;

2020  Proxy Statement    15

Table of Contents

•

appointing, retaining, evaluating, overseeing, and approving the compensation for and, when necessary, terminating our independent registered public accounting firm;



•

approving all audit services and all permitted non-audit, tax and other services to be performed by our independent registered public accounting firm, in each case, in accordance with the audit committee's pre-approval policy;



•

discussing with the independent registered public accounting firm its independence and ensuring that it receives the written disclosures regarding these communications required by the Public Company Accounting Oversight Board;Board, or PCAOB;



•

reviewing with the independent registered public accounting firm, to the extent applicable, any matter arising from the audit of the financial statements that was communicated or required to be communicated that both relates to accounts or disclosures that are material to the financial statements and involves especially challenging, subjective or complex auditor judgment;



•

reviewing and approving all transactions or series of similar transactions to which we were or are a party in which the amount involved exceeded or exceeds $120,000 and in which any of our directors, executive officers, holders of more than 5% of any class of our voting securities, or any member of the immediate family of any of the foregoing persons, had or will have a direct or indirect material interest, other than compensation arrangements with directors and executive officers;



•

recommending whether the audited financial statements should be included in our annual report and preparing the audit committee report required by SEC rules;



•

reviewing with our independent registered public accounting firm all material communications between our management and our independent registered public accounting firm;



•

reviewing, updating and recommending to our board of directors approval of our code of business conduct and ethics; and



•

establishing procedures for the receipt, retention, investigation and treatment of accounting related complaints and concerns.

Our board of directors has determined that Ms. Moukheibir is an audit committee financial expert, as defined in Item 407(d)(5) of Regulation S-K.

16    Ironwood

Table of Contents

​

​

Audit Committee Report

In the course of our oversight of Ironwood's financial reporting process, we have (i) reviewed and discussed with management the company's audited financial statements for the fiscal year ended December 31, 2018,2019, (ii) discussed with Ernst & Young LLP, the company's independent registered public accounting firm, the matters and communications required to be discussed pursuant toby the applicable auditing standards,requirements of the PCAOB and the SEC, and (iii) received the written disclosures and the letter from Ernst & Young LLP, the company's independent registered public accounting firm, required by applicable requirements of the Public Company Accounting Oversight BoardPCAOB regarding the independent registered public accounting firm's communications with us concerning independence, discussed with the independent registered public accounting firm its independence, and considered whether the provision of non-audit services by the independent registered public accounting firm is compatible with maintaining its independence.

Based on the foregoing review and discussions, we recommended to the board of directors of the company that the audited financial statements be included in the company's Annual Report on Form 10-K for the year ended December 31, 20182019 for filing with the SEC.

2020  Proxy Statement    17

Table of Contents

Governance and Nominating Committee.Committee

The members of our governance and nominating committee are Messrs. Olanoff and Duane and Ms. McHugh. Mr. Duane joined the governance and nominating committee upon the completion of the Separation. Mr. Olanoff chairs the governance and nominating committee. Prior to the completion of the Separation, Mr. McGuire was a member of the committee. Our governance and nominating committee met two times during 2018.2019.

Our governance and nominating committee's responsibilities include:

•

assisting our board of directors in identifying and recruiting individuals qualified to become members of our board of directors;



•

recommending to our board of directors the persons to be nominated for election as directors;



•

assisting our board of directors in recruiting such nominees;



•

recommending to our board of directors qualified individuals to serve as committee members;



•

performing an annual evaluation of our board of directors and each committee of the board of directors;



•

evaluating the need and, if necessary, creating a plan for the continuing education of our directors;



•

assessing and reviewing our corporate governance guidelines and recommending any changes to our board of directors;



•

considering any potential conflicts of interest of members of our board of directors;



•

considering our policies with respect to their impact on significant issues of corporate social responsibility; and



•

evaluating and approving any requests from our executives to serve on the board of directors of another for-profit company.

Compensation and HR Committee.Committee

The members of our compensation and HR committee are Messrs. Dreyfus and Duane and Ms. Kessler, each of whom was appointed to the committee upon completion of the Separation.Kessler. Mr. Dreyfus chairs our compensation and HR committee. Prior to the completion of the Separation, the compensation and HR committee consisted of Mr. Owens, Ms. Schulman and Dr. Williams. Our compensation and HR committee met sixseven times during 2018.2019. Our compensation and HR committee assists our board of directors in fulfilling its responsibilities relating to the compensation of our board of directors and our executive officers.

Table of Contents

Our compensation and HR committee's responsibilities include:

•

reviewing and approving corporate goals and objectives relevant to executive officer compensation and evaluating the performance of executive officers in light of those goals and objectives;



•

reviewing and approving executive officer compensation, including salary, bonus and incentive compensation, deferred compensation, perquisites, equity compensation, benefits provided upon retirement, severance or other termination of employment, and any other forms of executive compensation;



•

reviewing and approving our chief executive officer's compensation based on its evaluation of the chief executive officer's performance;



•

reviewing and approving our peer companies to evaluate our compensation competitiveness and mix of compensation elements;



•

overseeing and administering our incentive compensation plans and equity-based plans and recommending the adoption of new incentive compensation plans and equity-based plans to our board of directors;



•

reviewing, accessing and making recommendations to our board of directors with respect to director compensation;



•

reviewing and discussing with management the compensation discussion and analysis required to be included in our filings with the SEC and recommending whether the compensation discussion and analysis should be included in such filings;



•

preparing the compensation and HR committee report required by the SEC; and



•

making recommendations to our board of directors with respect to management succession planning, including planning with respect to our chief executive officer.officer;

18    Ironwood

Table of Contents

•

overseeing compliance with applicable laws and regulations affecting employee compensation and benefits, including regarding stockholder approval of certain executive compensation matters; and



•

reviewing the risks associated with our compensation policies and practices.

Compensation Committee Interlocks and Insider Participation

None of the members of our compensation and HR committee is or has at any time during the past fiscal year been an officer or employee of Ironwood. None of the members of our compensation and HR committee has formerly been an officer of Ironwood. None of our executive officers serve, or in the past fiscal year has served, as a member of the board of directors or compensation committee of any other entity that has one or more executive officers serving as a member of our board of directors or compensation and HR committee. None of the members of our compensation and HR committee had any relationship with us that requires disclosure under any paragraph of Item 404 of Regulation S-K under the Exchange Act.

How We Are Paid

The vast majority of the compensation that our non-employee directors receive for service on our board of directors is paid in the form of restricted shares of our Class A common stock. Vesting of these shares of restricted stock is contingent on each non-employee director continuing to serve as a member of the board of directors on the last day of each applicable vesting period. Further, whetherIf a director ceases serving as a member of our board of directors at any time during the sharesvesting period of a restricted stock are vestedaward, or not, no director may transfer anyRSA, unvested shares will be forfeited on the date of restricted stock while such person is a directordirector's termination of Ironwood, subjectservice.

Director Compensation Plan, effective January 2014

From January to limited exceptions. We believe these forfeiture and transfer restrictions underMay 2019, our directors were compensated pursuant to our prior director compensation plan, effectively create stock ownership guidelines for our directors in that they ensure that the interests of our directors, each of whom has equity in the business, are aligned with those of our stockholders and they focus our directors on maximizing long-term value.

        Under our director compensation plan,which became effective January 1, 2014, or the 2014 Director Compensation Plan. Under this plan, at each annual meeting of stockholders, our non-employee directors receivereceived an annual grant of the number of restricted shares of

Table of Contents

our Class A common stock calculated by dividing (i) the dollar amount for total director compensation approximating the 25th percentile of our current peer group on the date of grant, by (ii) the average closing price of our Class A common stock on the Nasdaq Global Select Market for the six months preceding the month in which the applicable annual meeting of stockholders occurs. Such restricted shares vestvested 25% on each three-month anniversary of the grant date over a nine-month period and the remaining 25% on the day before the date of the annual meeting of stockholders for the next calendar year. For 2018, our compensation and HR committee determined that the 25^th percentile for total director compensation for our peer group was approximately $250,000. Accordingly, on May 31, 2018, the date of our 2018 annual meeting of stockholders, each of our non-employee directors received a grant of restricted stock consistent with the foregoing terms and valuation.

Under our director compensation plan,2014 Director Compensation Plan, if a non-employee director iswas elected other than at an annual meeting of our stockholders, on the start date of such non-employee directors service on the board of directors, such non-employee director will bewas granted the number of restricted shares of our Class A common stock granted to non-employee directors at the most recent annual meeting of our stockholders, prorated based on the number of days between the last annual meeting of our stockholders and the date on which the non-employee director began service with us. In connection with their election to the board, on April 1, 2019, each of Mses. Kessler and Moukheibir, Dr. Currie and Mr. Duane were issued 2,995 restricted shares of our Class A common stock, which are scheduled to vestvested in full on the day before the date of thisour 2019 annual meeting of stockholders.

In addition, pursuant to our director compensation plan,2014 Director Compensation Plan, the chair of our board and each of the committee chairs receivesreceived annual compensation of $10,000, payable quarterly in unrestricted stock or cash at the individual director's election. Shares of our Class A common stock issued to our directors under our director compensation plan are2014 Director Compensation Plan were granted under our Amended and Restated 2010 Employee, Director and Consultant Equity Incentive Plan, or the 2010 Plan. Further, whether the shares of restricted stock are vested or not, no director may transfer any shares of restricted stock granted pursuant to our 2014 Director Compensation Plan while such person is a director of Ironwood, subject to limited exceptions.

2020  Proxy Statement    19

Table of Contents

Under our 2014 Director Compensation Plan, non-employee directors also were reimbursed for reasonable travel and other expenses incurred in connection with attending meetings of the board of directors and its committees.

Non-Employee Director Compensation Policy, effective May 2019

Following a competitive assessment of market data related to non-executive director compensation provided by Pearl Meyer & Partners, LLC, or Pearl Meyer, our compensation consultant at the time, our compensation and HR committee approved our non-employee director compensation policy, or the 2019 Director Compensation Policy, effective in May 2019. Under our 2019 Director Compensation Policy, at each annual meeting of stockholders, our non-employee directors are granted restricted shares of our Class A common stock with a grant date fair value of $250,000, determined based on the average closing price of our Class A common stock on the Nasdaq Global Select Market (or the stock exchange on which our stock is being actively traded) for the six months preceding the month in which the award is granted, rounded down to the nearest whole share. Such restricted shares vest in full on the date immediately preceding the date of the next annual meeting of stockholders.

Under our directors are eligible2019 Director Compensation Policy, if a non-employee director is elected other than at an annual meeting of our stockholders, then upon his or her initial election to participate. If a director ceases serving as a member of our board of directors, such director will be granted the number of restricted shares of our Class A common stock granted to non-employee directors at any time during the vesting periodmost recent annual meeting of aour stockholders, prorated based on the number of days between the last annual meeting of our stockholders and the date on which the non-employee director began service with us. Such restricted stock award, unvested shares will be forfeitedvest in full on the date immediately preceding the date of the next annual meeting of stockholders. In addition, each non-employee director who is first elected to our board of directors will, upon his or her initial election, be granted restricted shares of our Class A common stock with a grant date fair value of $250,000, determined based on the average closing price of our Class A common stock on the Nasdaq Global Select Market (or the stock exchange on which our stock is being actively traded) for the six months preceding the month in which the award is granted, rounded down to the nearest whole share. Such restricted shares vest in three equal installments on the first three anniversaries of the grant date.

Shares of restricted stock that were granted to our directors under our 2019 Director Compensation Policy in connection with our 2019 annual meeting of stockholders were granted under our 2010 Plan. After May 2019, shares of restricted stock granted to directors under our 2019 Director Compensation Policy will be granted under our 2019 Equity Incentive Plan, or our 2019 Plan.

In addition to equity grants, each non-employee director receives an annual retainer under our 2019 Director Compensation Policy for his or her service on our board of directors, as well as additional fees for board chair, committee or committee chair service as follows:

20    Ironwood

Table of Contents

All cash fees are payable quarterly in arrears and will be prorated for any quarter of partial service, and fees payable under our 2019 Director Compensation Policy were retroactive to April 1, 2019. Each non-employee director may elect, prior to January 1 of the year with respect to which such director's terminationelection will be effective, to receive fully vested shares of service.our Class A common stock at no cost in lieu of his or her annual cash retainer and any additional cash retainers for board chair, committee or committee chair service set forth above. The number of shares of our Class A common stock to be issued will be determined by dividing the applicable cash retainer(s) the director would be eligible to receive by the closing price of our Class A common stock on the Nasdaq Global Select Market (or the stock exchange on which our stock is being actively traded) on the date the cash fees would otherwise be paid, rounded down to the nearest whole share. Further, non-employee directors are reimbursed for reasonable travel and other expenses incurred in connection with attending meetings of the board of directors and its committees.

Director Stock Ownership Guidelines

In May 2019, we instituted stock ownership guidelines that provide that each non-employee director must accumulate and continuously hold shares of our Class A common stock with a value equal to or greater than three times the amount of the then-current annual retainer paid to the non-employee director for service on our board of directors (excluding any additional board chair, committee, or committee chair retainers). Non-employee directors are required to achieve this level of ownership by the later of (a) May 30, 2021 (the date which is two years from the date of our 2019 annual meeting of stockholders) and (b) two years from the date the individual began service with us, or the Ownership Date.

Compliance with the stock ownership requirements will be measured on the date of the annual meeting of stockholders each year based on the annual retainer then in effect. Following the Ownership Date, until a non-employee director holds the required ownership level and if such director does not hold the number of shares of our Class A common stock to meet the stock ownership requirements at any time thereafter, such director will be required to retain 100% of any shares of our Class A common stock held or received upon the vesting or settlement of equity awards or the exercise of stock options, in each case, net of shares sold to cover applicable taxes and the payment of any exercise or purchase price (if applicable). Further, following the Ownership Date, to the extent a non-employee director does not hold the number of shares of our Class A common stock that meets this threshold, such director will be automatically deemed to have elected to receive any cash retainer for service on our board of directors or a committee thereof in the form of shares of our Class A common stock in an amount that satisfies the threshold shortfall.

In addition to the stock ownership guidelines described above, the non-employee director share transfer restrictions described above under our 2014 Director Compensation Plan remain in effect with respect to any shares granted under that plan.

We believe our stock ownership guidelines and other transfer restrictions ensure that the interests of our directors, each of whom has equity in the business, are aligned with those of our stockholders and further focus our directors on maximizing long-term value.

Director Compensation Table

The following table sets forth information regarding the compensation earned during the year ended December 31, 20182019 by each of our directors who served in 2019 other than (i) Mr. Mallon, our current chief executive officer and current member of our board of directors, (ii) Peter Hecht, our former chief executive officer and former member of board of directors, and (iii) Mark Currie, our former senior vice president, chief scientific officer and president of R&D and current member of our board of directors. Neither Mr. Mallon nor Dr. Hecht who did not receivereceived compensation for his service as a director.on our board of directors, and Dr. Hecht'sCurrie's compensation for his service ason our chief executive officerboard of directors is described in ourCompensation Discussion and Analysis andincluded in theSummary Compensation Table and related footnotes includedavailable elsewhere in this proxy statement.

Tablestockholders, which shares will vest in full on the date immediately preceding the date of Contents

2020  Proxy Statement    21

Table of Contents

22    Ironwood

Table of Contents

On April 1, 2019, each of the non-employee directors who was on our board of directors prior to the date of the Separation held 4,056 unvested shares of our Class A common stock, which represented 25% of the annual restricted stock award of 16,223 shares of our Class A common stock granted on the date of our 2018 annual meeting of stockholders. In connection with the Separation, on April 1, 2019, each such director received a dividend of 405 shares of unrestricted shares of Cyclerion common stock, which amount was determined according to a fixed ratio of one share of Cyclerion common stock for every 10 shares of unvested Ironwood Class A common stock. In addition to receiving 405 shares of Cyclerion common stock, the Separation had the following impact on unvested restricted stock held by directors at the time of the Separation:

Furthermore, the directors who joined Ironwood's board of directors in connection with the Separation (Mses. Kessler and Moukheibir, Dr. Currie and Mr. Duane) also received 405 shares of Cyclerion common stock in addition to the award of 2,995 shares of restricted Ironwood Class A common stock granted on April 1, 2019 in connection with joining our board of directors. Further information on the impact of the Separation on directors' equity is available elsewhere in this proxy statement under the captionCompensation Discussion and Analysis—Equity Impact of the Separation.

2020  Proxy Statement    23

Table of Contents

PROPOSAL NO. 1—ELECTION OF DIRECTORS

Table of Contents

Our board recommends that you vote for each of the
Class III directors up for election.

        Our board has nominated each of our current Class IIII directors—Dr. Currie and Messrs. OwensDuane and Dreyfus and Ms. McHugh—Mallon—for election at the 20192020 annual meeting. Each of Dr. Currie and Messrs. OwensDuane and Dreyfus and Ms. McHughMallon has indicated his or her willingness to serve if elected and has consented to be named in the proxy statement. Should any nominee become unavailable for election at the annual meeting, the persons named on the enclosed proxy card as proxy holders may vote all proxies given in response to this solicitation for the election of a substitute nominee chosen by our board.board of directors.

Vote Required

The three nominees for director with the highest number of affirmative votes will be elected as directors to serve for three yearsone year and until their successors are duly elected and qualified or until their death, resignation or removal. Because there is no minimum vote required, abstentions and broker non-votes will not affect the outcome of this proposal.

26    Ironwood

Table of Contents

Our Executives

The following table sets forth certain information, as of April 21, 2020, with respect to each of our executive officers, other than Mr. Mallon, whose biographical information is included elsewhere in this proxy statement under the captionOur Board of Directors:

2020  Proxy Statement    27

Table of Contents

28    Ironwood

Table of Contents

EXECUTIVE COMPENSATION

2020  Proxy Statement    29

Table of Contents

Executive Compensation

Dear Ironwood stockholders,

2019 was a transformative year for Ironwood, underscored by the clear execution from the Ironwood team in driving forward our mission to advance treatment of GI diseases and redefine the standard of care for millions of GI patients. Ironwood is undeniably a very different company today than it was a little over a year ago.

In line with the changes in the company's focus, strategy and leadership team marked by the Separation, we took the opportunity in 2019 to refresh a number of the company's significant plans and policies. At our 2019 annual meeting of stockholders, our stockholders approved our 2019 Equity Incentive Plan, which, among other features that we believe will advance the interests of our stockholders, did not continue the "evergreen" feature of our prior equity incentive plan and limited share recycling under the plan. Additionally, in early 2019, we adopted a clawback policy that provides that our board of directors may recover from our current and former executive offers certain incentive compensation under certain conditions upon a financial restatement. We also instituted formal stock ownership guidelines for directors to further align our director compensation program with the long-term performance of the company.

We also made several important changes to Ironwood's executive compensation program. As we discuss further below, we developed a competitive compensation package to recruit Mark Mallon, who became our CEO in connection with the Separation. We adopted a new executive compensation peer group that includes similarly sized commercial biopharmaceuticals peers (based on market capitalization, median revenue, number of employees, as well as other factors) to align to our post-Separation profile. In addition, for our 2020 executive equity compensation program, we decided to replace stock option grants with performance-based stock unit awards that are designed to further align executive pay with our performance, including stock price performance. We believe this important adjustment will motivate our executive team and further tie our executives' compensation to stockholder value.

As always, we are open to your feedback. Thank you for the privilege of serving as your compensation and HR committee chair.

Sincerely,

Andrew Dreyfus

Chair, Compensation and HR Committee

30    Ironwood

Table of Contents