UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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IRONWOOD PHARMACEUTICALS, INC.
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100 Summer Street, Suite 2300
Boston, Massachusetts 02110
Boston, Massachusetts 02110
NOTICE OF 20232024 ANNUAL MEETING OF STOCKHOLDERS OF
IRONWOOD PHARMACEUTICALS, INC.
IRONWOOD PHARMACEUTICALS, INC.
| | Date: | | | Tuesday, June | |
| | Time: | | | 9:00 a.m. Eastern Time | |
| | Location: | | | Our | |
| | Purpose: | | | We are holding the annual meeting for stockholders to consider | |
| | | | | 1. To elect our nine director nominees, Mark Currie, Ph.D., Alexander Denner, Ph.D., Andrew Dreyfus, Jon Duane, Marla Kessler, Thomas McCourt, Julie McHugh, Catherine Moukheibir and Jay Shepard, each to serve for a one-year term extending until our 2. To hold an advisory vote on named executive officer compensation; and 3. To ratify our audit committee’s selection of Ernst & Young LLP as our auditors for | |
We will also consider action on any other matter that may be properly brought before the meeting or any postponement(s) or adjournment(s) thereof.
Our board of directors recommends you vote “for” each of the nine nominees for director (proposal no. 1), “for” the advisory vote on named executive officer compensation (proposal no. 2), “one year” for the frequency of the advisory vote on named executive officer compensation (proposal no. 3), “for” the approval of the amendment to our 2019 Plan (proposal no. 4), and “for” ratification of our selection of auditors (proposal no. 5) 3). Only stockholders of record at the close of business on April 21, 202319, 2024 are entitled to notice of and to vote at the meeting.
We are pleased to take advantage of the Securities and Exchange Commission, or SEC, rules that allow us to furnish proxy materials to our stockholders on the internet. We believe these rules allow us to provide you with the information that you need while lowering the costs of delivery and reducing the environmental impact of the annual meeting.
Our annual meeting, as in prior years, will be conducted in a virtual-only format, solely by means of a live audio webcast. Our virtual stockholder format uses technology designed to provide our stockholders rights and opportunities to participate in the virtual meeting similar to an in-person meeting. A virtual meeting allows more stockholders to attend the meeting without cost from anywhere around the globe. You may attend the meeting, vote and submit questions electronically during the meeting via live webcast by visiting the website provided above. A list of stockholders of record will be available electronically during the meeting. The website can be accessed on a computer, tablet, or phone with internet connection. To be admitted to the meeting at www.virtualshareholdermeeting.com/IRWD2023IRWD2024, you must enter the 16-digit control number found on your proxy card, voting instruction form or notice that you received.
Proxy Material Mailing Date:
April 27, 202325, 2024
Sincerely,
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Thomas McCourt
Chief Executive Officer and Director
Chief Executive Officer and Director
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Table of Contents
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| | Letter From Our CEO | | | | | 1 | | |
| | About Ironwood | | | | | 3 | | |
| | Our Board of Directors | | | | | | | |
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| | Our Executives | | | | | | | |
| | Executive Compensation | | | | | | | |
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| | | | | | | | ||
| | CEO Pay Ratio | | | | | 64 | | |
| | Pay Versus Performance | | | | | 65 | | |
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| | Our Stockholders | | | | | | | |
| | Certain Relationships and Related Person Transactions | | | | | | | |
| | | | | | | | ||
| | User’s Guide | | | | | | | |
| | Stockholder Communications, Proposals and Nominations for Directorships | | | | | | | |
| | SEC Filings | | | | | |||
| | |
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Letter From Our CEO
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Dear Ironwood stockholders,
To uphold these commitments, we remain central toanchored by our mission as an organization and the value we deliver tothree clearly defined objectives: 1) maximize LINZESS, 2) advance our stakeholders. We remain focused on executing our GI-focused strategy by 1) maximizing LINZESS® (linaclotide), 2) strengthening and progressing our innovative GI portfolio,pipeline, and 3) deliveringdeliver sustained profits and generating cash flow.flows.
In June 2023, LINZESS received U.S. FDA approval to become the first and only approved prescription therapy for patients reflectingages 6 to 17 years old with functional constipation, providing an important opportunity to expand its clinical utility in younger populations.
Furthermore, in 2023, we strengthened our GI pipeline with the true magnitudeacquisition of its impact. Additionally, LINZESS isVectivBio, a global clinical-stage biopharmaceutical company with operations in Basel, Switzerland. We strongly recommended by guidelinesbelieve that the VectivBio acquisition fits squarely within our strategic framework and represents a critical step forward for Ironwood to achieve our vision and deliver value for patients and shareholders. Through this acquisition, we are advancing apraglutide, a next-generation, synthetic peptide analog of the American Gastroenterological Association (AGA) and American College of Gastroenterology (ACG)GLP-2 being evaluated for the treatment of SBS-IF. In February 2024, we announced positive topline results from our STARS Phase III clinical trial in patients with SBS-IF and plan to submit a new drug application and other regulatory filings for apraglutide as a once-weekly GLP-2 analog for use in adult patients with IBS-C.SBS who are dependent on parenteral support. In addition, in late March 2024, we announced positive primary results for our Phase II exploratory trial, STARGAZE, in patients with aGvHD.
We anticipate several exciting milestones ahead withbelieve these programs have the potential to advanceimprove the value potentialstandard of care and significantly enhance the quality of life for patients suffering with GI diseases.
We remain focused on making Ironwood a great place to work. We are pleased that our pipelineinvestments in 2023.employee programs continue to be reflected in high employee engagement scores and a fourth-consecutive Top Workplaces USA award this year. We were also named a DE&I Standout by The Boston Globe Magazine. We continue strengthening our collaborative culture, advancing our DE&I initiatives through our employee resource groups, and fostering leadership and talent development.
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I encourage you to read the following pages, that follow thatwhich will tell you more about our journey as a company. We believecompany and my confidence that Ironwood is well-positionedwell positioned for continued growth as we execute againstfuture growth. This confidence is underscored by our strategic priorities, make a differencelegacy of innovation and leadership in GI, the livesexpected durability of GI patients,LINZESS, our enriched R&D pipeline, and our ability to responsibly generate shareholder value.
We askare grateful to our colleagues, clinical investigators, physicians, partners, and, of course, patients and their families who have made our advancements possible, and we look forward to continued progress and momentum across our R&D programs and corporate objectives in the year ahead.
Thank you for your votingcontinued support on the items describedand investment in this proxy statement so we can have the opportunity to continue to deliver for you and all our stockholders.important work.
Sincerely,
Thomas McCourt
Chief Executive Officer and Director
2 Ironwood
About Ironwood
We aspire to bring innovative treatments for GI diseases to patients in need.
We are a gastrointestinal, (GI)or GI, healthcare company dedicated to advancing the treatment of GI diseases and redefining the standard of care for GI patients. We are focused on the development and commercialization of innovative GI product opportunities in areas of significant unmet need, leveraging our demonstrated expertise and capabilities in GI diseases.
LINZESS® (linaclotide), our commercial product, is the first product approved by the United States Food and Drug Administration, or U.S. FDA, in a class of GI medicines called guanylate cyclase type C agonists, or GC-C agonists, and is indicated for adults suffering from irritable bowel syndrome with constipation, or IBS-C, or chronic idiopathic constipation, or CIC.CIC, and for pediatric patients ages 6-17 years-old with functional constipation, or FC. LINZESS is the U.S. branded prescription market leader for adults in the IBS-C and CIC categories. LINZESS is available to adults suffering from IBS-C or CIC in the United States, Mexico and Saudi Arabia, to adults suffering from IBS-C or chronic constipation in Japan, and IBS-C in China.China and for pediatric patients ages 6-17 years-old with FC in the U.S. Linaclotide is available under the trademarked name CONSTELLA® to adults suffering from IBS-C or CIC in Canada, and to adults suffering from IBS-C in certain European countries.
In addition to LINZESS, we have an emerging pipeline of innovative GI assets, highlighted by apraglutide for the potential treatment of short bowel syndrome with intestinal failure, or SBS-IF, a severe malabsorptive condition. We believe apraglutide has the potential to improve the standard of care for all adult patients with SBS who are dependent on parenteral support, or PS, as the only synthetic peptide analog of glucagon-like peptide-2, or GLP-2, with once‑weekly administration, and extend the growth horizon of our company through the 2030s if successfully developed, approved and commercialized.
Additionally, we recently announced positive primary results for our Phase II exploratory trial, STARGAZE, in patients with aGvHD, and are progressing with Phase II studies for CNP-104, a potentially disease-modifying therapy for the treatment of primary biliary cholangitis, or PBC, and phase 2 proof of concept study for IW-3300, a guanylate cyclase-C, or GC-C, agonist, for the potential treatment of visceral pain conditions, including interstitial cystitis/bladder pain syndrome, or IC/BPS, and endometriosis.
We recognize the value of collaboration and have a track record of establishing, operating and evolving high-performance partnerships globally. We have strategic partnerships with leading pharmaceutical companies to support the development and commercialization of linaclotide around the world. We also aim to leverage our leading capabilities in GI to bring additional treatment options to GI patients.
We believe our history of innovation in GI medicine, deep expertise in developing and commercializing innovative GI therapies, established relationships within the GI community, as well as our leadership’s experience building blockbuster brands, positions us well to advance GI care and bring treatments with the potential to deliver great impact for patients, our business and our stockholders.
In 2022,2023, our GI-focused strategy, building on our commercial success and GI development capabilities, continued to center on three core priorities: maximize LINZESS, strengthen and progressadvance our innovative GI portfolio,pipeline, and deliver sustained profits and generate cash flow.
2024 Proxy Statement 3
Performance Against 2022 Strategic2023 Core Priorities
1.
Maximize LINZESS
•
We recognized $398.8$430.5 million in collaborative arrangements revenue related to sales of LINZESS in the U.S. during the year ended December 31, 2022, a slight decrease2023, an increase of $31.7 million compared to the year ended December 31, 2021. Prescription2022. The increase was primarily driven by a 10% increase in LINZESS prescription demand, growth of 9% waspartially offset by net price erosion and inventory channel fluctuations. We remain confident in the long-term growth potential of LINZESS based on continued strong prescription demand.
•
In September 2022, we announced positive topline data from a Phase III clinical trial evaluating linaclotide 72 mcg in pediatric patients aged 6-17 years with functional constipation, or FC. The trial met its primary and secondary endpoints, demonstrating that linaclotide 72 mcg improved frequency of spontaneous bowel movements and stool consistency. Linaclotide was generally well-tolerated, and the safety profile is consistent with previously reported studies with linaclotide in FC and irritable bowel syndrome in pediatric patients. In December 2022, we and AbbVie, Inc., or AbbVie, submitted a Supplemental New Drug Application, or sNDA,
2.
•
In June 2023, we completed a tender offer to purchase 98% of the outstanding ordinary shares of VectivBio Holding AG, or VectivBio, a clinical-stage biotechnology company focused on the discovery and Progressdevelopment of treatments for severe, rare GI conditions for which there is a significant unmet medical need. In December 2023, we completed a squeeze-out merger to acquire all remaining shares. The VectivBio acquisition was partially funded with $400 million of borrowings under a new revolving credit facility. Through the acquisition, we are advancing apraglutide, a next-generation, synthetic peptide analog of GLP-2 for rare gastrointestinal diseases, including SBS-IF.
•
In February 2024, we announced positive topline results from the pivotal Phase III STARS trial, which evaluated the efficacy and safety of once-weekly subcutaneous apraglutide in reducing PS dependency in adult patients with SBS-IF. SBS-IF, a rare and severe organ failure condition in which patients are dependent on PS, affects an estimated 18,000 adult patients in the U.S., Europe and Japan. Based on the results from the STARS trial, we plan to submit a new drug application and other regulatory filings for apraglutide for use in adult patients with SBS who are dependent on PS.
•
In March 2024, we announced positive, primary results up to Day 91 for our Innovative GI PortfolioPhase II exploratory trial, STARGAZE, to evaluate apraglutide in patients with steroid-refractory gastrointestinal acute Graft versus Host Disease, or aGvHD, which evaluated the safety and tolerability of once-weekly apraglutide in aGvHD patients treated with standard of care, including systemic corticosteroids and ruxolitinib.
•
Through our collaboration and license option agreement, or the COUR Collaboration Agreement, with COUR Pharmaceuticals,Pharmaceutical Development Company, Inc., a biotechnology company developing novel immune-modifying nanoparticles to treat autoimmune diseases, or COUR, we and COUR are developing CNP-104 for the potential treatment of PBC, a rare autoimmune disease targeting the liver that affects approximately 130,000 people in the U.S., according to a study published in Clinical Gastroenterology and Hepatology in 2018. If successful, CNP-104 has the potential to be the first approved PBC disease-modifying therapy. In December 2021, the U.S. FDA granted Fast Track Designation to CNP-104.therapy for PBC. COUR is currently conducting a clinical study to evaluate the safety, tolerability, pharmacodynamic effects and efficacy of CNP-104 in PBC patients, with earlytopline data assessing T-cell response from patients enrolled in the clinical study expected in the second halfthird quarter of 2023. We expect that such early data will inform timing of topline data readout.2024.
•
We are advancing IW-3300, a GC-C agonist, for the potential treatment of visceral pain conditions, including interstitial cystitis/bladder pain syndrome, or IC/BPS and endometriosis, both having a limited number of treatment options available.endometriosis. IC/BPS affects an estimated 4 to 12 million people in the U.S., according to the Interstitial Cystitis Association as of 2022. An estimated 4 million reproductive-age women in the U.S. have been diagnosed with endometriosis, according to a study published in Gynecologic and Obstetric Investigation in 2017. Both diseases have a limited number of treatment options available. We successfully completed Phase I
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studies to evaluate the safety and tolerability of IW-3300 in healthy volunteers and expect to begin patient dosing forare continuing the Phase II proof of concept study in IC/BPS patients in early 2023.BPS.
3.
Deliver Sustained Profits and Generate Cash Flow
•
•
We generated $273.8$183.4 million in cash from operations during the year ended December 31, 2022,2023, ending the year with $656.2$92.2 million in cash and cash equivalents.
As we continue to execute on our strategic priorities, we have great confidence in our ability to continue making a meaningful difference for GI patients and growrealize our position as avision of becoming the leading GI healthcare company in the U.S.industry.
Our 20222023 company performance achievement multiplier, which we used as a key consideration in determining executive compensation for 20222023 performance, was 75%120%, as determined by our board of directors. Please see the Compensation Discussion and Analysis section included elsewhere in this proxy statement for detailed information on compensation to our 20222023 named executive officers.
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Note about Forward-Looking Statements
This proxy statement contains forward-looking statements. Investors are cautioned not to place undue reliance on these forward-looking statements, including statements about Ironwood’s ability to execute on its mission; Ironwood’s strategy, business and operations; Ironwood’s ability to drive growth and generate shareholder value; the commercial potential of LINZESS; the potential opportunityof apraglutide to improve the standard of care for LINZESS growth and improved brand margins, includingall adult patients with SBS dependent on parenteral support; the potential for LINZESS to be the branded market leader cross current and potential future indications; the advancement of our linaclotide pediatrics development program; the development of IW-3300 as a potential first in class treatment for visceral pain conditions; potential of CNP-104 to be the first PBC disease modifyingapproved disease-modifying therapy for PBC; the potential of apraglutide and CNP-104 to extend the growth horizon of Ironwood through the 2030s; Ironwood’s plan to submit a new drug application and other regulatory filings for apraglutide for use in adult patients with SBS who are dependent on PS; Ironwood’s anticipation of reaching new clinical development milestones in 2024 and the expected timing of receiving early data from the clinical study for CNP-104 in PBC patients and the results thereof,related thereto, and the belief that this will inform timing of topline data readout; the in-licensing or acquisition of externally developed clinical and commercial products; the potential long-term growth of our GI pipeline; our ability to deliver impactIronwood is positioned well for patients, our business, and our stockholders; and our approach to capital allocation.long term growth. These forward-looking statements speak only as of the date of this proxy statement, and Ironwood undertakes no obligation to update these forward-looking statements. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statement. Applicable risks and uncertainties include those related to the effectiveness of development and commercialization efforts by us and our partners; preclinical and clinical development, manufacturing and formulation development of linaclotide, apraglutide, CNP-104, IW-3300, and our product candidates; the risk of uncertainty relating to pricing and reimbursement policies in the U.S., which, if not favorable for our products, could hinder or prevent our products’ commercial success; the risk that clinical programs and studies, including for the linaclotide pediatric program,apraglutide, IW-3300 and CNP-104, may not progress or develop as anticipated, including that studies are delayed or discontinued for any reason, such as safety, tolerability, enrollment, manufacturing, economic or other reasons; the risk that findings from our completed nonclinical and clinical studies may not be replicated in later studies; the risk of competition or that new products may emerge that provide different or better alternatives for treatment of the conditions that our products are approved to treat; the risk that we or our partners are unable to obtain, maintainexecute on our strategy to in-license externally developed products or manufacture sufficient LINZESSproduct candidates; the risk that we are unable to successfully partner with other companies to develop and commercialize products or product candidates; the risk that healthcare reform and other governmental and private payor initiatives may have an adverse effect upon or prevent our products’ or product candidates, or otherwise experience difficulties with respect to supply or manufacturing;candidates’ commercial success; the efficacy, safety and tolerability of linaclotide and our product candidates; the risk that the commercial and therapeutic opportunities for LINZESS or our product candidates are not as we expect; decisions by regulatory and judicial authorities; the risk we may never get additional patent protection for linaclotide and other product candidates, that patents for linaclotide or other products may not provide adequate protection from competition, or that we are not able to successfully protect such patents; the risk that we are unable to manage our expenses or cash use, or are unable to commercialize our products as expected; the risk that we may elect to not exercise our option to acquire the exclusive license for CNP-104; the risk that the development of any of our clinicallinaclotide pediatric programs, in IBS-C and functional constipation in 6 to 17 years old,apraglutide, CNP-104 and/or IW-3300 are not successful or that any of our product candidates does not receive regulatory approval or is not successfully commercialized; the risk that the FDA will not approve our sNDA submission for the potential indication in functional constipation in pediatric patients aged 6-17 years; outcomes in legal proceedings to protect or enforce the patents relating to our products and product candidates, including abbreviated new drug application litigation; the risk that financial and operating results may differ from our projections; developments in the intellectual property landscape; challenges from and rights of competitors or potential competitors; the risk that our planned investments do not have the anticipated effect on our company revenues; developments in accounting guidance or practice; Ironwood’s or AbbVie’s accounting practices, including reporting and settlement practices as between Ironwood and AbbVie; the risk that we are unable to manage our expenses or cash use, or are unable to commercialize our products as expected; the impact of the COVID-19 pandemic;risk that our indebtedness could adversely affect our financial condition or restrict our future operations; and the risks listed under the heading “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022,2023, and in our subsequent SEC filings.
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Note regarding Trademarks
In this proxy statement, references to “the company” or “Ironwood” and, except within the Audit Committee Report and the Compensation Committee Report, references to “we”, “us” or “our” mean Ironwood Pharmaceuticals, Inc. LINZESS® and CONSTELLA® are trademarks of Ironwood Pharmaceuticals, Inc. Any other trademarks referred to in this proxy statement are the property of their respective owners. All rights reserved. The contents of our website are not incorporated into this document and you should not consider information provided on our website to be part of this document.
Our Board of Directors
Who We Are
The following table sets forth certain information, as of April 27, 2023,25, 2024, with respect to each of our directors. Each director has been nominated for election at the 20232024 annual meeting of stockholders to serve for a one-year term extending until the 20242025 annual meeting of stockholders and his or her successor is duly elected and qualified.
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| | Name | | | Age | | | Audit Committee | | | Governance and Nominating Committee | | | Compensation and HR Committee | | ||||||||||||
| | Mark Currie, Ph.D. | | | | | | | | | | | | | | | | | | | | | | ✓ | | | |
| | Alexander Denner, Ph.D. | | | | | | | | | | | | | | | | C | | | | | | | | | |
| | Andrew Dreyfus | | | | | | | | | | | | | | | | | | | | | | C | | | |
| | Jon Duane | | | | | | | | | | | | | | | | ✓ | | | | | | ✓ | | | |
| | Marla Kessler | | | | | | | | | | | | | | | | | | | | | | ✓ | | | |
| | Thomas McCourt | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Julie McHugh, Chair | | | | | | | | | | ✓ | | | | | | ✓ | | | | | | | | | |
| | Catherine Moukheibir | | | | | | | | | | C | | | | | | | | | | | | | | | |
| | Jay Shepard | | | | | | | | | | ✓ | | | | | | | | | | | | | | | |
“C” indicates chair of the committee.
| | | | | |
MARK CURRIE, Ph.D. Scientific Officer, Cyclerion Therapeutics, Inc. Age: Director since 2019 Board Committees • Compensation and HR Committee | | | • Dr. Currie has been a partner of Iaso Ventures, LP, an early-stage healthcare venture capital firm, since January 2024. Dr. Currie was previously the chair of the scientific advisory board of Cyclerion Therapeutics, Inc., or Cyclerion, a clinical-stage biopharmaceutical company, • Prior to joining Ironwood, Dr. Currie directed cardiovascular and central nervous system disease research as vice president of discovery research at Sepracor, Inc. and initiated, built and led discovery pharmacology and also served as director of arthritis and inflammation at Monsanto Company. • Dr. Currie currently serves on the board of directors of Antag Therapeutics ApS, Science Exchange, Inc. and Sea Pharmaceuticals, LLC, each of which is a privately held • Dr. Currie earned a B.S. in biology from the University of South Alabama and holds a Ph.D. in cell biology from the Bowman Gray School of Medicine of Wake Forest University. • We believe that Dr. Currie’s vast experience leading the research and development efforts of an international biotechnology company will prove instrumental in guiding us through the research and development of novel therapies. | |
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ALEXANDER DENNER, Ph.D. Founding Partner and Chief Sarissa Executive Officer of Sarissa Capital Acquisition Corp. Age: Director since 2020 Board Committees • Governance and Nominating Committee, Chair | | | • Dr. Denner is a founding partner and the chief investment officer of Sarissa Capital Management LP, or Sarissa, a registered investment advisor, where he has been since 2011. • Prior to joining Sarissa, Dr. Denner served as a senior managing director at Icahn Capital • Dr. Denner serves on the board of directors of • Dr. Denner earned his B.S. in mechanical engineering from Massachusetts Institute of Technology, an M.S. and M.Phil. in mechanical engineering from Yale University and an interdisciplinary Ph.D. from Yale University. • Dr. Denner brings to the board significant experience overseeing the operations and research and development of healthcare companies and evaluating corporate governance matters. He also has extensive experience as an investor, particularly with respect to healthcare companies, and possesses broad healthcare industry knowledge. | |
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ANDREW DREYFUS Former President and Chief Executive Officer for Blue Cross Blue Shield of Massachusetts Age: Director since 2016 Board Committees • Compensation and HR Committee, Chair | | | • Mr. Dreyfus most recently served as president and chief executive officer for Blue Cross Blue Shield of Massachusetts, or BCBSMA, one of the largest Blue Cross Blue Shield insurance plans in the country, from 2010 to 2022. From 2005 to 2010, Mr. Dreyfus served as the executive vice president of healthcare services of BCBSMA. • Prior to joining BCBSMA, he served as the first president of the Blue Cross Blue Shield Foundation. Mr. Dreyfus also previously served as executive vice president of the Massachusetts Hospital Association and held a number of senior positions in Massachusetts state government, including undersecretary of consumer affairs and business regulation. • Mr. Dreyfus serves on the board of directors and as a member of the audit committee and the compensation and management development committee of Alto Neuroscience, Inc. (NYSE: ANRO), a public company. Mr. Dreyfus also serves on the board of directors of Octave Health Group Inc., a privately held companyand the Joint Commission, the National Quality Forum and BCBSMA Foundation, • Mr. Dreyfus received a B.A. in English from Connecticut College. • Mr. Dreyfus brings to our board of directors significant expertise in the healthcare payer and reimbursement market, and broad management and executive leadership experience, providing valuable insight as we continue to develop and commercialize medicines in an evolving healthcare landscape. | |
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JON DUANE Senior Partner Emeritus, McKinsey & Company Age: Director since 2019 Board Committees • Governance and Nominating Committee • Compensation and HR Committee | | | • Mr. Duane is senior partner emeritus at McKinsey & Company, or McKinsey, an international management consulting company. Before his retirement in December 2017, Mr. Duane had served as a partner at McKinsey since 1992. • At McKinsey, Mr. Duane founded and led the firm’s biotech practice. In that role, Mr. Duane advised both private and public companies in the pharmaceutical, medical device and life science industries, as well as academic research centers, on various strategic initiatives. • Mr. Duane serves as the executive chair on the board of directors of Nashville Biosciences, LLC, a privately held company. • Mr. Duane graduated from Wesleyan University with a B.A. in government and received an M.B.A from Harvard Business School. • Mr. Duane brings to the board of directors significant experience advising academic research centers and companies across the life science and medical device industries. | |
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MARLA KESSLER Former Chief Marketing Officer, Datavant, Inc. Age: Director since 2019 Board Committees • Compensation and HR Committee | | | • Ms. Kessler • Previously, Ms. Kessler served in various roles for IQVIA, including vice president for global services marketing and knowledge management from 2013 to 2016, regional leader of the IMS Consulting Group in Europe from 2011 to 2013, location manager for the London IMS Consulting Group from 2009 to 2011 and senior principal from 2008 to 2009. • Before joining IQVIA, Ms. Kessler led several marketing efforts for Pfizer Inc. from 2004 to 2007 and worked in consulting for McKinsey & Company from 1996 to 2004. • Ms. Kessler received a B.S. in economics from Arizona State University and an M.B.A. from the Fuqua School of Business at Duke University. • Ms. Kessler provides an important commercial perspective to our board of directors given her expertise in strategic marketing, evidence-based research and customer experience in the life science industry. | |
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THOMAS McCOURT Chief Executive Officer, Ironwood Pharmaceuticals, Inc. Age: Director since 2021 | | | • Mr. McCourt has served as our chief executive officer and member of the board of directors since June 2021 and had previously served as president and interim chief executive officer from March 2021 to June 2021 and as president from April 2019 to June 2021. Prior to April 2019, Mr. McCourt served as our senior vice president of marketing and sales and chief commercial officer since joining Ironwood in 2009. • Prior to joining Ironwood, Mr. McCourt led the U.S. brand team for denosumab at Amgen Inc. from 2008 to 2009. Prior to that, Mr. McCourt was with Novartis AG from 2001 to 2008, where he directed the launch and growth of ZELNORM™ for the treatment of patients with IBS-C and CIC and held a number of senior commercial roles, including vice president of strategic marketing and operations. • Mr. McCourt was also part of the founding team at Astra-Merck Inc., leading the development of the medical affairs and science liaison group and then serving as brand manager for PRILOSEC® and NEXIUM®. • Mr. McCourt serves on the board of directors and as a member of the compensation committee of Pliant Therapeutics, Inc. (Nasdaq: PLRX), a public company, and on the board of trustees for the American Society of Gastrointestinal Endoscopy (ASGE). Mr. McCourt previously served on the board of directors of Acceleron Pharma Inc., including as a member of the audit committee and the chair of the nominating and governance committee. • Mr. McCourt received a B.S. in pharmacy from the University of Wisconsin. • Given his role as our chief executive officer and his previous leadership roles at the company since joining in 2009, we believe Mr. McCourt brings unique and in-depth insight into the operations and management of the company, which together with his extensive commercial experience, his deep knowledge of GI, and his experience launching and achieving blockbuster status for LINZESS, are valuable to our board of directors. | |
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JULIE McHUGH, CHAIR Former Chief Operating Officer, Endo Health Solutions, Inc. Age: Director since 2014 Board Committees • Audit Committee • Governance and Nominating Committee | | | • Ms. McHugh most recently served as chief operating officer for Endo Health Solutions, Inc., or Endo, from 2010 through 2013, where she was responsible for the specialty pharmaceutical and generic drug businesses. • Prior to joining Endo, Ms. McHugh was the chief executive officer of Nora Therapeutics, Inc. • Before that she served as company group • Prior to joining Centocor, Inc., Ms. McHugh led marketing communications for gastrointestinal drug Prilosec® (omeprazole) at Astra-Merck Inc. • Ms. McHugh currently serves on the board of directors of • Ms. McHugh received her M.B.A. degree from St. Joseph’s University and her B.S. degree from Pennsylvania State University. • Ms. McHugh’s experience as a chief executive officer and a chief operating officer at large multinational pharmaceutical companies makes her a valuable member of our board of directors. Her deep knowledge of Ironwood’s history and strategy and strong relationships with our senior leadership team also make her a valuable resource. | |
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CATHERINE MOUKHEIBIR Former Chief Executive Officer, MedDay Pharmaceuticals Age: Director since 2019 Board Committees • Audit Committee, Chair | | | • Ms. Moukheibir most recently served as chief executive officer of MedDay Pharmaceuticals, or MedDay, a biopharmaceutical company that focused on nervous system disorders, from July 2019 to January 2021. She was also the • Prior to that, Ms. Moukheibir served as the senior advisor for finance and a member of the executive board of directors at Innate Pharma SA, an oncology company, from 2011 to 2016, and as the chief financial officer for Movetis N.V. from 2008 to 2010, when it was acquired. • Ms. Moukheibir previously served as the director of capital markets for Zeltia Group S.A. from 2001 to 2007. • Ms. Moukheibir currently serves on the board of directors of the following public companies: MoonLake Immunotherapeutics AG (Nasdaq: MLTX), Biotalys NV (EBR: BTLS) and Oxford Biomedica plc (LSE: OXB)(1). Ms. Moukheibir also serves on the board of directors of Asceneuron SA, Noema Pharma AG • Ms. Moukheibir has an M.A. in economics and an M.B.A. from Yale University. • Ms. Moukheibir’s long leadership career in the biopharmaceutical industry, as well as her deep background in international finance, provide her with valuable business and financial expertise in support of our corporate objectives. | |
(1)
In March 2024, Ms. Moukheibir informed the board of directors of Oxford Biomedica plc, or Oxford, that she does not intend to stand for re-election at Oxford’s upcoming annual general meeting in June 2024.
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JAY SHEPARD Former President and Chief Executive Officer of Aravive, Inc. Age: Director since 2020 Board Committees • Audit Committee | | | • Mr. Shepard is an advisor at • From 2008 until May 2015, Mr. Shepard was an executive partner at Sofinnova Ventures, a venture capital firm focused on the healthcare industry. From 2010 to 2012, Mr. Shepard served as president and chief executive officer and was a member of the board of directors of NextWave Pharmaceuticals, Inc., a specialty pediatric pharmaceutical company. From 2005 to 2007, Mr. Shepard served as interim president and chief executive officer of Relypsa (Ilypsa, Inc.’s spin-out company, which was acquired by Galencia), a pharmaceutical company. Mr. Shepard was also vice president of commercial operations at Telik and oncology business unit head of Alza Pharmaceuticals (acquired by J&J). • Mr. Shepard has over 35 years of experience in the pharmaceutical, biotechnology and drug delivery arenas. Mr. Shepard has participated in or led over 16 product launches by preparing markets and establishing sales and marketing operations. • Mr. Shepard also currently serves on the board of directors of the following public companies: Inovio Pharmaceuticals, Inc. (Nasdaq: INO) and Esperion Therapeutics, Inc. (Nasdaq: ESPR). In addition, Mr. Shepard serves on the board of directors of Aculys Pharma, LLC, Cessation Therapeutics, Inc. and Pathalys Pharma, Inc., each of which is a privately held company. Mr. Shepard also serves as the chairman of the board of directors of the Christopher & Dana Reeve Foundation. • Mr. Shepard holds a B.S. in Business Administration from the University of Arizona. • Mr. Shepard brings deep expertise to our board of directors, as a recognized leader within the pharmaceutical industry, with nearly three decades of expertise as an accomplished public company CEO and senior executive. | |
How We are Selected and Evaluated
We believe that our board of directors should be comprised of individuals with sophistication and experience in many substantive areas that will help us achieve our vision of becoming a leading U.S. GI healthcare company dedicated to advancing the treatment of GI diseases and redefining the standard of care for GI patients.
The core criteria that we use in evaluating each nominee to our board of directors consists of the following: (a) an owner oriented attitude and a commitment to represent the interests of our stockholders, demonstrated, in part, through ownership of our stock; (b) strong personal and professional ethics, integrity and values; (c) strong business acumen and savvy; (d) a deep, genuine passion for our business and the patients whom we serve; (e) demonstrated achievement in the nominee’s field of expertise; (f) the absence of conflicts of interest that would impair the nominee’s ability to represent the interests of our stockholders; (g) the ability to dedicate the time necessary to regularly participate in meetings of the board and committees of our board; and (h) the potential to contribute to the diversity of our board of directors, as a result of the nominee’s professional background, expertise, gender, age, ethnicity or other diversity criteria.
As illustrated in the matrix below, we believe our board of director nominees possess the professional and personal qualifications and necessary expertise both within and outside of the healthcare industry to maintain a diverse and experienced board of directors that can effectively represent stockholders.
| | Directors | | | Broader Business | | | Healthcare Industry | | |||||||||||||||||||||||||||||||||||||||||||||
| | Capital Allocation / Finance / Accounting | | | Strategic Transactions | | | Risk Management | | | Human Capital | | | Public Company Board | | | Senior Leadership (small biotech) | | | Senior Leadership (large pharma) | | | Customer / Market Insights (patient, payer, physician) | | ||||||||||||||||||||||||||||||
| | Mark Currie, Ph.D. | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | |||
| | Alexander Denner, Ph.D. | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | | | | | | | ✓ | | | | | | | | | | | | | | | | | | | | | |||
| | Andrew Dreyfus | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | | | | | | | | | | | | | | | | | | | ✓ | | | |||
| | Jon Duane | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ✓ | | | |||
| | Marla Kessler | | | | | | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | | | | | | | | | | | | | ✓ | | | | | | ✓ | | | |||
| | Thomas McCourt | | | | | | | | | | | ✓ | | | | | | ✓ | | | | | | | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | |||
| | Julie McHugh | | | | | ✓ | | | | | | ✓ | | | | | | | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | |||
| | Catherine Moukheibir | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | | | | | | | | | | |||
| | Jay Shepard | | | | | ✓ | | | | | | ✓ | | | | | | | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | | | | | | | | | | |||
Board Diversity
We believe our board of directors should be comprised of individuals reflecting the diversity represented by our employees and our patients. As mentioned above under How We are Selected and Evaluated, we have core criteria that we evaluate each board of director nominee on, including but not limited to, the potential to contribute to the diversity of our board of directors, as a result of the nominee’s professional background, expertise, gender, age, ethnicity or other diversity criteria. Three of our elevennine current directors are women, one of whom self-identifies as Middle Eastern. The table below provides additional diversity information regarding our board of directors. Each of the categories listed in the below table has the meaning as it is used in Nasdaq Listing Rule 5605(f).
| | Board Diversity Matrix (as of April 27, 2023) | | ||||||||||||
| | Board Size: | | | | | | | | | | | | | |
| | Total Number of Directors | | | | | | | | | 9 | | | | |
| | Gender Identity: | | | Female | | | Male | | | Non-Binary | | | Did Not Disclose Gender | |
| | Directors | | | 3 | | | 5 | | | | | | 1 | |
| | Demographic Background: | | | | | | | | | | | | | |
| | African American or Black | | | | | | | | | | | | | |
| | Alaskan Native or Native American | | | | | | | | | | | | | |
| | Asian | | | | | | | | | | | | | |
| | Hispanic or Latinx | | | | | | | | | | | | | |
| | Native Hawaiian or Pacific Islander | | | | | | | | | | | | | |
| | White | | | 3 | | | 5 | | | | | | | |
| | Two or More Races or Ethnicities | | | | | | | | | | | | | |
| | LGBTQ+ | | | | | | | | | | | | | |
| | Did Not Disclose Demographic Background | | | | | | | | | 1 | | | | |
| | Board Diversity Matrix (as of April 25, 2024) | | ||||||||||||
| | Board Size: | | | | | | | | | | | | | |
| | Total Number of Directors | | | | | | | | | 9 | | | | |
| | Gender Identity: | | | Female | | | Male | | | Non-Binary | | | Did Not Disclose | |
| | Directors | | | 3 | | | 5 | | | | | | 1 | |
| | Demographic Background: | | | | | | | | | | | | | |
| | African American or Black | | | | | | | | | | | | | |
| | Alaskan Native or Native American | | | | | | | | | | | | | |
| | Asian | | | | | | | | | | | | | |
| | Hispanic or Latinx | | | | | | | | | | | | | |
| | Native Hawaiian or Pacific Islander | | | | | | | | | | | | | |
| | White | | | 2 | | | 5 | | | | | | | |
| | Two or More Races or Ethnicities | | | | | | | | | | | | | |
| | LGBTQ+ | | | | | | | | | | | | | |
| | Did Not Disclose Demographic Background | | | | | | | | | | | | 1 | |
| | Directors who self-identify as Middle Eastern | | | 1 | | | | | | | | | | |
Director Succession Planning
We refresh our board of directors and assess our board succession plans regularly. As of April 27, 2023,25, 2024, the average age of our independent directors was 6162 years, and the average tenure of our independent directors was approximately 4.85.6 years.
Annual Evaluations
Our directors conduct annual evaluations to assess the performance and effectiveness of the board of directors and each committee in which they are a member. In addition, we askmember, as well as to provide an opportunity for each director to complete a self-evaluation as well as a peerprovide an evaluation of eachthe other director.directors. For 2022,2023, directors completed written questionnaires, which solicited open- ended and candid feedback on an anonymous basis, and each director was then provided with their individual evaluation.basis. In addition to the director evaluations, we also solicit annual feedback from senior management concerning the board’s performance on an anonymous basis. After the collective board and committee evaluations and comments (including those from senior management) and the self and peer evaluations andevaluation comments were compiled, the
2024 Proxy Statement 15
board and committee evaluations and comments (including those from senior management) to the governance and nominating committee and full board of directors.
Director Nomination Process
Our governance and nominating committee identifies potential director candidates through referrals and recommendations, including from incumbent directors, management and stockholders, as well as through business and other organizational networks and relationships. We and our board of directors retain executive search firms and other third parties from time to time to assist in finding suitable candidates.
Stockholders who wish to recommend candidates may contact the governance and nominating committee in the manner described in Stockholder Communications, Proposals and Nominations for Directorships — Communications. Stockholder recommended candidates whose recommendations comply with these procedures will be evaluated by the governance and nominating committee in the same manner as candidates identified by the governance and nominating committee.
How We are Organized and Governed
Corporate Governance Highlights
| | Number of Independent Directors/Total Number of Directors | | | 8/9 | |
| | All Board Committees Comprised Solely of Independent Directors | | | ✓ | |
| | Separate Independent Chair and Chief Executive Officer Positions | | | ✓ | |
| | Regular Executive Sessions of Independent Directors | | | ✓ | |
| | Annual Board and Committee | | | ✓ | |
| | Annual Election of All Directors | | | ✓ | |
| | Annual Advisory Stockholder Vote on Executive Compensation | | | ✓ | |
| | Stock Ownership Guidelines for Directors and Executive Officers | | | ✓ | |
| | Comprehensive Code of Business Conduct and Ethics | | | ✓ | |
| | Corporate Governance Guidelines | | | ✓ | |
| | Prohibition of Hedging and Pledging by Executive Officers and Directors | | | ✓ | |
| | Anti-Overboarding Policy Limiting the Number of Other Public Company Boards on which our Directors May Serve | | | ✓ | |
| | Clawback Policy | | | ✓ | |
Board Size and Terms
Our Eleventh Amended and Restated Certificate of Incorporation, as amended, or our Certificate of Incorporation, states that our board of directors shall consist of between one and 15 members, and the precise number of directors shall be fixed by a resolution of our board of directors. Our board of directors currently consists of nine members.
Each director holds office until his or her successor is duly elected and qualified or until his or her death, resignation or removal. Any vacancy on the board of directors, including a vacancy that results from an increase in the number of directors, may be filled by a vote of the majority of the directors then in office.
All of our directors are elected on an annual basis and can be removed with or without cause by our stockholders.
We separate the roles of chair of the board of directors and chief executive officer and rotate the chair approximately every five years, unless the governance and nominating committee recommends otherwise. Our board of directors believes that this structure enhances the board of directors’ oversight of, and independence from, management, and enables the board of directors to carry out its responsibilities on behalf of our stockholders. This leadership structure also allows our chief executive officer to focus his or her time and energy on operating and managing the company, while leveraging the experience and perspective of Ms. McHugh, the current chair of our board of directors. We expect the nextThe governance and nominating committee has determined that Ms. McHugh should continue to serve as chair rotation will take place in 2024.of our board of directors.
Director Independence
Under Nasdaq Rule 5605, a majority of a listed company’s board of directors must be comprised of independent directors. In addition, Nasdaq rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation and governance and nominating committees be independent, and that audit and compensation committee members satisfy the additional independence criteria set forth in Rule 10A-3 and 10C-1, respectively, under
2024 Proxy Statement 17
the Securities Exchange Act of 1934, as amended, or the Exchange Act. Under Nasdaq Rule 5605(a)(2), a director will
only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
Our board of directors determined that none of Messrs. Dreyfus, Duane and Shepard, Mses. Kessler, McHugh and Moukheibir, and Drs. Currie and Denner, representing eight of our nine directors, has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under Nasdaq Rule 5605(a)(2). Mr. McCourt, our chief executive officer, was not determined to be independent due to his employment with the company. Our board of directors also determined that each of the current members of our audit committee, our governance and nominating committee, and our compensation and HR committee satisfies the independence standards for such committee established by Rule 10A-3 and 10C-1 under the Exchange Act, the SEC rules and the Nasdaq rules, as applicable. In making such determinations, our board of directors considered the information requested from and provided by each director concerning the director’s background, employment and affiliations, including family relationships, the relationships that each such non-employee director has with Ironwood and all other facts and circumstances the board of directors deemed relevant in assessing independence. As part of such determination, the board of directors considered the volume of business between BCBSMA, the company in which Mr. Dreyfus served as president and chief executive officer until December 2022, and Ironwood, which amounted to less than 1% of the annual revenues of BCBSMA in 2022, and Dr. Currie’s previous employment as our senior vice president, chief scientific officer and president of R&D until April 2019.
Risk Oversight
Our board of directors retains ultimate responsibility for risk oversight and our management team retains the responsibility for risk management. In carrying out its risk oversight responsibilities, our board of directors reviews the long- and short-term internal and external risks facing the company through its participation in long-range strategic planning, and the annual review and evaluation of corporate risks that the audit committee reports. Our board of directors also believes that separating the roles of chair of the board of directors and chief executive officer enhances the board of directors’ ability to oversee risk in an objective manner.
We have implemented and continue to refine a formalized enterprise risk management process. On an ongoing basis, we identify key 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. Together with our board of directors, we continue to closely monitor the developments and impact of the COVID-19 pandemic on our business and operations, including employees, and work diligently to quickly address and mitigate risks in the evolving and dynamic environment.
On a quarterly basis, key risks, status of mitigation activities and potential new or emerging risks are reported to and discussed with senior management and further addressed with our audit committee and board of directors, as necessary. On at least an annual basis, a long-term comprehensive enterprise risk management update is provided to our board of directors. The long-term goal of our enterprise risk management process is to ingrain a culture of risk awareness and mitigation throughout the organization that can be applied to our current business activities as well as our assessment and pursuit of future business opportunities.
As set forth in its charter, our audit committee discusses with management any significant risks or exposures facing Ironwood, evaluates the steps management has taken or proposes to take to mitigate such risks and reviews our compliance with such mitigation plans. As part of fulfilling these responsibilities, the audit committee meets regularly with Ernst & Young LLP, our independent registered public accounting firm, and members of our management, including our chief executive officer and chief financial officer. Additionally, our audit committee oversees our cybersecurity risk and receives regular reports, with a minimum frequency of once per year, from our Chief Information Officer on various cybersecurity matters, including risk assessments, mitigation strategies, areas of emerging risks, incidents and industry trends and other areas of importance. Our audit committee also discusses with Ernst & Young LLP any significant risks or exposures facing the company to the extent that such risks or exposures relate to accounting and financial reporting and reviews related mitigation plans with Ernst & Young LLP. In addition, our audit committee reviews the risk factors as presented in our annual reports on Form 10-K and our quarterly reports on Form 10-Q, as applicable, that we file with the SEC.
As part of our board of directors’ risk oversight role, our compensation and HR committee reviews and evaluates the risks associated with our compensation programs and succession plans. The compensation and HR committee also is
18 Ironwood
responsible under its charter for approving the compensation of all of our executive officers (other than our chief executive officer), recommending chief executive officer compensation to our board of directors for approval and overseeing the maintenance and presentation to our board of directors of succession plans for members of our senior management. Likewise, our governance and nominating committee is responsible for evaluating the performance, operations and composition of our board of directors and the sufficiency of our corporate governance guidelines, either of which may impact our risk profile from a governance perspective.
In performing their risk oversight functions, each committee of our board of directors has full access to management, as well as the ability to engage outside advisors.
Hedging and Pledging Policy
As part of our insider trading prevention policy, our directors and executive officers are prohibited from engaging in any hedging or monetization transactions of our company securities, including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds. In addition, our insider trading prevention policy generally prohibits our directors and executive officers from holding company securities in a margin account or pledging company securities as collateral for a loan.
Corporate Governance Guidelines
We have adopted corporate governance guidelines which are accessible through the Investors section of our website at www.ironwoodpharma.com, under the heading Corporate Governance — Governance Documents, and which are available in print to any stockholder who requests them from our secretary. Our board of directors believes that sound governance practices and policies provide an important framework to assist it in fulfilling its duties to stockholders and relies on these guidelines to provide that framework. The guidelines help to ensure that our board of directors is independent from management, that our board of directors adequately performs its oversight functions and that the interests of our board of directors and management align with the interests of our stockholders. Among other things, our corporate governance guidelines limit the number of other public company boards on which our directors may serve. Accordingly, our directors should not serve on more than four public company boards of directors, including Ironwood. In addition, our directors who hold the position of chief executive officer of a public company should not serve on more than three public companies,company boards of directors, including Ironwood and the board of his or her own company. Our governance and nominating committee conducts an annual review of director commitment levels, and affirms that as of March 31, 2023,2024, all directors were in compliance with our corporate governance guidelines.
Diversity, Equity and& Inclusion (DE&I)
Creating a diverse, equitable and inclusive culture is essential to attracting, motivating and retaining the talent necessary to deliver on our corporate mission. To establish and maintain this culture, we have a simple vision in mind: to make Ironwood an environment rooted in valuing each employee for who they are.
This begins with ensuring our workforce represents the diverse populations we serve and reflecting our DE&I principles in our employee-related training and policies. As of December 31, 2022,2023, women represented approximately 52%50% of our employee base, 27%20% of our leadership team (vice president and above) and 33% of our board of directors (including our board and audit committee chairs). Additionally, as of December 31, 2022,2023, approximately 18%20% of our employees were racially or ethnically diverse and in 2022,2023, approximately 28%40% of our new hires were racially or ethnically diverse. Our DE&I principles are also reflected in our employee trainingdiverse (excluding Europe-based employees, for which race and policies.ethnicity is not disclosed).
We are focused on fostering an environment where employees feel included and empowered. This approach includes DE&I initiatives such as learning and development opportunities, strengthened talent acquisition strategies, the support of equality programs in our local communities, and a renewed focus on retention and career advancement of diverse populations. We are alsowere proud to have five strong and growing DE&I employee resource groups:groups during 2023: (1) W@IRWD (Women at Ironwood), designed to empower, develop, and sponsor women at Ironwood, (2) ISHINE (Ironwood Sponsoring Historically Black Colleges and Universities Student Internships Nurturing Excellence), which draws undergraduate candidates from Historically Black Colleges and Universities and exposes students to careers in the healthcare field,
(3) ISTAR (Ironwood Stands Together Against Racism), which was created in response to racial equality movements and
2024 Proxy Statement 19
our employees’ drive to take action, (4) PRIDE@IRWD, which seeks to foster LGBTQ+ visibility for all Ironwood employees and raise awareness about the current workplace and social issues that affect the LGBTQ+ community, and (5) IMPACT (Ironwood Makes Positive Advances in our Communities Together), which offers a space for bettering our communities and engaging deeper with one another.
In 2022,2023, we continued to advance our DE&I initiatives with strong advocacy from our leadership team and board of directors.
We are committed to furthering our DE&I efforts consistent with our long-term DE&I strategy, we adopted in 2020, including by incorporating a DE&I scorecard reflecting ten measurable objectivesmetrics into our corporate goals. As in prior years, our board of directors has again approved a specific DE&I corporate goal for 2023 of achieving at least six out of the ten pre-determined objectives on the company’s 2023 DE&I scorecard.
Board Meetings
Our board of directors held fivenine meetings during 2022.2023. As stated in our corporate governance guidelines, we expect our directors to rigorously prepare for, attend and participate in all board and applicable committee meetings. Each director 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 directors will attend our annual meeting of stockholders unless a director will not be continuing to serve on the board following such annual meeting. In 2022,2023, 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 directors at the time of our 20222023 annual meeting of stockholders were present at the meeting.
Committees
Our board of directors has established three standing committees: an audit committee, a governance and nominating committee and a compensation and HR committee. Each of the audit committee, the governance and nominating committee and the compensation and HR committee operates under a charter approved by our board of directors. Copies of each charter are accessible through the Investors section of our website at www.ironwoodpharma.com, under the heading Corporate Governance — Governance Documents, and are available in print to any stockholder who requests them from our 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
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. Shepard.
Ms. Moukheibir chairs the audit committee, and 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. Our audit committee met four times during 2022.2023. 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, the quality and adequacy of our internal controls and internal auditing procedures, including any material weaknesses or significant deficiencies;
•
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
20 Ironwood
exposures facing the company to the extent that such risks or exposures relate to accounting and financial reporting and related mitigation plans;
•
monitoring our internal control over financial reporting and disclosure controls and procedures;
•
reviewing and assessing the adequacy of the company’s information technology systems, processes, controls and data and periodically (but no less than annually), reviewing and assessing with management and internal auditors the company’s assessment of risks from cybersecurity threats, the adequacy of the information security program for the company’s information technology systems, processes and data;
•
working with management to formulate a mitigation plan and reviewing the company’s compliance, as well as ensuring compliance with any external regulatory or disclosure requirements, with such mitigation plan in the event of a significant breakdowncybersecurity incident or security breach affecting the information technology systems of the company or a third party;the company’s data;
•
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, 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.
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, 2022,2023, (ii) discussed with Ernst & Young LLP, the company’s independent registered public accounting firm, the matters required to be discussed by the applicable 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 PCAOB 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, 20222023 for filing with the SEC.
By the Audit Committee, Catherine Moukheibir, Chair Julie McHugh Jay Shepard |
Governance and Nominating Committee
The members of our governance and nominating committee are Dr. Denner, Mr. Duane and Ms. McHugh. Dr. Denner chairs the governance and nominating committee. Our governance and nominating committee met threetwo times during 2022.2023.
Our governance and nominating committee’s responsibilities include:
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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;
•
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- profitfor-profit company.
Compensation and HR Committee
The members of our compensation and HR committee are Dr. Currie, Messrs. Dreyfus and Duane and Ms. Kessler. Mr. Dreyfus chairs our compensation and HR committee. Our compensation and HR committee met six times during 2022.2023. 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, and oversees matters related to human capital management, including DE&I, workplace environment and culture and talent development and retention.
Our compensation and HR committee’s responsibilities include:
•
evaluating the performance of our chief executive officer and other executive officers in light of pre-determined corporate goals and objectives relevant to the chief executive officer’s or such executive officer’s compensation;
•
reviewing and recommending to the board our chief executive officer’s 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 executive officer compensation (other than for the chief executive officer), 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 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 and any stock ownership guidelines applicable to non-employee directors;
•
reviewing, approving and overseeing any stock ownership guidelines applicable to executive officers;
•
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;
•
making recommendations to our board of directors with respect to management succession planning, including planning with respect to our chief executive officer;
•
overseeing compliance with applicable laws and regulations affecting employee compensation and benefits, including regarding stockholder approval of certain executive compensation matters;
•
overseeing, reviewing and recommended to the board of directors for approval of any “clawback” or recoupment policy of the company for recovering incentive-based compensation and monitoring compliance therewith;
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reviewing the risks associated with our compensation policies and practices; and
•
overseeing the company’s strategies and policies related to human capital management, including with respect to matters such as DE&I, workplace environment and culture, and talent development and retention.
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 our executive officers serve, or in the past fiscal year has served, as a member of the board of directors or compensation and HR 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 Our Board is Paid
Under our second amended and restated 2019 non-employee director compensation policy, effective January 1, 2023,2024, or the director compensation policy,Director Compensation Policy, the 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. If a director ceases serving as a member of our board of directors at any time during the vesting period of a restricted stock award, or RSA, unvested shares will be forfeited on the date of such director’s termination of service. Shares of restricted stock granted to directors in 2022 under our director compensation policy wereDirector Compensation Policy are granted under our Amended and Restated 2019 Equity Incentive Plan, or our Amended 2019 Plan. Under our Amended 2019 Plan, the aggregate value of all compensation paid or granted to any non-employee director for his or her service as a director in any calendar year may not exceed $600,000.
Under our director compensation policy,Director Compensation Policy, at each annual meeting of stockholders, our non-employee directors are granted restricted shares of our Class A common stock, with the number of shares subject to the award equal to $250,000 divided by 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.
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 the number of shares subject to the award equal to $250,000 divided by 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. In addition, under our director compensation policy,Director Compensation Policy, if a non-employee
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director is elected other than at an annual meeting of our stockholders, then upon his or her initial election to 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 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- employeenon-employee director began service with us. Such restricted shares will vest in full on the date immediately preceding the date of the next annual meeting of stockholders.
In addition to equity grants, each non-employee director receives an annual retainer under our director compensation policyDirector 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:
| | | | | Fees | |
| | Annual retainer for members of the board of directors | | | $50,000 ($ | |
| | Additional annual retainer for members of the audit committee | | | $ | |
| | Additional annual retainer for members of the compensation and HR committee | | | $10,000 ($20,000 for the chair) | |
| | Additional annual retainer for members of the governance and nominating committee | | | $5,000 ($10,000 for the chair) | |
(1)
Following a competitive assessment of market data related to non-executive director compensation provided by Human Capital Solutions, Aon, or Aon, our compensation consultant at the time, the compensation and HR committee recommended, and the board approved, to amend and restate our prior amended and restated Director Compensation Policy, to increase, effective January 2024, the annual retainer for the board chair from $80,000 to $85,000, and the additional annual retainers for the members of the audit committee and for the audit committee chair from $10,000 to $11,000, and from $20,000 to $25,000, respectively.
All cash fees are payable quarterly in arrears and will be prorated for any quarter of partial service. Each non-employee director may elect, prior to January 1 of the year with respect to which such election will be effective, to receive fully vested shares of our Class A common stock at no cost in lieu of his or her annual cash retainer and any additional cash retainers for board chair, committee or committee chair service set forth above. The number of shares of our Class A common stock issued is determined by dividing the applicable cash retainer(s) the director would be eligible to receive by the closing price of our Class A common stock on the Nasdaq Global Select Market (or the stock exchange on which our stock is being actively traded) on the date the cash fees would otherwise be paid, rounded down to the nearest whole share. Further, non-employee directors are reimbursed for reasonable travel and other expenses incurred in connection with attending meetings of the board of directors and its committees.
Director Compensation Table
The following table sets forth information regarding the compensation earned during the year ended December 31, 20222023, by each of our directors who served in 2022,2023, other than Mr. McCourt, who does not receive compensation for his service on our board of directors. Dr. Olanoff and Mr. Owens were not nominated for election at the 2022 annual meeting of stockholders.
| | Name | | Fees Earned or Paid in Cash ($) | | Stock Awards ($)(1) | | All Other Compensation ($) | | Total ($) | | Name | | Fees Earned or Paid in Cash ($) | | All Other Stock Awards ($)(1) | | Compensation ($) | | Total ($) | | ||||||||||||||||||||||||||||||||
| | Mark Currie, Ph.D. | | | $ | 54,368 | | | | $ | 242,027 | | | | | — | | | | $ | 296,395 | | | Mark Currie, Ph.D. | | | $ | 60,000 | | | | $ | 240,710 | | | | | — | | | | $ | 300,710 | | | ||||||||
| | Alexander Denner, Ph.D. | | | $ | 57,875(2) | | | | $ | 242,027 | | | | | — | | | | $ | 299,902 | | | Alexander Denner, Ph.D. | | | $ | 59,976(2) | | | | $ | 240,710 | | | | | — | | | | $ | 300,686 | | | ||||||||
| | Andrew Dreyfus | | | $ | 65,000 | | | | $ | 242,027 | | | | | — | | | | $ | 307,027 | | | Andrew Dreyfus | | | $ | 70,000 | | | | $ | 240,710 | | | | | — | | | | $ | 310,710 | | | ||||||||
| | Jon Duane | | | $ | 62,500 | | | | $ | 242,027 | | | | | — | | | | $ | 304,527 | | | Jon Duane | | | $ | 65,000 | | | | $ | 240,710 | | | | | — | | | | $ | 305,710 | | | ||||||||
| | Marla Kessler | | | $ | 57,500 | | | | $ | 242,027 | | | | | — | | | | $ | 299,527 | | | Marla Kessler | | | $ | 60,000 | | | | $ | 240,710 | | | | | — | | | | $ | 300,710 | | | ||||||||
| | Julie McHugh | | | $ | 95,000 | | | | $ | 242,027 | | | | | — | | | | $ | 337,027 | | | Julie McHugh | | | $ | 95,000 | | | | $ | 240,710 | | | | | — | | | | $ | 335,710 | | | ||||||||
| | Catherine Moukheibir | | | $ | 69,989(3) | | | | $ | 242,027 | | | | | — | | | | $ | 312,016 | | | Catherine Moukheibir | | | $ | 69,978(3) | | | | $ | 240,710 | | | | | — | | | | $ | 310,688 | | | ||||||||
| | Lawrence Olanoff, M.D., Ph.D. | | | $ | 25,055 | | | | | — | | | | $ | 750(4) | | | | $ | 25,805 | | | Jay Shepard | | | $ | 60,000 | | | | $ | 240,710 | | | | | — | | | | $ | 300,710 | | | ||||||||
| | Edward Owens | | | $ | 25,055 | | | | | — | | | | | — | | | | $ | 25,055 | | | ||||||||||||||||||||||||||||||
| | Jay Shepard | | | $ | 60,000 | | | | $ | 242,027 | | | | | — | | | | $ | 302,027 | | | ||||||||||||||||||||||||||||||
(1)
On June 1, 2022,20, 2023, each non-employee member of our board of directors received a restricted stock grant in the amount of 21,57122,350 shares of our Class A common stock for service on our board of directors from the date of our 20222023 annual meeting of stockholders to the date of our 20232024 annual meeting of stockholders, which shares will vest in full on the date immediately preceding the date of our 20232024 annual meeting of stockholders, subject to continued service on our board as of the vesting date. The number of shares subject to the restricted stock grant was determined by dividing (i) $250,000 by (ii) $11.59,$11.19, which was the average closing price of our Class A common stock on the Nasdaq Global Select Market for the six months preceding the month of the 20222023 annual meeting of stockholders. Each such award of restricted stock had a grant date fair value of $11.22$10.77 per share and was granted pursuant to the terms of our director compensation policyprior amended and restated Director Compensation Policy, which was in effect from January 1, 2023 to December 31, 2023, and our 2019 Equity Plan. As of December 31, 2022,2023, each non-employee director other than Dr. Denner and Mr. Shepard held 21,57122,350 restricted shares of Class A common stock as a result of this grant and held no other unvested equity awards. As of December 31, 2022, Dr. Denner and Mr. Shepard held 29,879 restricted shares and 29,813 restricted shares, respectively, of Class A common stock as a result of this and other previously issued grants. Dr. Olanoff and Mr. Owens did not receive a restricted stock grant on June 1, 2022, as they were not nominated for election at the 2022 annual meeting of stockholders. Neither Dr. Olanoff nor Mr. Owens held any restricted shares of Class A common stock as of December 31, 2022.
Amounts in the table represent the fair value of these restricted stock grants on the date of grant calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation, or ASC 718. For a discussion of the assumptions used in the valuation of awards made in 2022,2023, see Note 1213 to our consolidated financial statements for the year ended December 31, 20222023 included in our Annual Report on Form 10-K that we filed with the SEC on February 16, 2023.2024. All values reported exclude the effects of potential forfeitures.
(2)
Dr. Denner elected to receive this annual retainer in unrestricted shares of our Class A common stock. Dr. Denner received a total of 4,9925,942 shares of our Class A common stock for such service in 2022.2023.
(3)
Ms. Moukheibir elected to receive this annual retainer in unrestricted shares of our Class A common stock through March 31, 2022. Ms. Moukheibir elected to receive this annual retainer in cash from April 1, 2022 through December 31, 2022.stock. Ms. Moukheibir received a total of 1,4666,933 shares of our Class A common stock for such service in 2022.2023.
Director Stock Ownership Guidelines
We have instituted stock ownership guidelines as part of our director compensation policyDirector Compensation Policy 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 were required to achieve this level of ownership by the later of (a) January 1, 2023 (twoMay 30, 2021 (the date which was two years from the effective date of the amended and restated director compensation policy)our 2019 annual meeting of stockholders) and (b) two years from the date the individual began service with us,became a non-employee director, or the Ownership Date.
Compliance with the stock ownership requirements is measured on the date of the annual meeting of stockholders based on the annual retainer then in effect. Following the Ownership Date, until a non-employee director holds the required ownership level (or 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
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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. As of March 31, 2023,2024, each of our non-employee directors was in compliance with our stock ownership guidelines.
We believe our stock ownership guidelines 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.
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Proposal No. 1
Election
of Directors
of Directors
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Proposal No. 1
Our board of directors has nominated all of our nine current directors — Drs. Currie and Denner, Messrs. Dreyfus, Duane, McCourt and Shepard and Mses. Kessler, McHugh and Moukheibir — for election at the 20232024 annual meeting of stockholders. Each of Drs. Currie and Denner, Messrs. Dreyfus, Duane, McCourt and Shepard and Mses. Kessler, McHugh and Moukheibir 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 of directors.
Vote Required
The election of the board of director nominees will be determined by a plurality of the votes cast, meaning that board of director nominees with the greatest number of votes cast for election, even if less than a majority, will be elected as directors to serve for one year and until his or her successor is 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.
Our Executives
Who We Are
The following table sets forth certain information, as of April 27, 2023,25, 2024, with respect to each of our executive officers, other than Mr. McCourt, whose biographical information is included elsewhere in this proxy statement under the caption Our Board of Directors:
| | Name | | | Age | | | Position(s) | |
| | Andrew Davis | | | | | Senior Vice President, Chief Business Officer | | |
| | Sravan Emany | | | | | Senior Vice President, Chief Financial Officer | | |
| | John Minardo | | | | | Senior Vice President, Chief Legal Officer and Secretary | | |
| | Michael Shetzline, M.D., Ph.D. | | | 65 | | | ||
Senior Vice President, Chief Medical Officer and Head of Research and Drug Development | |
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ANDREW DAVIS Senior Vice President, Chief Business Officer of Ironwood Pharmaceuticals, Inc. Age: Joined Ironwood 2021 | | | • Andrew Davis has served as our chief business officer since December • Before joining Ironwood, Mr. Davis served as the chief business development andM&A officer at iNova Pharmaceuticals from September 2017 to May 2021, leading allcompany transactions and acting as a member of the executive management team.Prior to iNova, Mr. Davis was head of oncology business development for Merck & Co.from November 2016 to September 2017. Before his time at Merck, Mr. Davis was atBausch Health Companies (formerly Valeant Pharmaceuticals), where he held roles ofincreasing responsibility within the business development function, ultimatelyserving as senior vice president of business development and leading all transactionsfor the company, including the acquisitions of Salix Pharmaceuticals and Bausch +Lomb. Mr. Davis began his career as an analyst at McKinsey & Co., where his workfocused on the healthcare space. • Mr. Davis serves on the board of directors of UTILITY therapeutics Ltd. • Mr. Davis holds a B.A. in economics from Boston University. | |
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SRAVAN EMANY Senior Vice President, Chief Financial Officer of Ironwood Pharmaceuticals, Inc. Age: Joined Ironwood 2021 | | | • Mr. Emany has served as our chief financial officer since December 2021. • Prior to joining Ironwood, Mr. Emany served as corporate vice president, commercial excellence and chief strategy officer of Integra LifeSciences Holdings Corporation, a publicly held global healthcare company, since March 2020 and as vice president of strategy, treasury and investor relations from February 2018 to March 2020. Prior to that, Mr. Emany served in various mergers and acquisitions investment banking roles at Bank of America and BofA Securities (formerly Bank of America Merrill Lynch) from September 2008 to February 2018, culminating in his service as managing director in the mergers and acquisitions group where he led numerous mergers and acquisitions in the healthcare sector. Mr. Emany also served in various other financial roles, including with Goldman Sachs Group and Morgan Stanley. • Mr. Emany serves on the board of directors of Assertio Holdings, Inc. (Nasdaq: ASRT). • Mr. Emany holds a B.A. in international relations from The Johns Hopkins University and an M.A. in international relations and international economics from The Johns Hopkins School of Advanced International Studies. | |
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JOHN MINARDO Senior Vice President, Chief Legal Officer and Secretary of Ironwood Pharmaceuticals, Inc. Age: Joined Ironwood 2021 | | | • Mr. Minardo has served as our chief legal officer since August 2021. • Prior to joining Ironwood, Mr. Minardo was with Seqirus, a pharmaceutical company, where he was vice president, general counsel and a member of the Seqirus executive leadership team, leading a global legal team overseeing activities including business transactions, regulatory matters, corporate governance, compliance and intellectual property from November 2015 to July 2021. Prior to Seqirus, Mr. Minardo was with Novartis in increasing roles of responsibility from October 2007 to November 2015, ultimately serving as vice president, general counsel and chief compliance officer at Novartis Influenza Vaccines. Mr. Minardo started his legal career as a litigator at Kaye Scholer LLP. • Mr. Minardo holds a B.A. from Boston College and a J.D. from Brooklyn Law School. | |
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MICHAEL SHETZLINE, M.D., Ph.D. Senior Vice President, Chief Medical Officer and Head of Research and Drug Development of Ironwood Pharmaceuticals, Inc. Age: Joined Ironwood 2019 | | | • Dr. Shetzline has served as our chief medical officer, and head of research and drug development since October 2021 and had served as chief medical officer, and head of drug development from January 2019 to October 2021. Dr. Shetzline is a gastroenterologist and internist, with more than • Before joining Ironwood, Dr. Shetzline was vice president and head of gastroenterology clinical sciences at Takeda Pharmaceuticals International Co., or Takeda, a global pharmaceutical company, where he led global clinical development for all GI assets from January 2015 to January 2019. • Prior to Dr. Shetzline’s role at Takeda, Dr. Shetzline served as vice president and global head of gastroenterology at Ferring International Pharmascience Center U.S., Inc., or Ferring, from 2012 to January 2015, during which he led Ferring’s clinical development programs in gastroenterology. Before that, Dr. Shetzline was vice president and global program head crossing multiple therapeutic areas and head of translational medicine GI discovery at Novartis Pharmaceuticals AG from 2002 to 2012. • Dr. Shetzline also served as gastroenterology program director and assistant professor of medicine at Duke University Medical Center from 1997 to 2002. Dr. Shetzline has published over 40 full papers and book chapters and acted as a reviewer for a range of medicine journals. • Dr. Shetzline earned his M.D. and Ph.D. from The Ohio State University in physiology and medicine. Dr. Shetzline completed his internal medicine residency and fellowship in gastroenterology and served on the faculty as a National Institutes of Health supported physician scientist at Duke University Medical Center. • Dr. Shetzline is a Fellow of the American College of Physicians, the American College of Gastroenterology, and the American Gastroenterological Association and certified by the American Board of Internal Medicine. | |
Executive Compensation
Compensation Discussion and Analysis
Executive Summary
Our executive compensation program for 20222023 remained aligned with market practice and our corporate performance, which created a strong link between the value of our executives’ compensation toand our stockholders’ returns. Together with thisthe objective of linking executive and stockholder interests, our compensation program is also designed to attract, retain, motivate and reward outstanding talent across Ironwood through well-communicated programs that are aligned with our vision and mission, and support a positive company culture and our values. The three primary elements of our executive officer compensation program are base salary, cash bonus and long-term equity incentive compensation. Long-term equity incentive compensation, which includes a balanced mix of time-based and performance-based equity awards, represents a significant percentage of each named executive officer’s target total direct compensation.compensation (as defined below). We believe this emphasis on equity strongly reinforces the concept of pay-for-performance, as the single largest component of pay is tied to execution of key performance milestones and future increases in the value of our stock.
The majority of total direct compensation, which we define as base salary, target annual bonus and target long-term equity incentive compensation, for our named executive officers during 20222023 consisted of variable pay elements, as reported in the Summary Compensation Table included elsewhere in this proxy statement. We believe this allocation aligns with our pay-for-performance compensation philosophy of motivating our named executive officers to achieve our performance objectives in the short term and to grow the business to create sustainable value for our shareholders in the long term.
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Stockholder Engagement and Say-On-Pay Vote Consideration
Feedback from stockholders is an essential part of our executive compensation decision-making process. We value stockholders’ perspectives and have a regular process throughout the year to discuss a range of topics with our stockholders, including our strategy, operations, financial and business performance. Discussions with our stockholders assist us in setting goals and expectations for our performance and facilitate the identification of emerging issues that may affect our strategies, corporate governance, compensation practices, and other aspects of our operations. Our company engages with many of our largest stockholders on a frequent basis year-round. This includes investor conferences, investor events, and one-on-one discussions. We invite feedback on a wide variety of topics, including corporate strategy, capital allocation, governance, human capital management and executive compensation.
Our stockholders also have the opportunity to cast a non-binding advisory vote on named executive officer compensation, or a “say-on-pay” vote, and this year, also to express their preference for the frequency of future say-on-pay votes.every year. This allows our stockholders to provide us with regular, timely and direct input on our executive compensation philosophy, policies and practices. We believe this enables us to further align our compensation programs with our stockholders’ interests and to enhance our ability to consider stockholder feedback as part of our annual compensation review process. We sought stockholder input on our executive compensation program through the say-on-pay vote at our 20222023 annual meeting of stockholders and approximately 97%98% of votes cast by our stockholders voted in support of our named executive officer compensation. In addition, the last time we sought stockholder input with respect to the say-on-pay frequency vote was at our 2017 annual meeting of stockholders, and over 98% of votes cast by our stockholders voted in support of an annual advisory say-on-pay vote.
Named Executive Officers: Goals and Accomplishments
Named Executive Officers for 20222023
This section discusses the principles underlying our policies and decisions with respect to the compensation of our executive officers who are named in the Summary Compensation Table, or our named executive officers. Provided below are material factors we believe are relevant to an analysis of these policies and decisions. Our named executive officers for 20222023 were:
•
Thomas McCourt, chief executive officer;
•
Sravan Emany, senior vice president, chief financial officer;
•
Andrew Davis, senior vice president, chief business officer;
•
John Minardo, senior vice president, chief legal officer and secretary;
•
Michael Shetzline, M.D., Ph.D., senior vice president, chief medical officer and head of research and drug development.
Goals and Accomplishments
In December 2021,early 2023, our board, with input from senior management, established our 2023 corporate performance goals for 2022,and the relative weighting of such goals, the achievement of which we believed would further the accomplishment of our short- and long-term business plan. These goals included maximizing LINZESS net sales growth as well as the attainment of certain financial and pipeline targets, in each case, based on the Company’scompany’s board-approved operating plan for 2022. In February 2022,2023, as well as goals related to our compensationworkforce, strategy and HR committee approved the relative weighting of our corporate performance goals for 2022 compensation programs.culture.
Our named executive officers were evaluated based on the level of achievement of the 20222023 corporate goals and their achievements against their 20222023 individual goals. Performance measured against the 20222023 corporate and individual goals (as applicable) was used, in part, in determining salary adjustments and cash bonus awards for our named executive officers in early 2023.2024.
As described in more detail elsewhere in this proxy statement under Compensation Determination Process, our board is responsible for assessing the Company’scompany’s performance against its pre-determined corporate goals. In January 2023,2024, our board determined that the 20222023 company performance achievement multiplier, which was used as a key consideration in determining executive compensation awarded for 20222023 performance, was 75%120%.
34 Ironwood
The level of achievement against our 20222023 corporate performance goals, as determined by our board in early 2023,2024, was as follows:
| | | | | Performance Targets (Weights) | | | | | |||||||||
| | Company Goal | | | Not Achieved | | | Partially Achieved | | | Target | | | Over Achieved | | | Results | |
| | MAXIMIZE LINZESS | | | | | | | | | | | | | | | | |
| | LINZESS U.S. Net Sales | | | $≤1,009M | | | $1,016M | | | $1,040M | | | $>1,056M | | | $1,002M(1) | |
| | | | | (0%) | | | (20%) | | | (30%) | | | (40%) | | | (0%) | |
| | Advance Linaclotide Pediatric Program | | | Specific goals are not disclosed for competitive reasons | | | Above Target(2) | | |||||||||
| | | | | (0%) | | | (3%) | | | (5%) | | | (10%) | | | (10%) | |
| | BUILD INNOVATIVE PIPELINE | | | | | | | | | | | | | | | | |
| | Secure 1 asset aligned with prioritized criteria | | | Specific goals are not disclosed for competitive reasons | | | Below Target(3) | | |||||||||
| | | | | (0%) | | | (10%) | | | (15%) | | | (20%) | | | (10%) | |
| | Initiate IW-3300 POC study in IC / BPS by the fourth quarter of 2022 | | | Specific goals are not disclosed for competitive reasons | | | Below Target(4) | | |||||||||
| | | | | (0%) | | | (5%) | | | (8%) | | | (11%) | | | (0%) | |
| | Advance CNP-104 study | | | Specific goals are not disclosed for competitive reasons | | | Below Target(5) | | |||||||||
| | | | | (0%) | | | (6%) | | | (10%) | | | (16%) | | | (0%) | |
| | STRENGTHEN FINANCIAL PROFILE | | | | | | | | | | | | | | | | |
| | Revenue | | | $≤414M | | | $420M | | | $425M | | | $>430M | | | $411M(6) | |
| | | | | (0%) | | | (3%) | | | (5%) | | | (7%) | | | (0%) | |
| | Adjusted EBITDA from organic business (excluding the impact of any corporate development transactions) | | | $≤234M | | | $235M | | | $250M | | | $>275M | | | $252M(7) | |
| | | | | (0%) | | | (10%) | | | (20%) | | | (25%) | | | (20%) | |
| | CREATE GREAT PLACE TO WORK | | | | | | | | | | | | | | | | |
| | Achieve at least 7 out of 10 objectives on the corporate EDI scorecard | | | ≤5/10 | | | 6/10 | | | 7/10 | | | 10/10 | | | 7/10(8) | |
| | | | | (0%) | | | (1%) | | | (2%) | | | (5%) | | | (2%) | |
| | Increase understanding of and confidence in Ironwood’s strategy and culture, measured by >70% positive response rate on annual employee engagement survey | | | <60% | | | 60% | | | 70% | | | 80% | | | 72%(9) | |
| | | | | (0%) | | | (1%) | | | (3%) | | | (5%) | | | (3%) | |
| | | | | | | | | | | | | | TOTAL | | | 45% | |
| | | | | Adjusted Company Performance Achievement Multiplier | | | 75% | | |||||||||
| | Company Goal | | | Partially Achieved | | | Target | | | Over Achieved | | | Results | |
| | MAXIMIZE LINZESS (30%) | | | | | | | | | | | | | |
| | LINZESS U.S. Net Sales | | | $1,022M | | | $1,051M | | | $>1,070M | | | $1,073M(1) | |
| | Achieve U.S. FDA approval of sNDA for pediatric patients ages 6-17 years old with FC | | | Specific goals are not disclosed for competitive reasons | | | Above Target(2) | | ||||||
| | Commercial launch target date of LINZESS for pediatric patients ages 6-17 years old with FC as measured by a launch scorecard | | | Specific goals are not disclosed for competitive reasons | | | Above Target(3) | | ||||||
| | | | | (20%) | | | (30%) | | | (40%) | | | (40%) | |
| | BUILD INNOVATIVE PIPELINE (30%) | | | | | | | | | | | | | |
| | Secure 1 asset aligned with prioritized criteria | | | Specific goals are not disclosed for competitive reasons | | | Above Target(4) | | ||||||
| | Achieve CNP-104 enrollment target | | | Specific goals are not disclosed for competitive reasons | | | Target(5) | | ||||||
| | Achieve IW-3300 enrollment target | | | Specific goals are not disclosed for competitive reasons | | | Below Target(6) | | ||||||
| | | | | (20%) | | | (30%) | | | (50%) | | | (35%) | |
| | STRENGTHEN FINANCIAL PROFILE (35%) | | | | | | | | | | | | | |
| | Adjusted EBITDA from organic business (excluding the impact of any corporate development transactions and costs associated with a potential CNP-104 option exercise) | | | $235M | | | $250M | | | $>260M | | | $268M(7) | |
| | | | | (30%) | | | (35%) | | | (40%) | | | (40%) | |
| | CREATE GREAT PLACE TO WORK (5%) | | | | | | | | | | | | | |
| | Achieve a certain number of objectives on the corporate DEI scorecard | | | Committee judgment on actual performance | | | Specified Number | | | N/A | | | Target(8) | |
| | Maintain confidence in Ironwood’s strategy and culture, measured by positive response rate range on annual employee engagement survey | | | Committee judgment on actual performance | | | >50% | | | N/A | | | Target(9) | |
| | | | | | | | (5%) | | | | | | (5%) | |
| | | | | | | | | | | TOTAL | | | 120% | |
Notes to 20222023 Company Performance Targets and Results Table
(1)
Goal was below target.exceeded. LINZESS U.S. net sales were $1,002$1,073 million for the year ended December 31, 2022.2023. LINZESS U.S. net sales are reported by our U.S. partner, AbbVie.
(2)
Goal exceeded. In September 2022, we announced positive topline data from a Phase III clinical trial evaluating linaclotide 72 mcg in pediatric patients aged 6-17 with functional constipation. The trial met its primary and secondary endpoints, demonstrating that linaclotide 72 mcg improved frequency of spontaneous bowel movements and stool consistency. In December 2022, we and our U.S. partner, AbbVie, submitted an sNDA toJune 2023, the U.S. FDA seeking approval ofapproved LINZESS as a new indication of LINZESSonce-daily treatment for FC in pediatric patients agedages 6-17 years.years old with functional constipation, making LINZESS the first and only FDA-approved prescription therapy for functional constipation in this patient population. Specific target thresholds are not disclosed for competitive reasons.
(3)
Goal exceeded. Specific details and target thresholds are not disclosed for competitive reasons.
(4)
Goal exceeded. In June 2023, we completed a tender offer to purchase 98% of the outstanding ordinary shares of VectivBio Holding AG. In December 2023, we completed a squeeze-out merger to acquire all remaining shares. Specific target thresholds are not disclosed for competitive reasons.
(5)
Goal achieved. Specific details and target thresholds are not disclosed for competitive reasons.
(6)
Goal was below target. Specific details and target thresholds are not disclosed for competitive reasons.
(7)
Goal achieved.exceeded. Our adjusted EBITDA, which was $252 million for the year ended December 31, 2022. Adjusted EBITDA is calculated by subtracting mark-to-market adjustments on derivatives related to Ironwood’s 2.25% convertible notes due 2022 Convertible Notes, restructuring expenses, net interest expense, interest and investment income income tax expense andtaxes, depreciation and amortization, and acquisition-related costs, from GAAP net income.income, was ($884.8) million for the year ended December 31, 2023. When excluding from adjusted EBITDA the impact of corporate development activities in 2023, which include all profit and loss incurred by VectivBio subsequent to the VectivBio acquisition, and the payment recognized in the second quarter of 2023 in connection with the amendment of the COUR Collaboration Agreement, our adjusted EBITDA from our organic business was $267.6 million for the year ended December 31, 2023.
(8)
Goal achieved. Over the course of the year, we succeeded in attaining our corporate target of achieving 7 out of 10 pre-determined EDI objectives.
(9)
Goal achieved. The overall engagement score in our annual employee engagement survey was 72%.
In support of the 20222023 corporate goals identified above, our compensation and HR committee assigned a specific subset of individual goals for each of our named executive officers as described below.
| Name | | | Summary of Individual Goals | |
| Thomas McCourt | | | • Board and Investor Relations: Engage with the board of directors to align strategic and operational objectives to optimize the value of the company. Engage with shareholders, analysts, and potential shareholders to convey the potential value of the company and associated risks and ultimately foster stock price growth. • Strategic Opportunities: Lead the assessment of strategic opportunities and champion efforts where appropriate to drive corporate value. Drive the successful integration of VectivBio into Ironwood to optimize value. • Operational Performance: Lead and motivate the business towards the accomplishment of the • Talent & Leadership: Continue to strengthen the effectiveness of the executive leadership team, providing opportunities to advance their professional development and enhance team dynamics. Serve as the cultural champion of the organization. | |
| Sravan Emany | | | • • Investor Relations: Engage with the board of directors, shareholders, analysts, and potential shareholders to convey the potential value of the company and associated • • • Finance Leadership: Oversee and develop the Finance function to ensure appropriate controls are in place over financial reporting and effective management of • IT and Facilities: Assume oversight of the Information Technology, or IT, and Facilities functions, including reassessing capabilities, risk, and investment to support operations and potential business development transactions. | |
| Andrew Davis | | | • Corporate Strategy: Lead efforts towards a well-defined and executed corporate strategy. Ensure the board of directors and company leadership are aligned on objectives. Continually evaluate potential alternatives and adaptations, factoring the degrees of success with various initiatives. • LINZESS Revenue and Life-Cycle Management: Lead the • Commercial Leadership: Strengthen leadership of the Commercial function, ensuring proactive ownership, communication, and engagement in growth strategies and tactics. Maintain and build a relationship with our U.S. partner, AbbVie. | |
36 Ironwood
| Name | | | Summary of Individual Goals | |
| | | | • Corporate Development Leadership: Lead the Corporate Development function in identifying, assessing, and closing on strategic initiatives to expand our product portfolio. Ensure proper prioritizing of opportunities, robust diligence and valuation work, negotiation of terms, and completion of transactions. • | |
| John Minardo | | | • • Corporate Risk Review: Partner with the board of directors and senior leadership to identify and mitigate organizational risks and minimize corporate exposure through effective legal counsel that balances or achieves business objectives and reduces opportunities for claims against Ironwood. • Corporate Development and Strategy: Lead the legal assessment of potential proposed transactions. Advise management and the project team on business risks inherent in the transaction, including intellectual property matters and mitigate risks to the extent possible through agreement negotiations and drafting. Lead the legal structuring and closing of transactions. • VectivBio Integration: Lead the effort to complete the public transaction of the acquired business. Improve the contracting process by incorporating VectivBio business to minimize disruption to the business. Build capabilities to support foreign operations. • Strengthen the leadership of the Legal team: Appropriately align and develop our legal capabilities in corporate governance, contracts, SEC filings, intellectual property, employee matters, public disclosures and corporate compliance. • DE&I Champion: Guide the DE&I Council, adding new perspectives to the dialogue. Co-lead the Reverse Mentorship Program and engage with our employee resource groups. |
| | |||
| Michael Shetzline, M.D., Ph.D. | | | • LINZESS Life-Cycle Management: Lead • • GI Pipeline Expansion: • • Strengthen leadership of the R&D function: Develop talent in the research and drug development | |
In early 2023,2024, Mr. McCourt evaluated the individual performance in 20222023 of each of the named executive officers (other than himself), and provided feedback and made recommendations to our compensation and HR committee. The compensation and HR committee then determined the named executive officers’ compensation, taking into account
2024 Proxy Statement 37
Ironwood’s level of achievement of its 20222023 corporate goals as determined by our board; the factboard, that each named executive officer exceeded or achieved performance expectations for 2022,2023, and peer group and other market data from the competitive assessment undertaken by our compensation and HR committee’s independent compensation consultant, Human Capital Solutions, Aon,Alpine Rewards, LLC, or Aon,Alpine, as discussed below.
Additional information on the basis for decisions about 20222024 compensation relating to our named executive officers is available throughout this section and elsewhere in this proxy statement under the captions Role of the Compensation and HR Committee and Role of the Compensation Consultant: Benchmarking and Peer Group Analysis.
Compensation Decisions for 20222023
Named Executive Officer Compensation Program
As in prior years, the three primary elements of our executive compensation program for 20222023 were base salary, cash bonus and long-term equity incentive compensation.
Base salaries are determined at an executive’s commencement of employment and are generally re-evaluated annually and adjusted, if warranted, to realign salaries with market levels or in connection with promotions or other changes in role and to reflect the performance of the named executive officer. In determining whether to adjust or recommend an adjustment to a named executive officer’s base salary, our compensation and HR committee takes into
consideration factors such as our corporate performance in prior years, general economic factors and compensation parity among our named executive officers, as well as the abilities, performance and experience of the named executive officer. Our compensation and HR committee also reviews our named executive officers’ past compensation at the company and market data. In addition, our compensation and HR committee recommends, and our board approves, compensation determinations for our chief executive officer. Please see Role of the Compensation and HR Committee and Role of the Compensation Consultant: Benchmarking and Peer Group Analysis for further information.
In March 2022,February 2023, our compensation and HR committee reviewed and approved 20222023 base salaries for our named executive officers for 2022,2023, except for Mr. Emany, due to his joining the company in December 2021, and for Mr. McCourt whose base salary is reviewed and recommended by our compensation and HR committee and approved by the independent directors of our board of directors. In March 2022,2023, following a recommendation by our compensation and HR committee, the independent directors of our board of directors approved Mr. McCourt’s 20222023 base salary. The increases in base salary for Messrs. McCourt, MinardoEmany, Davis and RickardMinardo and Dr. Shetzline were based on our compensation and HR committee’s (and the board of directors’, in the case of Mr. McCourt) determination that each executive officer achieved or exceeded substantially all of his respective individual goals for 2021. These2022. In May 2023, the compensation and HR committee approved an additional increase to Mr. Emany’s 2023 base salary from $520,000 to $545,000 in recognition of the additional workload Mr. Emany would be assuming in connection with the elimination of the company’s chief operating officer role. The base salary determinations also took into account peer group and other market data from the competitive assessment conducted by Aon, our compensation consultant at the time, and discussed in more detail below. Base salary information for 20222023 compared to base salary information for 20212022 for each of our named executive officers is as follows:
| | Named Executive Officer | | 2021 Base Salary | | 2022 Base Salary | | Increase ($) | | Increase (%) | | Named Executive Officer | | 2022 Base Salary | | 2023 Base Salary | | Increase ($) | | Increase (%) | | ||||||||||||||||||||||||||||||||
| | Thomas McCourt | | | $ | 775,000 | | | | $ | 806,000 | | | | $ | 31,000 | | | | | 4.0% | | | Thomas McCourt | | | $ | 806,000 | | | | $ | 834,210 | | | | $ | 28,210 | | | | | 3.5% | | | ||||||||
| | Sravan Emany* | | | $ | 500,000 | | | | $ | 500,000 | | | | $ | 0 | | | | | 0% | | | Sravan Emany | | | $ | 500,000 | | | | $ | 545,000(1) | | | | $ | 45,000 | | | | | 9.0% | | | ||||||||
| | John Minardo | | | $ | 475,000 | | | | $ | 494,000 | | | | $ | 19,000 | | | | | 4.0% | | | Andrew Davis | | | $ | 460,000 | | | | $ | 480,000 | | | | $ | 20,000 | | | | | 4.3% | | | ||||||||
| | Jason Rickard | | | $ | 500,000 | | | | $ | 520,000 | | | | $ | 20,000 | | | | | 4.0% | | | John Minardo | | | $ | 494,000 | | | | $ | 512,728 | | | | $ | 18,728 | | | | | 3.8% | | | ||||||||
| | Michael Shetzline, M.D., Ph.D. | | | $ | 484,000 | | | | $ | 513,040 | | | | $ | 29,040 | | | | | 6.0% | | | Michael Shetzline, M.D., Ph.D. | | | $ | 513,040 | | | | $ | 533,562 | | | | $ | 20,522 | | | | | 4.0% | | | ||||||||
In May 2023, the compensation and HR committee approved an additional increase to Mr. Emany’s 2023 base salary was not changed for 2022 as partfrom $520,000 to $545,000 in recognition of the Company’s 2021 performance review cycle as he joinedadditional workload Mr. Emany would be assuming in connection with the company in December 2021.elimination of the company’s chief operating officer role.
38 Ironwood
Annual Cash Incentive Program for 20222023 Performance
Our annual cash incentive program, or ACIP or cash bonus award, is designed to reward the achievement of our annual corporate goals and individual goals. The program is also intended to foster and support our performance-driven culture by setting clear, high-value goals, rewarding outstanding performers and making sure our employees know clearly that we value their contributions. Each target bonus award, expressed as a percentage of an executive’s base salary, is determined annually and is based on the extent to which we achieved our corporate goals for the preceding year, the executive’s individual performance in that year against his or her individual goals as well as peer group and other market data. Target bonus percentages for 20222023 for each of our named executive officers, which were unchanged from the respective target bonus percentages for 2021,2022, are as follows:
| | Named Executive Officer | | | (as a % of base salary) | | |||
| | Thomas McCourt | | | | | 75% | | |
| | Sravan Emany | | | | | 50% | | |
| | Andrew Davis | | | | | 50% | | |
| | John Minardo | | | | | 45 | ||
| | | |||||||
| | Michael Shetzline, M.D., Ph.D. | | | | | 45% | | |
We believe that these target bonus percentages align the target total cash compensation, as defined below, of our named executive officers with that of our peers, place appropriate emphasis on the achievement of our annual performance objectives and facilitate recruiting, retaining, and motivating our executive officers.
For each of our named executive officers, other than our chief executive officer, 70% of each 20222023 cash bonus award was based solely on the achievement of our corporate goals and 30% was based on the named executive officer’s achievement of his individual goals as described above, and our corporate goals. In recommending for approval by the board the amount of Mr. McCourt’s 20222023 cash bonus, our compensation and HR committee determined to set Mr. McCourt’s individual performance in 20222023 to be equal to the company’s performance factor of 75%120%. The board reviewed and followed this recommendation in approving Mr. McCourt’s cash bonus award for 20222023 performance.
The following table summarizes the calculation of our named executive officers’ cash bonus awards, other than for our chief executive officer. Mr. McCourt’s 20222023 cash bonus was calculated by multiplying his target bonus percentage (75%) by the corporate performance factor, as noted above.
| | Component Calculation | | |||||||||||||||||||||||||||
| | Company Performance Only Component (Weighted 70%) | | | 70% Weighting | | | × | | | Target Bonus | | | × | | | Corporate Performance Achievement Multiplier | | | = | | | Company Performance Only Component Payout | | ||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | + | |
| | Company and Individual Performance Component (Weighted 30%) | | | 30% Weighting | | | × | | | Target Bonus | | | × | | | Corporate Performance Achievement Multiplier | | | × | | | Individual Performance Achievement Multiplier | | | = | | | Company and Individual Performance Payout | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total Annual Bonus Payout | |
| | |||||||||||||||||||||||||||||
This approach was intended to closely align cash bonus award payouts with the achievement of our corporate goals, while taking into account individual performance (or, in the case of Mr. McCourt, equating company performance with
2024 Proxy Statement 39
individual performance) and making bonus determinations in a transparent way. As described above, the company performance achievement multiplier for 20222023 was 75%120%. In February 20232024, our compensation and HR committee, determined that each of our named executive officers (other than Mr. McCourt, whose individual performance was equated with company performance) achieved or exceeded pre-established individual goals for 2022,2023, resulting in the following individual performance achievement multipliers and bonus ratios to target bonus percentage (after applying the 70%/30% weighting and taking into account the company performance achievement multiplier of 75%120%).The compensation and HR committee then reviewed and approved (or, in the case of Mr. McCourt, recommended that the board approve, which recommendation was followed by the board) the following bonuses for 20222023 performance for our named executive officers:
| | Named Executive Officer | | Individual Performance | | Actual Bonus to Target Bonus Ratio | | Annual Cash Incentive Program for 2022 Performance | | Named Executive Officer | | Individual Performance | | Actual Bonus to Target Bonus Ratio | | Annual Cash Incentive Program for 2023 Performance | | ||||||||||||||||||||||||
| | Thomas McCourt | | | | 75%(1) | | | | | 75% | | | | $ | 453,375 | | | Thomas McCourt | | | | 120%(1) | | | | | 120% | | | | $ | 750,780 | | | ||||||
| | Sravan Emany | | | | 120% | | | | | 80% | | | | $ | 198,750 | | | Sravan Emany | | | | 135% | | | | | 133% | | | | $ | 361,335 | | | ||||||
| | John Minardo | | | | 100% | | | | | 75% | | | | $ | 166,725 | | | Andrew Davis | | | | 140% | | | | | 134% | | | | $ | 322,560 | | | ||||||
| | Jason Rickard | | | | 125% | | | | | 81% | | | | $ | 209,625 | | | John Minardo | | | | 110% | | | | | 124% | | | | $ | 284,929 | | | ||||||
| | Michael Shetzline, M.D., Ph.D. | | | | 130% | | | | | 82% | | | | $ | 188,735 | | | Michael Shetzline, M.D., Ph.D. | | | | 125% | | | | | 129% | | | | $ | 309,733 | | | ||||||
(1)
As described above, our compensation and HR committee also recommended, and our board determined that Mr. McCourt’s individual performance achievement multiplier was 75%120% on the basis that such multiplier was equal to the corporate performance achievement multiplier of 75%120%.
Long-term equity incentive compensation granted in 20222023 represented, on average, approximately 73%70% of each named executive officer’s total compensation for the year (based on the grant date fair value of equity awards, with performance-based restricted stock unit, or PSU, awards measured at target). We believe this emphasis on equity, and particularly performance-based equity, strongly reinforces the principle of “pay for performance” and closely ties our executives’ pay outcomes to stockholder value creation. We also use equity awards as our incentive vehicle for long-term compensation to attract, reward and retain our named executive officers and to align the interests of our named executive officers with those of stockholders. We typically grant equity awards in the first quarter of each year based on our performance in the prior year.
Throughout the year, our compensation and HR committee may award additional equity grants as circumstances warrant. Our compensation and HR committee does not apply a rigid formula in allocating equity awards to our named executive officers as a group or to any particular named executive officer, but setsfor 2023 set an equity pool each year based on peer group and other market data from the Aona competitive assessment prepared by its compensation consultant as discussed below. In addition to peer group and market data, our compensation and HR committee also considers other factors, including input from Aonits compensation consultant and the amount of unvested equity held by a named executive officer, in determining the size of individual equity awards.
In early 2022, our2023, the compensation and HR committee determined that the annual long-term equity incentive compensation awards for our named executive officers should consist of an approximately even number of PSUs and restrictedRSUs. For PSUs, the compensation and HR committee further determined that performance under our PSU awards should be measured against total shareholder return, or TSR, using absolute TSR (50%), or aTSR, and relative TSR (50%), or rTSR, performance metrics in order to tie further the compensation of our named executive officers to stockholder value creation and hold our executives accountable for our stock units, or RSUs.price performance. The compensation and HR committee chosefurther determined that the three-year performance period for the 2023 PSUs should start on March 1, 2023 and end on February 28, 2026. This change to how the performance period is measured (relative to PSUs granted in prior years, in which the performance period aligned with the calendar year) will enable both performance metrics to take into account current financial information through the most recent fiscal year-end, as well as any changes in
40 Ironwood
financial guidance that may have affected the stock price of the company and the rTSR peer group companies throughout the performance period.
The 2023 PSUs use the following metrics, weighting and vesting opportunity:
| | Performance Metric | | | Weight | | | Performance Period | | | Threshold | | | Target | | | Above Target | | | Maximum | |
| | 2023 aTSR PSUs | | | 50% | | | Three years ending February 28, 2026 | | | 50% attainment: 30 calendar-day average closing share price of $13.23 or above | | | 100% attainment: 30 calendar-day average closing share price of $13.80 or above | | | 200% attainment: 30 calendar-day average closing share price of $15.53 or above | | | 400% attainment: 30 calendar-day average closing share price of $17.25 or above | |
| | 2023 rTSR PSUs(1) | | | 50% | | | Three years ending February 28, 2026 | | | 50% attainment: rTSR at the 25th percentile compared to rTSR peer group through February 2026 | | | 100% attainment: rTSR at the 50th percentile compared to rTSR peer group through February 2026 | | | N/A | | | 200% attainment: rTSR at the 75th percentile compared to rTSR peer group through February 2026 | |
(1)
If the TSR percentile rank falls between Threshold, Target or Maximum goals, the percentage of rTSR PSUs earned shall be interpolated on a straight-line basis. Attainment for the 2023 rTSR PSUs is capped at 100% where the company’s TSR is negative.
At the time they were designated, the peer group companies selected for the 2023 rTSR PSUs consisted of commercial pharmaceutical and biotechnology companies that ranged between $750 million and $10 billion in market capitalization; Ironwood’s 30-day market value capitalization as of December 31, 2022, was at the 47th percentile relative total shareholder return, orto this custom peer group. Our compensation and HR committee approved the following custom rTSR measurement peer group for the 2023 rTSR PSUs, which included all of our executive compensation peers:
2024 Proxy Statement 41
| | ACADIA Pharmaceuticals, Inc. (Nasdaq: ACAD) | | | Insmed, Inc. (Nasdaq: INSM) | |
| | ADMA Biologics (Nasdaq: ADMA) | | | Intercept Pharmaceuticals, Inc. (Nasdaq: ICPT) | |
| | Alkermes plc (Nasdaq: ALKS) | | | Ionis Pharmaceuticals, Inc. (Nasdaq: IONS) | |
| | Amicus Therapeutics, Inc. (Nasdaq: FOLD) | | | Kiniksa Pharmaceuticals, Ltd. (Nasdaq: KNSA) | |
| | Apellis Pharmaceuticals, Inc. (Nasdaq: APLS) | | | Ligand Pharmaceuticals Incorporated (Nasdaq: LGND) | |
| | Arcus Biosciences, Inc. (Nasdaq: RCUS) | | | Myriad Genetics, Inc. (Nasdaq: MYGN) | |
| | Arrowhead Pharmaceuticals, Inc. (Nasdaq: ARWR) | | | Natera, Inc. (Nasdaq: NTRA) | |
| | Avid Bioservices, Inc. (Nasdaq: CDMO) | | | Novavax, Inc. (Nasdaq: NVAX) | |
| | BioCryst Pharmaceuticals, Inc. (Nasdaq: BCRX) | | | Organogenesis Holdings Inc. (Nasdaq: ORGO) | |
| | Blueprint Medicines Corporation (Nasdaq: BPMC) | | | Pacira BioSciences, Inc. (Nasdaq: PCRX) | |
| | Catalyst Pharmaceuticals, Inc. (Nasdaq: CPRX) | | | PTC Therapeutics, Inc. (Nasdaq: PTCT) | |
| | Coherus BioSciences, Inc. (Nasdaq: CHRS) | | | REGENXBIO Inc. (Nasdaq: RGNX) | |
| | Corcept Therapeutics Incorporated (Nasdaq: CORT) | | | Supernus Pharmaceuticals, Inc. (Nasdaq: SUPN) | |
| | Cytokinetics, Inc. (Nasdaq: CYTK) | | | Syndax Pharmaceuticals, Inc. (Nasdaq: SNDX) | |
| | Deciphera Pharmaceuticals (Nasdaq: DCPH) | | | Travere Therapeutics, Inc. (Nasdaq: TVTX) | |
| | Denali Therapeutics, Inc. (Nasdaq: DNLI) | | | Vanda Pharmaceuticals Inc. (Nasdaq: VNDA) | |
| | Dynavax Technologies Corporation (Nasdaq: DVAX) | | | Veracyte, Inc. (Nasdaq: VCYT) | |
| | Exact Sciences Corporation (Nasdaq: EXAS) | | | Vericel Corporation (Nasdaq: VCEL) | |
| | Exelixis, Inc. (Nasdaq: EXEL) | | | Vir Biotechnology, Inc. (Nasdaq: VIR) | |
| | FibroGen, Inc. (Nasdaq: FGEN) | | | Xencor Inc. (Nasdaq: XNCR) | |
| | Halozyme Therapeutics, Inc. (Nasdaq: HALO) | | | | |
In March 2023, our named executive officers were granted RSUs and PSUs, in each case under our 2019 Plan. RSUs granted in 2023, other than for our chief executive officer, vest as to 25% of the underlying shares on each approximate anniversary of the grant date of the award, subject to continued employment on each vesting date, which is the vesting schedule typically used for RSU awards granted to employees. RSUs granted in 2023 to Mr. McCourt vest as to 33.3% of the underlying shares on each approximate anniversary of the grant date of the award, subject to his continued employment on each vesting date. As described above, the 2023 PSU awards are subject to aTSR and rTSR performance goals, and are measured over a three-year performance period ending February 28, 2026.
42 Ironwood
The RSUs and PSUs granted to our named executive officers in March 2023 were as follows:
| | Named Executive Officer | | | 2023 Annual PSU Grant (# of Shares of Class A common stock Subject to PSUs) (at target) | | | 2023 Annual RSU Grant (# of Shares of Class A common stock Subject to RSUs) | | ||||||
| | Thomas McCourt | | | | | 240,594 | | | | | | 240,595 | | |
| | Sravan Emany | | | | | 74,235 | | | | | | 74,236 | | |
| | Andrew Davis | | | | | 74,325 | | | | | | 74,236 | | |
| | John Minardo | | | | | 65,502 | | | | | | 65,502 | | |
| | Michael Shetzline, M.D., Ph.D. | | | | | 69,869 | | | | | | 69,869 | | |
In making its determinations with respect to the size of the equity awards granted to each of our named executive officers, our compensation and HR committee took into account peer group and other market data from the Aon competitive assessment discussed below, as well as other factors including each executive’s current equity holdings, expected future contributions and retention.
In February and March 2024, our compensation and HR committee certified that, with respect to the 2023 aTSR PSUs, the achievement of the “threshold” and “target” company share price targets, as specified in the 2023 PSUs metrics table above, were satisfied, resulting in 50% and 100% attainment, respectively, of the 2023 aTSR PSUs performance metric. Additional 2023 aTSR PSUs may vest upon the achievement of the additional stock price vesting targets specified above during the performance period ending February 28, 2026.
2021 rTSR PSUs Payout
In early 2021, our compensation and HR committee chose rTSR performance as the sole PSU performance metric in our 20222021 executive equity compensation program to further tie the compensation of our named executive officers to stockholder value. Aon assistedvalue, as described in our 2022 proxy statement filed with the compensation and HR committee with identifying a peer group specifically for purposes of the rTSR measurement goal used for PSUs granted in 2022, or the 2022 rTSR PSUs.SEC on April 21, 2022.
The 20222021 rTSR PSUs usehad the following performance metricmetrics and vesting opportunities:
| | Performance Metric | | | Performance Period | | | Threshold Goals (50% attainment) | | | Target Goals (100% attainment) | | | Stretch Goals (200% attainment) | |
| | | | ending December 31, | | | rTSR at the | | | rTSR at the | | | rTSR at the | |
(1)
Attainment for the 20222021 rTSR PSUs is capped at 100% where the Company’s total stockholder return is negative.
| | Named Executive Officer | | | 2022 Annual PSU Grant (# of Shares of Class A common stock Subject to PSUs) (at target) | | | 2022 Annual RSU Grant (# of Shares of Class A common stock Subject to RSUs) | | ||||||
| | Thomas McCourt | | | | | 248,868 | | | | | | 248,869 | | |
| | Sravan Emany* | | | | | 0 | | | | | | 0 | | |
| | John Minardo | | | | | 67,873 | | | | | | 67,873 | | |
| | Jason Rickard | | | | | 90,497 | | | | | | 90,498 | | |
| | Michael Shetzline, M.D., Ph.D. | | | | | 81,447 | | | | | | 81,448 | | |
| | Performance Metric | | | Weight | | | Performance Period | | | Threshold Goals (50% attainment) | | | Target Goals (100% attainment) | | | Stretch Goals (200% attainment) | | | Payout | | | Weighted Payout | |
| | NDA Acceptance PSUs | | | 40% | | | Three-year performance period ending December 31, 2022 | | | N/A | | | Acceptance by the U.S. FDA of an NDA for IW-3718 or other internal or external development program | | | Acceptance by the U.S. FDA of two NDAs, including IW-3718 and/or other internal or external development programs | | | 0% | | | 0% | |
| | Adjusted EBITDA PSUs(1) | | | 30% | | | 2020 — 2021 Cumulative Target | | | $266 million | | | $296 million | | | $355 million | | | 200% | | | 60% | |
| | 2020 rTSR PSUs(2) | | | 30% | | | Three-year performance period ending December 31, 2022 | | | rTSR at the 25th percentile compared to rTSR peer group through 2022 | | | rTSR at the 50th percentile compared to rTSR peer group through 2022 | | | rTSR at the 75th percentile compared to rTSR peer group through 2022(3) | | | 100% | | | 30% | |
| | Weighted Average Payout: | | | 90% | | ||||||||||||||||||
In January 2022,2024, our compensation and HR committee certified that, with respect to the Adjusted EBITDA PSUs, the achievement of cumulative adjusted organic EBITDA for the performance period, which ended on December 31, 2021 was $467 million, resulting in a 200% attainment of this performance metric.
Executive Severance Agreements and Benefits in the Event of a Change of Control
The severance arrangements that we have with our named executive officers, as well as other benefits provided in the event of a change of control, are described elsewhere in this proxy statement under the captions Named Executive Officer Severance Arrangements and Benefits in the Event of a Change of Control and Potential Payments Upon Termination or Change of Control. Severance benefits are only payable if the named executive officer has complied with all of our rules and policies, has executed a separation agreement that includes a release of claims and complies with his or her post-employment nondisclosure, noncompetition and non-solicitation obligations. We believe that
2024 Proxy Statement 43
offering these payments and benefits assists us in recruiting, retaining and motivating executive officers, facilitates the operation of our business, allows our named executive officers to better focus their time, attention and capabilities on our business, and provides for a clear and consistent approach to managing departures with mutually understood separation benefits.
Other Compensation
We maintain broad-based benefits, including health insurance, life and disability insurance, dental insurance, transportationremote work and well-being stipends, commuter subsidies (for employees who reside in Massachusetts and neighboring states) and fitness stipends,, and a 401(k) plan with a matching contribution equal to the greater of: (a) 100% of employee contributions on the first 3% of eligible compensation and 50% of employee contributions on the next 3% of eligible compensation; or (b) 75% of the first $10,000 of employee contributions.
Other than our broad-based benefits, or as otherwise described herein, none of our named executive officers receive perquisites of any nature.
Compensation Decisions for 20232024
In February 2023,2024, our compensation and HR committee reviewed and approved 20232024 base salaries for our named executive officers, except for Mr. McCourt, whose base salary is reviewed and recommended by our compensation and HR committee and approved by the independent directors of our board of directors. In March 2023,2024, following a recommendation by our compensation and HR committee, the independent directors of our board of directors approved Mr. McCourt’s base salary. The increases in base salary for our named executive officers were based on our compensation and HR committee’s (and the board of directors’, in the case of Mr. McCourt) determination that each executive officer achieved or exceeded substantially all of his respective individual goals for 2022.2023. These base salary determinations also took into account peer group and other market data from the competitive assessment conducted by AonAlpine and discussed in more detail below. Base salary information for 20232024 compared to base salary information for 20222023 for each of our named executive officers, is as follows:
| | Named Executive Officer | | | 2023 Base Salary | | | 2024 Base Salary | | | Increase ($) | | | Increase (%) | | ||||||||||||
| | Thomas McCourt | | | | $ | 834,210 | | | | | $ | 867,568 | | | | | $ | 33,358 | | | | | | 4.0% | | |
| | Sravan Emany | | | | $ | 545,000 | | | | | $ | 569,525 | | | | | $ | 24,525 | | | | | | 4.5% | | |
| | Andrew Davis | | | | $ | 480,000 | | | | | $ | 510,000 | | | | | $ | 30,000 | | | | | | 6.3% | | |
| | John Minardo | | | | $ | 512,728 | | | | | $ | 531,745 | | | | | $ | 19,017 | | | | | | 3.7% | | |
| | Michael Shetzline, M.D., Ph.D. | | | | $ | 533,562 | | | | | $ | 557,572 | | | | | $ | 24,010 | | | | | | 4.5% | | |
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