UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
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☐ | Preliminary Proxy Statement | |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
☒ | Definitive Proxy Statement | |
☐ | Definitive Additional Materials | |
☐ | Soliciting Material Under Rule 14a-12 |
Myriad Genetics, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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MYRIAD GENETICS, INC.
‘‘At our core we are a genetics and information company. Our goal is to empower patients, as consumers, and their physicians and our payer partners with the data to help guide treatment decisions, improve clinical outcomes and lower healthcare costs. As we look forward, we are confident we can deliver on our mission to be a trusted advisor, and the opportunity to transform our business, and strategically position Myriad Genetics for sustainable growth and profitability.’’
Paul J. Diaz, President and CEO, Myriad Genetics
October 12, 201715, 2020
Dear Stockholders,Stakeholders,
You are cordially invited to attend the 2017 Annual Meeting of Stockholders ofFrom its beginning 29 years ago, Myriad Genetics Inc. (the “Annual Meeting”) to be held at 9:00 a.m. MST on Thursday, November 30, 2017, at our offices at 320 Wakara Way, Salt Lake City, Utah. Details regarding the meeting,has been in the business of improving and saving lives by unlocking the power of genetics and precision medicine. We empower patients with the information they need to be conducted,take control of their own health and information aboutwellness, and healthcare professionals with data-driven genetic insights to better diagnose, treat and prevent disease. Our purpose is clear and our mission has never been more relevant than it is today. This ability to proactively impact patients, and accelerate the transition to a healthcare system that is patient-centered, and focused on prevention and early detection is what compelled me to join Myriad Genetics. It is a passion shared by my 2,700 Myriad teammates around the world.
Market trends
The challenges and pressures on our current healthcare system reinforce the opportunity for Myriad Genetics Inc.to play a meaningful role in transforming healthcare and precision medicine, building on our long-standing record of innovation and leadership in women’s health, oncology and neuroscience.
These trends include:
- | Accelerating shifts in consumer engagement, early detection, home-based care models, telemedicine and virtual care |
- | Dramatic changes and disruption in the way outpatient care is delivered in the wake of the COVID-19 pandemic, coupled with broadened awareness of the vital role of diagnostic testing |
- | Expanding access to clinical-grade, genetic solutions for underserved populations with increased focus on disparities in healthcare outcomes and access for challenged communities |
- | Growth in personalized medicine and the interest in new partnership models to advance companion diagnostics and serve patients with specific treatments based on their own genetic makeup and biology. |
Business Opportunity
These market trends create new opportunities to position Myriad Genetics, and our products and services, for growth and commercial success through enhanced customer service levels and a stronger alignment of our value proposition with physicians and payers. Patient safety, quality, and service excellence are paramount. We are committed to creating a superior end-to-end experience in everything we do, making it easier for patients, physicians, and our payer partners to do business with us. We also believe that by leveraging our R&D and technology capabilities and commercial platform we can improve our go-to-market strategies and more quickly adapt to evolving customer preferences and market dynamics.
There are also meaningful ways for Myriad Genetics to improve its financial position, by reducing complexity and cost, and extending our commercial reach. We will embrace a growth mindset as we drive efficiency and productivity and focus our efforts on markets and products where we can lead. Finally, we are committed to developing a more disciplined approach to allocating our human and financial capital to drive growth and improve our investors’ return on invested capital.
Altogether, we have a powerful thesis for transformation and growth. The development of a comprehensive plan to improve our commercial capabilities and reset our base is underway, incorporating a range of external perspectives, industry best practices and internal learnings. Our initial focus will span sales, marketing, pricing, reimbursement and related areas. I look forward to sharing our future strategic vision as plans progress.
Business Highlights and Proposed Enhancements to Corporate Governance
The fiscal year ended June 30, 2020, was one of significant change for Myriad Genetics, its Board of Directors, its business, and the world at large. Before the COVID-19 pandemic hit the U.S., the company already was facing headwinds to its business operations and was starting to overcome these challenges. The pandemic created new hurdles beginning in the spring of 2020, including a worldwide economic contraction and severe disruption to the molecular diagnostics industry.
But the company is emerging from these setbacks, and I am excited to share with you should consider whena few examples of steps we have taken to improve our operations and governance as we accelerate growth:
- | Leadership Changes: Our new Board Chair Louise Phanstiel and I are humbled at the reception and support we have received from our teammates and shareholders after taking on our new roles. Over the last eight weeks I have been impressed by the dedication of our leadership team and employees who are deeply committed to our mission, open to change, and willing to challenge the way we do things. |
- | Board Composition: Following the Annual Meeting, Myriad’s Board of Directors will be very different from the Board of just 16 months ago. In that time span, the company will have added six new directors, changed the Board Chair, changed one critical committee chair, expanded the responsibility of one committee, and completely redefined another. As of December 4, 2020, two thirds of the Board will be new directors, introducing new perspectives and skills while retaining the experience and continuity of longer-tenured directors. At the same time, we have improved the diversity of our Board in a meaningful way. |
- | Corporate Governance: We have engaged actively with our shareholders, heard their feedback and have begun to address their concerns. The resulting actions include a change from plurality to majority voting for directors, instituting a retirement age for directors, and changing our fiscal year end from a June 30th to a calendar fiscal year end to better align with industry standards. |
- | Executive Compensation: To help spur our recovery from COVID-19 and other headwinds, we have refocused our executive compensation on financial metrics that better align management incentives with shareholder interests. For example, equity granted as long-term incentive compensation will comprise 50% performance shares, with the company’s performance on earnings per share and relative total shareholder return driving the number of shares ultimately awarded to each executive. In addition, the Short Term Bonus plan now will be more heavily weighted to financial goals, including Core Operating Revenue (40%) and Adjusted Operating Income (30%), with the balance tied to specific goals aligned with our transformation plan. |
- | Business Highlights: Fiscal year 2020 was challenging due to the impact of the hereditary cancer coding transition and COVID-19 pandemic. Based on our response and implementation of cost saving measures, we still were able to generate positive free cash flow in the fiscal year. This year we crossed an important milestone and have now served over 5 million patients worldwide. Additionally, we achieved a number of other important business milestones, including: |
○ | New coverage for our GeneSight test by UnitedHealthcare, the largest commercial payer in the country. |
○ | American College of Rheumatology guidelines supporting Vectra as an accepted disease activity measure. |
○ | National Comprehensive Cancer Network guidelines for Prolaris for unfavorable intermediate and high-risk patients. |
○ | Publication of new utility data showing the clinical importance of expanded carrier screening. |
○ | New initiatives and resources to strengthen the Myriad brand and digital marketing, including a refresh of our corporate homepage www.myriad.com and other websites. |
○ | Formed Myriad’s first Diversity, Equity and Inclusion Resource Group to promote an inclusive workplace that fosters diverse perspectives. |
As we move beyond the COVID-19 pandemic, given recent catalysts and future opportunities, we believe we are well positioned to return to growth and profitability.
Annual Shareholders Meeting
I sincerely hope you vote your shares are describedwill participate in this proxy statement.
At the Annual Meeting, three personsShareholders Meeting. The following actions will be electedproposed to our Board of Directors. We also will seek stockholder approval (i) of our proposed 2017 Employee, Director and Consultant Equity Incentive Plan; (ii) to re-approve our 2013 Executive Incentive Plan, as amended (IRC section 162(m) plan); and (iii) to ask stockholders to ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending June 30, 2018. In addition, we will seek stockholder approval, on an advisory basis, of the compensation of our named executive officers, as disclosed in this proxy statement, and on the frequency of holding an advisorycompany for their vote on the compensation of our named executive officers. to:
1. | Elect three Class III directors to the Board of Directors to serve until the Annual Meeting of Stockholders in 2023; |
2. | Approve a proposed amendment to our 2017 Employee, Director and Consultant Equity Incentive Plan, as amended, to replenish the share pool for equity incentive grants; |
3. | Ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the six-month transition period ending December 31, 2020 (the interim period before commencing our new calendar fiscal year on January 1, 2021); and |
4. | Approve, on an advisory basis, the compensation of our named executive officers, as disclosed in the proxy statement. |
The Board of Directors recommends the approval of all of these proposals, and a vote for a frequency of holding an annual advisory vote on the compensation of our named executive officers every year. Otherother business will be transacted that may be properly addressed during the Annual Meeting.
Under SecuritiesMyriad Genetics is a purpose-driven organization committed to its mission to improve and Exchange Commission rules that allow companiessave lives by unlocking the power of genetics while delivering value to furnish proxy materialsall of its stakeholders. This mission is even more meaningful and relevant today than it was at the founding of our company 29 years ago. On behalf of the entire Myriad team, thank you for your continued support. We look forward to stockholdersworking diligently over the Internet, we have electednext year to deliver our proxy materials to the majority of our stockholders in this manner. We believe this process will facilitate the accelerated delivery of proxy materials, save costs and reduce the environmental impact of our Annual Meeting. On or about October 12, 2017, we began sending our stockholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access the proxy statement for our 2017 Annual Meeting of Stockholders and our 2017 annual report on Form 10-K to stockholders. The Notice also provides instructions on how to vote online or by telephone and how to receive a paper copy of the proxy materials by mail.
We hope you will be able to attend the Annual Meeting. Whether you plan to attend the meeting or not, it is importantreward that you cast your vote. You may vote over the Internet as well as by telephone. In addition, if you requested printed proxy materials, you may vote by completing, signing, dating and returning your proxy card by mail. You are urged to vote promptly in accordancesupport with the instructions provided in the Notice of Internet Availability of Proxy Materials or on your proxy card. We encourage you to vote by proxy so that your shares will be represented and voted at the meeting, whether or not you attend.superior company performance.
Sincerely, |
Paul J. Diaz |
President and Chief Executive Officer |
Your vote is important. Please vote as soon as possible by using the Internet or by telephone or, if you received a paper copy of the proxy card by mail, by completing, signing, dating, and returning the enclosed proxy card. Instructions for your voting options are described on the Notice of Internet Availability of Proxy Materials or proxy card.
MYRIAD GENETICS, INC.
320 Wakara Way
Salt Lake City, Utah 84108
NOTICE OF 20172020 ANNUAL MEETING OF STOCKHOLDERS
TIME: 9:00 a.m. MST
DATE: Thursday, November 30, 2017
PLACE: The offices of Myriad Genetics, Inc., 320 Wakara Way, Salt Lake City, Utah 84108
PURPOSES:
TIME: 8:00 a.m. MST DATE: Friday, December 4, 2020 PLACE: This year’s Annual Meeting will be a virtual meeting via live webcast on the Internet. You will be able to attend the Annual Meeting, vote and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/MYGN2020 and entering the 16-digit control number included in the Notice of Internet Availability or proxy card that you receive. For further information about the virtual annual meeting, please call our investor relations department at (801) 584-1143. | PURPOSES: 1.To elect three Class III directors to the Board of Directors to serve |
2. | To approve |
3.To ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the six-month transition period ending December 31, 2020 (the interim period before commencing our new calendar fiscal year |
4.To approve, on an advisory basis, the compensation of our named executive officers, as disclosed in this proxy statement; |
5.To transact such other business that is properly presented at the Annual Meeting and any adjournments or postponements thereof. |
WHO MAY VOTE:
You may vote if you were an owner of record of Myriad Genetics, Inc. common stock at the close of business on October 4, 2017.7, 2020. A list of stockholders of record will be available atfor inspection online during the Annual Meeting at www.virtualshareholdermeeting.com/MYGN2020 and, during the 10 days prior to the meeting, at the office of the Secretary at the above address.Myriad Genetics, Inc., 320 Wakara Way, Salt Lake City, Utah 84108.
All stockholders are cordially invited to attend the Annual Meeting. Whether you plan to attend the meeting or not, please vote by following the instructions on the Notice of Internet Availability of Proxy Materials that you have previously received, or will shortly receive, which we refer to as the Notice, or in the section of this proxy statement entitled “Important‘‘Important Information About the Annual Meeting and Voting — How—How Do I Vote?”’’ or, if you requested printed proxy materials, your proxy card. You may change or revoke your proxy at any time before it is voted.
On or about October 12, 2017,15, 2020, we began sending the Notice of Internet Availability of Proxy Materials to all stockholders entitled to vote at the annual meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Benjamin G. Jackson
Secretary
October 12, 201715, 2020
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
THE STOCKHOLDER MEETING TO BE HELD ON NOVEMBER 30, 2017DECEMBER 4, 2020
This proxy statement and our annual report on Form 10-K to stockholders for the fiscal year ended June 30, 20172020 are available for viewing, printing, and downloading atwww.proxyvote.com. . To view these materials, please have available your 12-digit16-digit control number(s) that appears on your Notice or proxy card. On this website, you can also elect to receive future distributions of our proxy statements and annual reports to stockholders by electronic delivery.
Additionally, you may find a copy of our annual report on Form 10-K, which includes our financial statements for the fiscal year ended June 30, 2017,2020, on the website of the Securities and Exchange Commission atwww.sec.gov, , or in the “Financial‘‘Financial Reporting/SEC Filings”Filings’’ section of the “Investors”‘‘Investors’’ section of our website atwww.myriad.com.www.myriad.com. You also may obtain a printed copy of our annual report on Form 10-K, as amended, including our financial statements from us, free of charge, by sending a written request to: Secretary, Myriad Genetics, Inc., 320 Wakara Way, Salt Lake City, Utah 84108. Exhibits will be provided upon written request and payment of an appropriate processing fee.
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TABLE OF CONTENTS |
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MYRIAD GENETICS, INC.
320 WAKARA WAY
SALT LAKE CITY, UTAH 84108
(801) 584-3600
PROXY STATEMENT FOR THE MYRIAD GENETICS, INC.
20172020 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON NOVEMBER 30, 2017DECEMBER 4, 2020
This proxy statement, along with the accompanying Notice of 20172020 Annual Meeting of Stockholders, contains information about the 20172020 Annual Meeting of Stockholders of Myriad Genetics, Inc., including any adjournments or postponements of the annual meeting, which we refer to as the Annual Meeting. To attend the Annual Meeting please visit the following URL: www.virtualshareholdermeeting.com/MYGN2020.In this proxy statement, we refer to Myriad Genetics, Inc. as “Myriad,” “the‘‘Myriad,’’ ‘‘the Company,” “we”’’ ‘‘we’’ and “us.”‘‘us.’’
This proxy statement relates to the solicitation of proxies by our Board of Directors for use at the Annual Meeting. On or about October 12, 2017,15, 2020, we began sending the Notice of Internet Availability of Proxy Materials, which we refer to throughout this proxy statement as the Notice, to all stockholders entitled to vote at the Annual Meeting.
IMPORTANT INFORMATION ABOUT THE
ANNUAL MEETING AND VOTING
Why is the Company Soliciting My Proxy?
The Board of Directors of Myriad Genetics, Inc. is soliciting your proxy to vote at the Annual Meeting to be held via webcast on Friday, December 4, 2020, at our offices, 320 Wakara Way, Salt Lake City, Utah, on Thursday, November 30, 2017, at 9:8:00 a.m. MST and any adjournments of the Annual Meeting. The proxy statement, along with the accompanying Notice of 20172020 Annual Meeting of Stockholders, summarizes the purposes of the Annual Meeting and the information you need to know to vote at the meeting.
We have sent you the Notice and made this proxy statement, the Notice of 20172020 Annual Meeting of Stockholders, and our annual report on Form 10-K to stockholders for the fiscal year ended June 30, 20172020 available to you on the Internetinternet because you owned shares of Myriad Genetics, Inc. common stock on the record date. We also have delivered printed versions of these materials to certain stockholders by mail. The Company commenced distribution of the Notice and the proxy materials to stockholders on or about October 12, 2017.15, 2020.
Why Did I Receive a Notice in the Mail Regarding the Internet Availability of Proxy Materials Instead of a Full Set of Proxy Materials?
As permitted by the rules of the U.S. Securities and Exchange Commission, or the SEC, we may furnish our proxy materials to our stockholders by providing access to such documents on the Internet,internet, rather than mailing printed copies of these materials to each stockholder. Most stockholders will not receive printed copies of the proxy materials unless they request them. We believe that this process should expedite stockholders’ receipt of proxy materials, lower the costs of the Annual Meeting and help to conserve natural resources. If you received a Notice by mail or electronically, you will not receive a printed or email copy of the proxy materials, unless you request one by following the instructions included in the Notice. Instead, the Notice will provide instructions on how you may access and review
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all of the proxy materials and submit your proxy on the Internet or by telephone. If you requested a paper copy of the proxy materials, you may authorize the voting of your shares by following the instructions on the enclosed proxy card, in addition to the other methods of voting described in this proxy statement.
Why Are You Holding a Virtual Annual Meeting?
Due to the public health impact of COVID-19 and to support the health and well-being of our stockholders, this year’s Annual Meeting will be held in a virtual meeting format only. We have designed our virtual format to enhance, rather than constrain, stockholder access, participation and communication. For example, the virtual format allows stockholders to communicate with us in advance of, and during, the annual meeting so they can ask questions of our board of directors or management, as time permits.
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IMPORTANT INFORMATION ABOUT THE ANNUAL MEETING AND VOTING |
What Happens If There Are Technical Difficulties During the Annual Meeting?
We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual Annual Meeting, voting at the Annual Meeting or submitting questions at the Annual Meeting. If you encounter any difficulties accessing the virtual Annual Meeting during the check-in or meeting time, please call 1-(800) 586-1548 or international 1-(303) 562-9288.
Who Can Vote?
Only stockholders who owned Myriad Genetics, Inc. common stock at the close of business on October 4, 20177, 2020 are entitled to vote at the Annual Meeting. On this record date, there were 69,206,84875,206,891 shares of our common stock outstanding and entitled to vote. Common stock is our only class of voting stock.
You do not need to attend the Annual Meeting to vote your shares. Shares represented by valid proxies, received in time for the Annual Meeting and not revoked prior to the meeting, will be voted at the meeting. For instructions on how to change or revoke your proxy, see “May‘‘May I Change or Revoke My Proxy?”’’ below.
How Many Votes Do I Have?
Each share of Myriad Genetics, Inc. common stock that you owned at the close of business on the record date, October 4, 2017,7, 2020, entitles you to one vote.
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How Do I Vote?
Whether you plan to attend the Annual Meeting or not, we urge you to vote by proxy. To attend the annual meeting shareholders need to go to the following URL: www.virtualshareholdermeeting.com/MYGN2020 and enter their control number. All shares represented by valid proxies that we receive through this solicitation, and that are not revoked, will be voted in accordance with your instructions on the proxy card or as instructed via Internet or telephone. You may specify whether your shares should be voted for or withheld foragainst each nominee for director, and whether your shares should be voted for, against or abstain with respect to each of the other proposals. If you properly submit a proxy without giving specific voting instructions, your shares will be voted in accordance with the board’s recommendations as noted below. Voting by proxy will not affect your right to attend the Annual Meeting. If your shares are registered directly in your name through our stock transfer agent, American Stock Transfer and Trust Company, or you have stock certificates registered in your name, you may vote:
By Internet or by telephone | ||
To vote by Internet or telephone in advance of the meeting, follow the instructions included in the Notice or, if you received printed materials, in the proxy card, to vote by Internet or telephone. | ||
By mail | ||
If you received your proxy materials by mail, you can vote by completing, signing, dating and returning the proxy card as instructed on the card. If you sign the proxy card but do not specify how you want your shares voted, they will be voted in accordance with the board’s recommendations as noted below. | ||
At the meeting | ||
To vote by Internet directly during the webcast of the Annual Meeting, you will need to visit the following URL: www.virtualshareholdermeeting.com/MYGN2020 and enter your control number. To vote during the annual meeting when the polls open push the ‘‘vote,’’ button on the interface. |
Telephone and Internet voting facilities for stockholders of record will be available 24-hours-a-day and will close at 11:59 p.m. EST on November 29, 2017.December 3, 2020.
If your shares are held in “street name”‘‘street name’’ (held in the name of a bank, broker or other holder of record), you will receive instructions from the holder of record. You must follow the instructions of the holder of record in order for your shares to be voted. Telephone and Internet voting also will be offered to stockholders owning shares through certain
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banks and brokers. If your shares are not registered in your own name and you plan to vote your shares in person at the Annual Meeting, you should contact your broker or agent to obtain a legal proxy or broker’s proxy card and bring it tobefore the meeting in order to vote. To vote you must be a shareholder of record as of Oct. 7, 2020 and during the online annual meeting use the ‘‘vote,’’ button to vote your shares.
How Does the Board of Directors Recommend That I Vote on the Proposals?
The Board of Directors recommends that you vote as follows:
Proposal 1: | ‘‘FOR’’ the election of the three Class III directors to the Board of Directors to serve until the Annual Meeting of Stockholders in 2023; | |
Proposal 2: | ‘‘FOR’’ the approval of a proposed amendment to our 2017 Employee, Director and Consultant Equity Incentive Plan, as amended, to replenish the share pool for equity incentive grants; | |
Proposal 3: | ‘‘FOR’’ the ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for the six-month transition period ending December 31, 2020 (the interim period before commencing our new calendar fiscal year on January 1, 2021); and | |
Proposal 4: | ‘‘FOR’’ the approval, on an advisory basis, of the compensation of our named executive officers, as disclosed in this proxy statement. |
If any other matter is presented, your proxy provides that your shares will be voted by the proxy holder listed in the proxy in accordance with his or her best judgment. At the time this proxy statement was first made
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IMPORTANT INFORMATION ABOUT THE ANNUAL MEETING AND VOTING |
available, we knew of no matters that needed to be acted on at the Annual Meeting, other than those described in this proxy statement.
May I Change or Revoke My Proxy?
If you give us your proxy, you may change or revoke it at any time before the Annual Meeting. You may change or revoke your proxy in any of the following ways:
● | By re-voting by Internet or by telephone as instructed above; |
● | If you received printed proxy materials, by signing a new proxy card with a date later than your previously delivered proxy and submitting it as instructed above; |
● | By notifying our Secretary in writing before the Annual Meeting that you have revoked your proxy; or |
● | By attending the Annual Meeting and voting by Internet during the Annual Meeting in accordance with the instructions. Attending the Annual Meeting will not in and of itself revoke a previously submitted proxy unless you specifically re-vote during the annual meeting. |
Your most current vote, whether by telephone, Internet or proxy card, is the one that will be counted.
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What if I Receive More Than One Notice or Proxy Card?
You may receive more than one Notice or proxy card if you hold shares of our common stock in more than one account, which may be in registered form or held in street name. Please vote in the manner described under “How‘‘How Do I Vote?”’’ for each account to ensure that all of your shares are voted.
Will My Shares Be Voted if I Do Not Vote?
If your shares are registered in your name, they will not be voted if you do not vote as described above under “How‘‘How Do I Vote?”’’ If your shares are held in street name and you do not provide voting instructions to the bank, broker or other holder of record of your shares as described above, the holder of record has the authority to vote your unvoted shares only on Proposal 43 if it does not receive instructions from you and does not have the ability to vote your uninstructed shares on any other proposal. Therefore, we encourage you to provide voting instructions. This ensures that your shares will be voted at the Annual Meeting and in the manner you desire. When your broker cannot vote your shares on a particular matter because it has not received instructions from you and does not have discretionary voting authority or because your broker chooses not to vote on a matter for which it does have discretionary voting authority, it is referred to as a “broker‘‘broker non-vote.”’’ Thus, if you hold your shares in a street name and do not instruct your bank, broker or other nominee how to vote, no votes will be cast on any proposal on your behalf other than the ratification of the selection of the public accounting firm.
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IMPORTANT INFORMATION ABOUT THE ANNUAL MEETING AND VOTING |
What Vote is Required to Approve Each Proposal and How are Votes Counted?
Proposal 1: Elect Directors | The | Recommendation: FOR the election of the three Class III directors for director | ||
Proposal 2: Approve the Amendment to Myriad Genetics, Inc. 2017 Employee, Director and Consultant Equity Incentive Plan, as Amended | The affirmative vote of a majority of the shares voted affirmatively or negatively for this proposal is required to approve the amendment to the Myriad Genetics, Inc. 2017 Employee, Director and Consultant Equity Incentive | Recommendation: FOR | ||
Proposal 3: |
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| The affirmative vote of a majority of the shares voted affirmatively or negatively for this proposal is required to ratify the selection of Ernst & Young LLP as our independent registered public accounting firm. Abstentions will have no effect on the results of this vote. Brokerage firms have authority to vote customers’ unvoted shares held by the firms in | Recommendation: FOR | ||
Proposal Approve, on an Advisory Basis, the Compensation of Our Named Executive Officers | The affirmative vote of a majority of the shares voted affirmatively or negatively for this proposal is required to approve, on an advisory basis, the compensation of our named executive officers, as disclosed in this proxy statement. Abstentions will have no effect on the result of this vote. Brokerage firms do not have authority to vote customers’ unvoted shares held by | |||
| Recommendation: FOR |
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Is Voting Confidential?
We will keep all the proxies, ballots and voting tabulations private. We only let our Inspector of Elections and our transfer agent, American Stock Transfer and Trust, examine these documents. Management, other than the Inspector of Elections Richard Marsh,Benjamin G. Jackson, General Counsel and Secretary, will not know how you voted on a
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IMPORTANT INFORMATION ABOUT THE ANNUAL MEETING AND VOTING |
specific proposal unless it is necessary to meet legal requirements. We will, however, forward to management any written comments you make on the proxy card or elsewhere.
Where Can I Find the Voting Results of the Annual Meeting?
The preliminary voting results will be announced at the Annual Meeting, and we will publish preliminary results, or final results if available, in a Current Report on Form 8-K within four business days of the Annual Meeting. If final results are unavailable at the time the Form 8-K is filed, we will file an amended report on Form 8-K to disclose the final voting results within four business days after the final results are known.
What Are the Costs of Soliciting these Proxies?
We will pay all of the costs of soliciting these proxies. Our directors and employees may solicit proxies in person or by telephone, fax or email. We will pay these employees and directors no additional compensation for these services. We willmay ask banks, brokers and other institutions, nominees and fiduciaries to forward these proxy materials to their principals and to obtain authority to deliver proxies. We will then reimburse them for their expenses.
What Constitutes a Quorum for the Annual Meeting?
The presence, in person (by means of remote communication as authorized by the Board) or by proxy, of the holders of a majority of the voting power of the outstanding shares of our common stock is necessary to constitute a quorum at the Annual Meeting. Votes of stockholders of record who are present at the meeting in person (by means of remote communication as authorized by the Board) or by proxy, abstentions, and broker non-votes are counted for purposes of determining whether a quorum exists.
The Annual Meeting will be held at 9:8:00 a.m. MST on Thursday, November 30, 2017Friday, December 4, 2020 via Internet webcast.
This year, our Annual Meeting will be held in a virtual meeting format only. To attend the virtual Annual Meeting, go to www.virtualshareholdermeeting.com/MYGN2020 shortly before the meeting time, and follow the instructions for downloading the webcast. If you miss the Annual Meeting, you can view a replay of the webcast at www.virtualshareholdermeeting.com/MYGN2020 for one year following the offices of Myriad Genetics, Inc., 320 Wakara Way, Salt Lake City, Utah 84108. When you arrive at our offices, our personnel will direct you to the appropriate meeting room.annual meeting. You need not attend the Annual Meeting in order to vote.
Householding of Annual Disclosure Documents
SEC rules concerning the delivery of annual disclosure documents allow us or your broker to send a single Notice or, if applicable, a single set of our proxy materials to any household at which two or more of our stockholders reside, if we or your broker believe that the stockholders are members of the same family. This practice, referred to as “householding,”‘‘householding,’’ benefits both you and us. It reduces the volume of duplicate information received at your household and helps to reduce our expenses. The rule applies to our Notices, annual reports, proxy statements and information statements. Once you receive notice from your broker or from us that communications to your address will be “householded,”‘‘householded,’’ the practice will continue until you are otherwise notified or until you revoke your consent to the practice. Stockholders who participate in householding will continue to have access to and utilize separate proxy voting instructions.
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If your household received a single Notice or, if applicable, set of proxy materials this year, but you would prefer to receive your own copy, please contact Broadridge by calling their toll free number 1-800-542-1061.1-866-540-7095. If you do not wish to participate in “householding”‘‘householding’’ and would like to receive your own Notice or, if applicable, a set of proxy materials in future years, follow the instructions described below. Conversely, if you share an address with another Myriad Genetics, Inc. stockholder and together both of you would like to receive only a single Notice or, if applicable, set of proxy materials, follow these instructions:
● | If your Myriad Genetics, Inc. shares are registered in your own name, please contact Broadridge and inform them of your request by calling them at 1-866-540-7095 or writing them at Broadridge Householding Department, 51 Mercedes Way, Edgewood, NY 11717. |
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IMPORTANT INFORMATION ABOUT THE ANNUAL MEETING AND VOTING |
● | If a broker or other nominee holds your Myriad Genetics, Inc. shares, please contact the broker or other nominee directly and inform them of your request. Be sure to include your name, the name of your brokerage firm and your account number. |
Electronic Delivery of Company Stockholder Communications
Most stockholders can elect to receive notices of the availability of future proxy materials by email instead of receiving a paper copy in the mail. You can choose this option and save the cost of producing and mailing these documents by following the instructions provided on your Notice or proxy card or following the instructions provided when you vote over the Internet atwww.proxyvote.com..
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BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the beneficial ownership of our common stock as of September 1, 20172020 for (a) each stockholder that we know to be the beneficial owner of more than 5% of our common stock, (b) each of our executive officers named in the Summary Compensation Table of this proxy statement (the “Named‘‘Named Executive Officers”Officers’’ or “NEOs”‘‘NEOs’’), (c) each of our directors and director nominees, and (d) all of our current directors and executive officers as a group. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. We deem shares of common stock that may be acquired by an individual or group within 60 days of September 1, 20172020 pursuant to the exercise of options and the vesting of restricted stock unit awards to be outstanding for the purpose of computing the percentage ownership of an individual or group, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown in the table. Except as indicated in footnotes, we believe that the stockholders named in this table have sole voting and investment power with respect to all shares of common stock shown to be beneficially owned by them based on information provided to us by these stockholders. Percentage of ownership is based on 68,666,71374,709,791 shares of common stock outstanding on September 1, 2017.2020.
Shares Beneficially Owned | ||||||||
Name and Address** | Number | Percent | ||||||
5% or More Stockholders | ||||||||
Baillie Gifford & Co. (1) | 10,159,758 | 14.8 | % | |||||
Calton Square — 1 Greenside Row | ||||||||
Edinburgh, Scotland EH13AN | ||||||||
BlackRock, Inc (2) | 9,391,168 | 13.7 | % | |||||
55 East 52nd Street | ||||||||
New York, NY 10055 | ||||||||
The Vanguard Group (3) | 5,353,743 | 7.8 | % | |||||
100 Vanguard Blvd. | ||||||||
Malvern, PA 19355 | ||||||||
Camber Capital Management LLC (4) | 4,060,000 | 5.9 | % | |||||
101 Huntington Avenue, Suite 2101 | ||||||||
Boston, MA 02199 | ||||||||
State Street Corporation (5) | 3,589,079 | 5.2 | % | |||||
One Lincoln Street | ||||||||
Boston, MA 02111 | ||||||||
D.E. Shaw & Co, L.P. (6) | 3,411,217 | 5.0 | % | |||||
1166 Avenue of the Americas, 9th Floor | ||||||||
New York, NY 10036 | ||||||||
Named Executive Officers | ||||||||
Mark C. Capone (7) | 1,333,467 | 1.9 | % | |||||
R. Bryan Riggsbee (8) | 37,160 | * | ||||||
Alexander Ford (9) | 130,976 | * | ||||||
Jerry S. Lanchbury, Ph.D. (10) | 804,039 | 1.2 | % | |||||
Richard M. Marsh (11) | 988,349 | 1.4 | % |
Shares Beneficially Owned
| ||||||||
Name and Address** | Number | Percent | ||||||
5% or More Stockholders | ||||||||
BlackRock, Inc (1) | 12,752,119 | 17.1 | % | |||||
The Vanguard Group (2) | 8,320,574 | 11.1 | % | |||||
Camber Capital Management (3) | 4,000,000 | 5.4 | % | |||||
State Street Corporation (4) | 3,886,276 | 5.2 | % | |||||
D.E. Shaw & Co, L.P. (5) | 3,791,528 | 5.1 | % | |||||
Named Executive Officers | ||||||||
Mark C. Capone (6) | 1,402,967 | 1.9 | % | |||||
R. Bryan Riggsbee (7) | 65,454 | * | ||||||
Alexander Ford (8) | 173,432 | * | ||||||
Jerry S. Lanchbury, Ph.D. (9) | 752,612 | 1.0 | % | |||||
Nicole Lambert (10) | 22,657 | * | ||||||
Bernard F. Tobin | 160,636 | * | ||||||
Gary A. King (11) | 393,014 | * | ||||||
Directors and Director Nominees | ||||||||
John T. Henderson, M.D. (12) | 186,403 | * | ||||||
Walter Gilbert, Ph.D. (13) | 102,463 | * | ||||||
Lawrence C. Best (14) | 169,103 | * | ||||||
Heiner Dreismann, Ph.D. | 43,103 | * | ||||||
Dennis H. Langer, M.D., J.D. (15) | 109,103 | * | ||||||
S. Louise Phanstiel (16) | 165,103 | * |
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Directors and Director Nominees | ||||||||
John T. Henderson, M.D. (12) | 207,800 | * | ||||||
Walter Gilbert, Ph.D. (13) | 102,500 | * | ||||||
Lawrence C. Best (14) | 167,500 | * | ||||||
Heiner Dreismann, Ph.D. | 17,500 | * | ||||||
Dennis H. Langer, M.D., J.D. (15) | 167,500 | * | ||||||
S. Louise Phanstiel (16) | 163,500 | * | ||||||
All current executive officers and directors as a group (15 persons) (17) | 4,858,238 | 6.7 | % |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
Shares Beneficially Owned | ||||||
Name and Address** | Number | Percent | ||||
Colleen F. Reitan | 0 | * | ||||
Lee N. Newcomer M.D. | 0 | * | ||||
Daniel M. Skovronsky M.D., Ph.D | 0 | * | ||||
Daniel K. Spiegelman | 0 | * | ||||
Rashmi Kumar | 0 | * | ||||
Paul J. Diaz | 0 | * | ||||
All current executive officers and directors as a group (19 persons) (17) | 2,153,142 | 2.8% |
* | Represents beneficial ownership of less than 1% of our outstanding shares of common stock. |
** | Unless otherwise indicated, the address for each beneficial owner is c/o Myriad Genetics, Inc., 320 Wakara Way, Salt Lake City, Utah 84108. |
(1) | This information is based on a Schedule 13G/A filed with the SEC on February |
This information is based on a Schedule 13G/A filed with the SEC on February 10, |
This information is based on a Schedule 13G filed with the SEC on |
This information is based on a Schedule 13G filed with the SEC on February |
This information is based on a Schedule |
(6) | Includes 1,037,876 shares of common stock subject to currently exercisable options and restricted stock unit awards which vest within 60 days of September 1, 2020. |
(7) | Includes |
(8) | Includes 161,619 shares of common stock subject to restricted stock unit awards which vest within 60 days of September 1, 2020. |
(9) | Includes 675,172 shares of common stock subject to currently exercisable options and restricted stock unit awards which vest within 60 days of September 1, 2020. |
(10) | Includes 16,328 shares of common stock subject to restricted stock unit awards which vest within 60 days of September 1, 2020. |
(11) | Includes 314,367 shares of common stock subject to currently exercisable options and restricted stock unit awards which vest within 60 days of September 1, 2020. |
(12) | Includes shares held directly by Dr. Henderson and his wife, as well as 120,000 shares of common stock subject to currently exercisable options as of September 1, 2020. |
(13) | Includes 60,000 shares of common stock subject to currently exercisable options as of September 1, 2020. |
(14) | Includes 120,000 shares of common stock subject to currently exercisable options as of September 1, 2020. |
(15) | Includes 60,000 shares of common stock subject to currently exercisable options as of September 1, 2020. |
(16) | Includes 120,000 shares of common stock subject to currently exercisable options as of September 1, 2020. |
(17) | See Notes 6-16 above. Also includes 293,685 shares of common stock subject to currently exercisable options and options exercisable and restricted stock unit awards which vest within 60 days of September 1, |
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MANAGEMENT AND CORPORATE GOVERNANCE
Our Restated Certificate of Incorporation, as amended, and Restated By-Laws provide that our business is to be managed by or under the direction of our Board of Directors. Our Board of Directors is divided into three classes for purposes of election. One class is elected at each annual meeting of stockholders to serve for a three-year term.term to expire at the third succeeding annual meeting after their election. The Board of Directors currently consists of seven12 members, classified into three classes as follows: John T. Henderson, M.D. and, S. Louise Phanstiel, Daniel M. Skovronsky M.D., Ph.D, and Daniel K. Spiegelman constitute a class with a term ending at the 20182021 Annual Meeting (the “Class‘‘Class I Directors”Directors’’); Mark C. Capone andPaul J. Diaz, Heiner Dreismann, Ph.D., and Colleen F. Reitan constitute a class with a term ending at the 20192022 Annual Meeting (the “Class‘‘Class II Directors”Directors’’); and Lawrence C. Best, Walter Gilbert, Ph.D., Rashmi Kumar, Dennis H. Langer, M.D., J.D., and Lawrence C. BestLee N. Newcomer, M.D. constitute a class with a term ending at the 20172020 Annual Meeting (the “Class‘‘Class III Directors”Directors’’).
Board Composition and Refreshment
Annually, the Nominating and Governance Committee of the Board of Directors considers the size, structure and needs of the Board, reviews changes to the Board, and recommends director nominees to the Board for approval.
In its review of directors, and its director nominees, the Board considers its composition, including its diversity, and the capabilities, areas of expertise, and experience of the Board, as well as the current and future business strategies and challenges and opportunities for the Company. These considerations have resulted in a change in Board leadership, the addition of five, new independent directors over the past two years, and the appointment of a new CEO (also a director) this year. The Board also renamed and refocused the former Strategic Committee, now the Research and Product Innovation Committee, to enhance our competitive focus on product development. Finally, the Board fleshed out the renamed Audit and Finance Committee’s responsibility over the Company’s internal financial analysis and external financial messaging.
In 2020, the Board appointed S. Louise Phanstiel, then serving as an independent director, as Chair of the Board of Directors.
In 2019, the Board appointed Dr. Lee Newcomer, former senior executive of United Healthcare and former Medical Director at United Healthcare and Cigna Healthcare, and Ms. Colleen Reitan, former President of Health Plan Operations at Health Care Services Corporation, the largest customer-owned health plan in the U.S., as directors. In 2020, the Board appointed Ms. Rashmi Kumar, Senior Vice President and Global Chief Information Officer of Hewlett Packard Enterprise Company, Dr. Daniel Skovronsky, Chief Scientific Officer and President of Lilly Research Laboratories at Eli Lilly and Company, and Daniel Spiegelman, former Executive Vice President and Chief Financial Officer at BioMarin Pharmaceutical, Inc., as directors. Also, in 2020, the Board appointed Mr. Paul Diaz former Partner at Cressey & Company LP and former CEO of Kindred Healthcare, Inc. as our CEO and an executive director. At our Annual Meeting, Mr. Larry Best, Dr. Walter Gilbert, and Dr. John Henderson will retire from the Board after distinguished service and innumerable contributions to the Company. Effective as of the Annual Meeting the size of the Board of Directors will be reduced to nine members.
On September 14, 2017,24, 2020, our Board of Directors accepted the recommendation of the Nominating and Governance Committee and votedunanimously approved a resolution to nominate Walter Gilbert, Ph.D.,Rashmi Kumar, Dennis H. Langer, M.D., J.D., and Lawrence C. BestLee N. Newcomer M.D. for election at the Annual Meeting for a term of three yearsto serve until the 20202023 Annual Meeting of stockholders,Stockholders, and until their respective successors have been elected and qualified, or until their earlier death, resignation, retirement or removal.
Set forth below are the names of the persons nominated as directors and the directors whose terms do not expire this year and who will continue to serve as directors following the Annual Meeting, their ages as of September 1, 2017,2020, their offices in the Company, if any, their principal occupations or employment for at least the past five years, the length of their tenure as directors and the names of other public companies in which
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MANAGEMENT AND CORPORATE GOVERNANCE |
such persons currently hold directorships or have held directorships in the past five years. Additionally, information about the specific experience, qualifications, attributes or skills that led to the Board’s conclusion at the time of the filing of this proxy statement that each person listed below should serve as a director is set forth below for each individual director.
Name and Position | Age | Audit and Finance Committee | Compensation Committee |
Nominating |
Product Innovation Committee | ||||||||
| Chair of the Board of Directors | ||||||||||||
| |||||||||||||
| |||||||||||||
Paul J. Diaz | 58 | ||||||||||||
| 67 | ||||||||||||
Walter Gilbert, Ph.D. (1) | 88 | ||||||||||||
John T. Henderson, M.D. (1) | 76 | ||||||||||||
Rashmi Kumar | 51 | ||||||||||||
Dennis H. Langer, M.D., J.D. | 68 | ||||||||||||
Lee N. Newcomer | 67 | ||||||||||||
Colleen F. Reitan | 60 | ||||||||||||
Daniel M. Skovronsky M.D., Ph.D | 47 | ||||||||||||
Daniel K. Spiegelman | 61 |
Audit and Finance Committee | ||
Compensation Committee | ||
Nominating and Governance Committee | ||
Research and Product Innovation Committee | ||
C | Committee Chair | |
(1) | Following the annual stockholder meeting on December 4, 2020 Dr. Henderson, Dr. Gilbert, and Mr. Best will retire from the Board of Directors. |
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MANAGEMENT AND CORPORATE GOVERNANCE |
The following is a brief biography of each of the persons nominated as directors and the directors whose terms do not expire this year and who will continue to serve as directors following the Annual Meeting.
S. Louise Phanstiel |
Experience: | ||
S. Louise Phanstiel, Chair of the Board of Directors, has been a Director of Myriad since September 2009, held several executive positions at Anthem, Inc., formerly WellPoint, Inc. from 1996 to 2007. She was President, Specialty Products which included behavioral health services; Senior Vice President, Chief of Staff and Corporate Planning in the Office of the Chairman; and Chief Accounting Officer, Controller and Chief Financial Officer for all WellPoint, Inc. subsidiaries. Previously, Ms. Phanstiel was a partner at the international services firm PricewaterhouseCoopers, LLP, formerly Coopers & Lybrand, LLP where she specialized in insurance. Ms. Pantile’s life science experience includes having previously served on the Board of Directors and Chair of the Audit Committees at publicly traded companies, Inveresk Research Group, Inc. and Verastem, Inc. The Board of Directors has determined that Ms. Phanstiel should serve on the Board for the following reasons: She provides the Board with important expertise in the healthcare industry based on her extensive experience in several senior positions at WellPoint, Inc. This expertise is critical as we rely on healthcare third-party reimbursement for our molecular diagnostic testing services. Ms. Phanstiel also provides the Board with financial accounting, internal control and public company reporting expertise from her work at Coopers & Lybrand, LLP and as a Certified Public Accountant. In addition, she provides the Board with business, financial and investment expertise, as well as management expertise, resulting from managing and service as a director of publicly traded companies. |
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MANAGEMENT AND CORPORATE GOVERNANCE |
Paul J. Diaz |
Experience: | ||
Paul J. Diaz was appointed as the President and Chief Executive Officer, or CEO, of Myriad Genetics, Inc., and a member of the Board of Directors, effective August 13, 2020. Mr. Diaz was most recently a partner at Cressey & Company (2016-2020), a private investment firm headquartered in Chicago, Illinois, which currently manages over $3.0 billion in committed capital. Cressey & Company is a healthcare focused middle-market private equity firm with over 30 years of success investing in and helping to build high quality healthcare businesses. Mr. Diaz is the former president and CEO and vice chairman of Kindred Healthcare, Inc. (2002-2016) a Fortune 500 Company and one of the largest providers of healthcare services in the United States. At the time, Kindred had revenues of $7.2 billion, rehabilitation hospitals, sub-acute units, home health and hospice agencies and contract rehabilitation locations. For six years in a row, during his tenure as CEO, Kindred was ranked one of the Most Admired healthcare companies in the U.S. by Fortune magazine. Mr. Diaz currently serves on the board of directors of DaVita (NYSE: DVA), the board of trustees of Johns Hopkins Medicine (where he serves as chair of Johns Hopkins Healthcare), and the board of visitors of the Georgetown University Law Center. He was formerly on the board of directors of PharMerica Corporation (NYSE: PMC), and previously served on the board of the Federation of American Hospitals, and the Bloomberg School of Public Health at Johns Hopkins University. While CEO of Kindred, Mr. Diaz was a member of the Business Roundtable and the Wall Street Journal CEO Council. Modern Healthcare magazine named Mr. Diaz one of the 100 Most Influential People in Healthcare and named him one of the top 25 Minority Executives in Healthcare for numerous years. In addition, Hispanic magazine named Mr. Diaz one of the 25 Best Latinos in business in multiple years. Mr. Diaz earned a bachelor’s degree in Finance and Accounting from American University’s Kogod School of Business and a law degree from Georgetown University Law Center in Washington, D.C. The Board of Directors has determined that Mr. Diaz should serve on the Board for the following reasons: He provides the Board with important business and managerial expertise from his 15 years at Kindred Healthcare, including specific expertise in managing healthcare service companies and business transformation. Furthermore, Mr. Diaz has extensive experience in private equity with healthcare companies, including businesses in the personalized medicine space. Furthermore, his background in finance and accounting and law provide unique insights to our business. Mr. Diaz also has a background serving on both public and private healthcare boards. |
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MANAGEMENT AND CORPORATE GOVERNANCE |
Heiner Dreismann, Ph.D. |
Experience: | ||
Heiner Dreismann, Ph.D. The Board of Directors has determined that Dr. Dreismann should serve on the Board for the following reasons: He provides the Board with important business and managerial expertise from his more than 20 years at Roche, including specific expertise in developing and commercially launching diagnostic products. Furthermore, Dr. Dreismann has extensive experience in international markets, specifically in Europe, while he was CEO of Roche Molecular Systems, the international leader in molecular diagnostics, which is important as we seek to expand internationally. His scientific background and expertise also enable him to provide the Board with technical advice on product research and development. Dr. Dreismann has a diversified background in managing and serving as a director of several companies in the healthcare industry | ||
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MANAGEMENT AND CORPORATE GOVERNANCE |
Rashmi Kumar |
Experience: | ||
Rashmi Kumar has been a Director of the Company since September 2020. Currently, Ms. Kumar serves as the SVP CIO – Global IT with Hewlett Packard Enterprise in Houston. She is a seasoned technology leader with wide ranging experience in IT Leadership, healthcare, consulting services, electric utilities, financial services, information technology, media & entertainment and steel industries. With more than 25 years of experience, Ms. Kumar’s primary areas of focus include Digital Transformation, AI/ML, Data & Analytics, strategic planning, Enterprise Architecture, and large-scale business process transformations. Rashmi Kumar’s joined HPE in 2018 as VP Global IT to focus on Applications Operations, and Support, NGIT Program Build and Deployment, and technology leadership to enable HPE business to achieve transformation goals. Ms. Kumar has served as CIO and CTO for many Fortune 50 companies like, McKesson, Southern California Edison, Toyota, HPE, and Tata Steel. Rashmi Kumar earned a bachelor’s degree in Metallurgical Engineering from the Bihar Institute of Technology in Sindri, India. She also holds an MBA from the University of California, Irvine; Paul Merage School of Business. She is very passionate about the topic of equality and is executive sponsor for various ERG’s and sits on Diversity & Inclusion Steering committees. The Board of Directors has determined that Ms. Kumar should serve on the Board for the following reasons: She provides the Board with important expertise in the healthcare industry based on her extensive experience at McKesson Corp. Ms. Kumar also has extensive experience in information technology management at leading companies across a diverse range of industries. This skill set is especially important as Myriad looks to upgrade its information technology systems relating to its customer interfaces. Ms. Kumar also has a strong scientific and engineering background providing expertise from a scientific and product development standpoint. |
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MANAGEMENT AND CORPORATE GOVERNANCE |
Dennis H. Langer, M.D., J.D. |
Experience: | ||
Dennis H. Langer, M.D., J.D. The Board of Directors has determined that Dr. Langer should serve on the Board for the following reasons: His medical background provides the Board with expertise in developing predictive, personalized, and prognostic testing products. Dr. Langer provides the Board with business and management expertise from senior positions at several major pharmaceutical companies, including expertise in research and development, which is critical to our development of molecular diagnostic testing services. He brings international experience as we implement strategies for global expansion. Dr. Langer’s background as a board-certified psychiatrist with extensive experience in neuropsychiatric drug development and personalized medicine provides the Board with expertise in developing and commercializing diagnostics for patients suffering from neuropsychiatric and other medical conditions. Dr. Langer also has a diversified background in managing and serving as a director of several companies in the healthcare industry. | ||
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MANAGEMENT AND CORPORATE GOVERNANCE |
Lee Newcomer, M.D. |
Experience: | ||
Lee Newcomer, M.D., was appointed as a member of the Board of Directors in September 2019. Dr. Newcomer currently manages his own consulting business, Lee N. Newcomer Consulting, LLC, and previously held senior executive roles at United Healthcare including Senior Vice President for Oncology and Genetics, Chief Medical Officer and Senior Vice President of Health Policy and Strategy for UnitedHealth Group. Dr. Newcomer also worked for Vivius, Inc., a consumer directed health plan, holding the position of Executive Vice President and Chief Medical Officer. Dr. Newcomer received a Master’s Degree in Healthcare Administration & Management from the University of Wisconsin, Madison, an M.D. from the University of Nebraska, Omaha, and a B.S. from Nebraska Wesleyan University. Dr. Newcomer currently serves on the Board of Cellworks Group Inc., a private precision medicine company and Intervention Insights, a genomic test decision support company. He also served on the Board of Directors of Park Nicollet Health Systems, a hospital health care system with approximately 1,000 physicians and 400 beds, for 10 years including two years as Chairman. The Board of Directors has determined that Dr. Newcomer should serve on the Board for the following reasons: His extensive reimbursement and managed care experience will aid the Company in its efforts to expand reimbursement for its new innovative precision medicine tests. He provides the Board with expertise on the medical insurance industry based on his extensive experience in several senior positions at UnitedHealth Group, Inc. and CIGNA Corporation. Additionally, Dr. Newcomer’s medical background provides the Board with expertise in developing predictive, personalized and prognostic testing products. Furthermore, Dr. Newcomer brings extensive business management experience from his 28 years of work in the managed care and pharmaceutical industries. | ||
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MANAGEMENT AND CORPORATE GOVERNANCE |
Colleen F. Reitan |
Experience: | ||
Colleen F. Reitan was appointed as a member of the Board of Directors in September of 2019. Ms. Reitan previously held numerous senior leadership positions at Health Care Services Corporation (HCSC) including most recently as the Executive Vice President and President of Plan Operations and as the Chief Operating Officer. Prior to working at HCSC, Ms. Reitan held numerous senior management positions at Blue Cross and Blue Shield of Minnesota including Chief Operating Officer. In aggregate, Ms. Reitan has over 35 years of experience in the managed care industry. Ms. Reitan holds a B.A. from Minnesota State University at Mankato and a M.S. in Health Care Administration from the University of Minnesota-Twin Cities. She currently serves on the board of Alnylam Pharmaceuticals, Inc. The Board of Directors has determined that Ms. Reitan should serve on the Board for the following reasons: Her extensive reimbursement and managed care experience will aid the Company in its efforts to expand reimbursement for its new innovative precision medicine tests. Furthermore, she provides the Board with important expertise on the medical insurance industry based on her extensive experience in several senior positions at Health Care Services Corporation and Blue Cross and Blue Shield of Minnesota. In addition, she provides the Board with management expertise, resulting from managing private companies and serving as a director of a publicly-traded company. | ||
Daniel M. Skovronsky, M.D., Ph.D. |
Experience: | ||
Daniel M. Skovronsky, M.D., Ph.D., joined the Company as a Director in July 2020. Currently, he serves as Chief Science Officer and President of Lilly Research Laboratories at Eli Lilly and Company. Previously, he was Chief Executive Officer of Avid Radiopharmaceuticals Inc., a company he founded in 2004. Dr. Skovronsky earned his M.D. from the Perelman School of Medicine, University of Pennsylvania, his Ph.D. in neuroscience from University of Pennsylvania and a B.S. in molecular biophysics and biochemistry from Yale University. The Board of Directors has determined that Dr. Skovronsky should serve on the Board for the following reasons: His medical and scientific background provides the Board with expertise in developing predictive, personalized, and prognostic testing products. Dr. Skovronsky provides the Board with business and management expertise from senior positions at several major pharmaceutical companies, including expertise in research and development, which is critical to our development of molecular diagnostic testing services. Dr. Skovronsky’s background as a board-certified neuropathologist with extensive experience in neuroscience provides the Board with expertise in developing and commercializing diagnostics for patients suffering from neuropsychiatric and other medical conditions. |
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MANAGEMENT AND CORPORATE GOVERNANCE |
Daniel K. Spiegelman |
Experience: | ||
Daniel K. Spiegelman has been a Director of the Company since May 2020. Most recently, he served as Executive Vice President and Chief Financial Officer at BioMarin Pharmaceuticals, Inc. Prior to that, he held several roles, including Senior Vice President and Chief Financial Officer of CV Therapeutics and Treasurer at Genentech, Inc. He is currently a member of the Board of Directors at Tizona Therapeutics, Inc., a private pharmaceutical company. Mr. Spiegelman received a B.A. degree from Stanford University and a M.B.A. from the Stanford Graduate School of Business. The Board of Directors has determined that Mr. Spiegelman should serve on the Board for the following reasons: He provides the Board with important expertise in the healthcare industry based on her extensive experience in several senior positions at major pharmaceutical companies. Mr. Spiegelman also provides the Board with financial accounting, internal control and public company reporting expertise from his work as Chief Financial Officer of multiple public companies. In addition, he provides the Board with business, financial and investment expertise, as well as management expertise, resulting from managing and service as a director of a private pharmaceutical company. |
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MANAGEMENT AND CORPORATE GOVERNANCE |
Board of Director Qualifications, Expertise, and Attributes
Below are charts showing board diversity, the age range of our director, director independence, and the average tenure of our directors.
Director Capability Definitions
Board Diversity – Representation of gender, ethnic, cultural, or other perspectives that expand the Board’s understanding of the needs and viewpoints of our patients, physician partners, employees, governments, and other stakeholders.
Financial – Experience leading or managing the financial function of an enterprise, resulting in proficiency in complex financial management, capital allocation, and financial reporting. Experience or expertise in financial accounting and reporting processes or the financial management of a major organization.
Leadership – Experience leading a significant enterprise, resulting in a practical understanding of organizations, processes, strategic planning, and risk management. Demonstrated strengths in developing talent, planning succession, and driving change and long-term growth.
Healthcare Industry – Experience with and understanding of complex issues within the health care industry.
Research and Development – Experience and expertise in contributing to healthcare research and development projects aimed at introducing innovative products and services that satisfy unmet medical needs and contribute to the Company’s profits. Expertise in assessing the medical and/or commercial implications for improving health and cost outcome.
Research and Development—Experience and expertise in new product development and life cycle management, resulting in the successful introduction of innovative products and services that satisfy unmet medical needs and contribute to the Company’s profits. Expertise in designing and implementing clinical trials and in research methods used to evaluate and demonstrate improvements in health and cost outcomes.
Technology – A significant background working in technology, resulting in knowledge of how to anticipate technological trends including digital solutions, generate disruptive innovation and extend or create new business models. Significant expertise and experience in leading technology functions of an enterprise.
Public Company Governance - Experience as a board member of other publicly traded companies.
Diagnostics Industry—Experience with complex issues involving the development and distribution of diagnostic tests, providing test results and interpretation, providing clinical laboratory services, and developing and supplying molecular diagnostics, instrumentation equipment, and consumable materials.
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DIRECTOR CAPABILITY MATRIX | ||||||||||||||||
Board Diversity | Financial | Leadership | Healthcare Industry | Diagnostic Industry | Research and Development | Technology | Public Company Governance | |||||||||
S. Louise Phanstiel Chair of the Board | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||
Paul J. Diaz CEO | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||
Heiner Dreismann Ph.D. Director | ✓ | ✓ | ||||||||||||||
| ✓ | ✓ | ✓ | |||||||||||||
Dennis Langer M.D., J.D. Director | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||||
Lee N. Newcomer M.D. Director | ✓ | ✓ | ✓ | ✓ | ||||||||||||
Colleen F. Reitan Director | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||||||
Dan Skovronsky, M.D. Ph.D. Director | ✓ | ✓ | ✓ | ✓ | ||||||||||||
Daniel K. Spiegelman Director | ✓ | ✓ | ✓ | ✓ |
The following is a brief summary of the background and business experience of each of our directors.
John T. Henderson, M.D., Chairman of the Board of Directors, has been a director of Myriad since May 2004 and Chairman of the Board since April 2005. Since December 2000, Dr. Henderson has served as a consultant to the
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pharmaceutical industry as President of Futurepharm LLC. Dr. Henderson currently serves on the Board of Directors of Cytokinetics, Inc. and during the past five years has served on the Board of Directors of Myrexis, Inc. Until his retirement in December 2000, he was with Pfizer for over 25 years, most recently as a Vice President in the Pfizer Pharmaceuticals Group. Dr. Henderson previously held vice presidential level positions with Pfizer in Research and Development in Europe and later in Japan. He also was Vice President, Medical for the Europe, U.S. and International Pharmaceuticals groups at Pfizer. He earned his bachelor’s and medical degrees from the University of Edinburgh and is a Fellow of the Royal College of Physicians (Ed.).
The Board of Directors has determined that Dr. Henderson should serve on the Board for the following reasons: His medical background provides the Board with expertise in developing predictive, personalized and prognostic testing services. Dr. Henderson provides the Board with business and management expertise from his senior positions at Pfizer for over 25 years, including expertise in research and development, which is critical to our development of molecular diagnostic testing services. He brings to the Board international experience as the Company implements strategies for international expansion.
Walter Gilbert, Ph.D., Vice Chairman of the Board of Directors, joined Myriad as a founding scientist and director in March 1992. Dr. Gilbert won the Nobel Prize in Chemistry in 1980 for his contributions to the development of DNA sequencing technology. He was a founder of Biogen, Inc. and its Chairman of the Board and Chief Executive Officer from 1981 to 1985. Dr. Gilbert has held professorships at Harvard University in the departments of Physics, Biophysics, Biology, Biochemistry and Molecular Biology, and Molecular and Cellular Biology. He is a Carl M. Loeb University Professor Emeritus at Harvard University. Dr. Gilbert founded and served on the Board of Directors of both Memory Pharmaceuticals Corp. and Paratek Pharmaceuticals, Inc. He also currently serves on the board of Amylyx Pharmaceuticals and is a General Partner of BioVentures Investors, an investment fund.
The Board of Directors has determined that Dr. Gilbert should serve on the Board for the following reasons: He provides the Board with a unique and extensive scientific background and expertise important to us in developing and commercializing molecular diagnostic products, and understanding technological developments in the industry. Dr. Gilbert provides the Board with business, managerial and financial expertise based on having founded, managed, and directed several companies in the healthcare industry.
Mark C. Capone, was appointed as the President and Chief Executive Officer, or CEO, of Myriad Genetics, Inc., and a member of the Board of Directors, effective July 1, 2015. Previously, he served as the President of Myriad Genetic Laboratories, Inc., a wholly owned subsidiary of Myriad. Mr. Capone joined the Company in October 2002, initially as Vice President of Sales until being named Chief Operating Officer in February 2006, a position he held until his promotion to President of Myriad Genetic Laboratories, Inc. in March 2010. Prior to joining Myriad, he served 17 years with Eli Lilly and Company, where he held positions as Product Development Manager, Manufacturing Plant Manager, and Area Sales Director. Mr. Capone received his B.S. degree in Chemical Engineering from Penn State University, graduating with highest distinction, his M.S. degree in Chemical Engineering from the Massachusetts Institute of Technology, and his M.S. in Management from the Massachusetts Institute of Technology.
The Board of Directors has determined that Mr. Capone should serve on the Board for the following reasons: He provides the Board with business and management expertise at a molecular diagnostic company from his 14 years of service as President, Chief Operating Officer and Vice President of Sales at Myriad Genetic Laboratories. Mr. Capone brings to the Board additional experience in operations management, product development, finance, sales, and other operational areas from his experience at Eli Lilly and Company. He also provides us with important expertise in investor relations based on his past interactions with our investor base. Additionally, Mr. Capone’s scientific, engineering and business management background and education provide important insights for the Board.
Lawrence C. Best, a director of Myriad since September 2009, is the Chairman and Founder of OXO Capital LLC, an investment firm focused on life sciences and therapeutic medical device companies, since 2007. He joined Boston Scientific Corporation in 1992 and served for 15 years as the Executive Vice President-Finance & Administration and Chief Financial Officer. Prior to joining Boston Scientific, Mr. Best was a partner in the accounting
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firm of Ernst & Young, where he specialized in serving multinational companies in the high technology and life sciences fields. He served a two-year fellowship at the SEC from 1979 to 1981 and a one-year term as a White House-appointed Presidential Exchange Executive in Washington, D.C. He is a founding director of the President’s Council at Massachusetts General Hospital. Within the past five years Mr. Best also has served on the Board of Directors of Haemonetics Corp, Biogen, Inc. and as Executive Chairman of Valtech Cardio Ltd., a privately held medical device company based in Tel Aviv, Israel. He received a B.B.A. degree from Kent State University.
The Board of Directors has determined that Mr. Best should serve on the Board for the following reasons: He provides the Board with broad financial accounting and reporting expertise in the technology and life sciences fields. Mr. Best provides extensive financial, business, management and investment expertise from his 15 years of service as the Chief Financial Officer at Boston Scientific. He also provides the Board with substantial experience in the event of potential mergers, acquisitions and licensing opportunities.
Heiner Dreismann, Ph.D., a director of Myriad since June 2010, had a successful career at the Roche Group from 1985 to 2006 where he held several senior positions, including President and CEO of Roche Molecular Systems, Head of Global Business Development for Roche Diagnostics and member of Roche’s Global Diagnostic Executive Committee. From 2006 to 2009, Dr. Dreismann served as the CEO of Vectrant Technologies, Inc., and until 2013 was the Interim CEO for GeneNews Limited. He currently serves on the Board of Directors of Ignyta, Inc. During the past five years, Dr. Dreismann served on the Board of Directors of Shrink Nanotechnologies, Med BioGene, Inc., Genenews Limited, and Interpace Diagnostics. He earned a M.S. degree in biology and his Ph.D. in microbiology/molecular biology (summa cum laude) from Westfaelische Wilhelms University (The University of Münster) in Germany.
The Board of Directors has determined that Dr. Dreismann should serve on the Board for the following reasons: He provides the Board with important business and managerial expertise from his more than 20 years at Roche, including specific expertise in developing and commercially launching diagnostic products. Furthermore, Dr. Dreismann has extensive experience in international markets, specifically in Europe, which is important as we seek to expand internationally. His scientific background and expertise also enable him to provide the Board with technical advice on product research and development. Dr. Dreismann has a diversified background in managing and serving as a director of several companies in the healthcare industry.
Dennis H. Langer, M.D., J.D., has been a director of Myriad since May 2004. From January 2013 to July 2014 he served as Chairman and Chief Executive Officer of AdvanDx, Inc. From August 2005 to May 2010, Dr. Langer served as Managing Partner of Phoenix IP Ventures, LLC. From January 2004 to July 2005, he was President, North America for Dr. Reddy’s Laboratories, Inc. From September 1994 until January 2004, Dr. Langer held several high-level positions at GlaxoSmithKline, and its predecessor, SmithKline Beecham, including most recently as a Senior Vice President of Research and Development. He has a broad base of experience in innovative R&D companies such as Eli Lilly, Abbott and Searle. He is also a clinical professor at the Department of Psychiatry, Georgetown University School of Medicine. Dr. Langer received a J.D. (cum laude) from Harvard Law School, an M.D. from Georgetown University School of Medicine, and a B.A. in Biology from Columbia University. He currently serves on the Board of Directors of Dicerna Pharmaceuticals, Inc. and Pernix Therapeutics Holdings, Inc. During the past five years, Dr. Langer served on the Boards of Delcath Systems, Inc. and Myrexis, Inc.
The Board of Directors has determined that Dr. Langer should serve on the Board for the following reasons: His medical background provides the Board with expertise on developing predictive, personalized, and prognostic testing products. Dr. Langer provides the Board with business and management expertise from senior positions at several major pharmaceutical companies, including expertise in research and development, which is critical to our development of molecular diagnostic testing services. He brings international experience as we implement strategies for global expansion. Dr. Langer has a diversified background in managing and serving as a director of several companies in the healthcare industry.
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S. Louise Phanstiel, a director of Myriad since September 2009, held several important positions at WellPoint, Inc. from 1996 to 2007, including as President, Specialty Products (2003 to 2007), Senior Vice President, Chief of Staff and Corporate Planning in the Office of the Chairman (2000 to 2003), and Senior Vice President, Chief Accounting Officer, Controller, and Chief Financial Officer for all WellPoint, Inc. subsidiaries, including Blue Cross of California (1996 to 2000). Previously, Ms. Phanstiel was a partner at the international services firm of Coopers & Lybrand where she served clients in life and property/casualty insurance, high technology, and higher education. She currently serves on the Board of Directors of Verastem, Inc. and the Stony Brook Foundation. Ms. Phanstiel received a B.A. degree in Accounting from Golden Gate University and is a Certified Public Accountant.
The Board of Directors has determined that Ms. Phanstiel should serve on the Board for the following reasons: She provides the Board with important expertise on the medical insurance industry based on her extensive experience in several senior positions at WellPoint and Blue Cross of California. This expertise is critical as we rely on third-party reimbursement for our molecular diagnostic services. Ms. Phanstiel also provides the Board with financial accounting and reporting expertise from her work at Coopers & Lybrand and as a Certified Public Accountant. In addition, she provides the Board with financial and investment expertise, as well as management expertise, resulting from managing and serving as a director of publicly-traded companies.
Our Board of Directors has reviewed the materiality of any relationship that each of our directors has with Myriad, either directly or indirectly. Based on this review, the Board has determined that the following members of the Board are “independent directors”‘‘independent directors’’ as defined by The NASDAQNasdaq Stock Market LLC:LLC ‘‘Nasdaq’’: Mr. Best, Dr. Dreismann, Dr. Gilbert, Dr. Henderson, Ms. Kumar, Dr. Langer, Dr. Newcomer, Ms. Phanstiel, Ms. Reitan, Dr. Skovronsky, and Ms. Phanstiel.Mr. Spiegelman.
Leadership Structure of the Board
The Board does not have a policy regarding the separation of the roles of ChairmanChair of the Board and Chief Executive Officer because the Board believes that it is in our best interests to make that determination based on the position and direction of the Company and the membership of the Board. However, at this time, and since our inception, the Board has determined that having an independent director serve as ChairmanChair of the Board is in the best interests of our stockholders. Thus, the roles of ChairmanChair of the Board and Chief Executive Officer are separated. This structure ensuresenables a greater role for the independent directors in the oversight of the Company and their active participation in setting agendas and establishing Board policies, priorities and procedures. This structure also allows the Chief Executive Officer to focus on the management of our day-to-day operations.
Board’s Role in the Oversight of Risk Management
The Board has an active role, directly and through its committees, in the oversight of our risk management efforts. The Board carries out this oversight role through several levels of review. It regularly reviews and discusses with members of management information regarding the management of risks inherent in the operations of our businesses and the implementation of our strategic plan, including our risk mitigation efforts.
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Each of the Board’s committees also oversees the management of risks that are under each committee’s areas of responsibility. For example, the Audit and Finance Committee oversees management of accounting, auditing, external reporting, internal controls, and cash investment risks. risks, and our compliance policies.
The Nominating and Governance Committee oversees our compliance policies,the Company’s Code of Conduct, conflicts of interest, director independence and corporate governance policies. The Compensation Committee oversees risks arising from compensation practices and policies. While each committee has specific responsibilities for oversight of risk, the Board is regularly informed by each committee about such risks. In this manner the Board is able to coordinate its risk oversight.
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Board’s Consideration of Diversity
The Board and Nominating and Governance Committee do not have a formal policy with respect to the consideration of diversity in identifying nominees for director positions. However, the Board and Nominating and Governance Committee strive to nominate individuals with a variety of diverse backgrounds, skills, qualifications, attributes and experience such that the Board, as a group, will possess the appropriate expertise, talent and skills to fulfill its responsibilities to manage the Company in the long-term interests of the stockholders.
Board’s Disclosure of Third PartyThird-Party Director and Nominee Compensation
No member of the Board of Directors has any agreement or arrangement with any person or entity other than the Company relating to compensation or other payment in connection with the Director’sdirector’s service as a Directordirector of the Company.
Committees of the Board of Directors and Meetings
Meeting Attendance.During the fiscal year ended June 30, 2017,2020, or fiscal 2017,2020, there were six16 meetings of the Board of Directors, and the various committees of the Board met a total of 1118 times. No director attended fewer than 75 percent of the total number of meetings of the Board and of committeeseach committee of the Board on which he or she served during fiscal 2017.2020. The Board has adopted a policy under which each member is encouraged, but not required to attend each Annual Meetingannual meeting of Stockholders.stockholders. At the time of our 20162019 Annual Meeting of Stockholders, all members of the Board of Directors were in attendance.
Audit and Finance Committee.Our Audit and Finance Committee met fiveseven times during fiscal 2017.2020. This committee currently has threesix members: Ms. PhanstielMr. Spiegelman (chair), Mr. Best, Ms. Kumar, Dr. Langer, Ms. Phanstiel, and Dr. Langer.Ms. Reitan. The Audit and Finance Committee’s roles and responsibilities are set forth in its written charter and include the authority to retain and terminate the services of our independent registered public accounting firm. In addition, the Audit and Finance Committee reviews annual financial statements; considers matters relating to accounting policy and internal controls; reviews the scope of annual audits; and monitors our processes for complyingcompliance with laws, regulations and our Code of Conduct. Our Board of Directors has determined that all members of the Audit and Finance Committee satisfy the current independence standards promulgated by the SEC and by The NASDAQ Stock Market LLC,Nasdaq, as such standards apply specifically to members of audit committees. The Board has determined that Mr. Spiegelman, Mr. Best and Ms. Phanstiel isare each an “audit‘‘audit committee financial expert,”’’ as the SEC has defined that term in Item 407 of Regulation S-K under the Securities Act of 1933, as amended, or the Securities Act. A copy of the Audit and Finance Committee’s written charter is publicly available on the Investor Information – Understanding Myriad/Corporate Governance section of our website atwww.myriad.com.
Please also see the report of the Audit and Finance Committee set forth elsewhere in this proxy statement.
Compensation Committee.Our Compensation Committee met twoseven times during fiscal 2017.2020. This committee currently has threefive members: Dr. Dreismann (chair), Dr. Gilbert, Dr. Henderson, Dr. Newcomer and Dr. Henderson.Ms. Phanstiel. The Compensation Committee’s role and responsibilities are set forth in its written charter and include reviewing, approving and making recommendations regarding our compensation policies, practices and procedures to ensure that legal and fiduciary responsibilities of the Board of Directors are carried out and that such policies, practices and procedures contribute to our success. The Compensation Committee also is responsible for evaluating and determining the compensation of our President and Chief Executive Officer and
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conducts its decision makingdecision-making process with respect to that issue without the President and Chief Executive Officer present. The Board has determined that all members of the Compensation Committee qualify as independent under the definition promulgated by The NASDAQ Stock Market LLC.Nasdaq.
The Compensation Committee is charged with establishing a compensation policy for our executives and directors that is designed to attract and retain qualified executive talent, to motivate them to achieve corporate
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objectives, and reward them for superior performance. Our Compensation Committee is also responsible for establishing and administering our executive compensation policies and equity compensation plans. The Compensation Committee meets at least two times per year and more often as necessary to review and make decisions with regard to executive compensation matters. As part of its review of these matters, the Compensation Committee may delegate any of the powers given to it to a subcommittee. A copy of the Compensation Committee’s written charter is publicly available on the Investor Information — Understanding Myriad/Corporate Governance section of our website atwww.myriad.com.
Further discussion of the process and procedures for considering and determining executive compensation, including the role that our executive officers play in determining compensation for other executive officers is included below in the section entitled “Executive‘‘Executive Compensation — Compensation Discussion and Analysis.”’’ The Compensation Committee has the authority to directly retain the services of independent consultants and other experts to assist in fulfilling its duties. For purposes of our fiscal year 20172020 executive compensation determinations, the Compensation Committee retained Mercer (US), Inc. (“Mercer”(‘‘Mercer’’) to update our peer group of companies and provide competitive market data on the salaries and short-term and long-term incentive compensation of executive officers at comparable companies within our industry. Mercer also was engaged to provide the Compensation Committee an analysis of, and recommendations for, annual salary compensation, short-term incentive compensation, and long-term incentive compensation for the President and CEO and other executive officers. Mercer performs services solely on behalf of the Compensation Committee and has no relationship with Myriad or its management except as may relate to performing such services. The Compensation Committee has assessed the independence of Mercer pursuant to SEC rules and the corporate governance rules of The NASDAQ Stock Market LLCthe Nasdaq and concluded that no conflict of interest exists that would prevent Mercer from independently representing the Compensation Committee.
Please also see the report of the Compensation Committee set forth elsewhere in this proxy statement.
Nominating and Governance Committee.Our Nominating and Governance Committee met two times during fiscal 2017. This committee currently has three members: Dr. Langer (chair), Dr. Henderson, and Ms. Phanstiel. This committee’s role and responsibilities are set forth in the Nominating and Governance Committee’s written charter and include evaluating and making recommendations to the full Board as to the size and composition of the Board and its committees, identifying and evaluating potential candidates and recommending the director nominees for election, developing and recommending corporate governance guidelines applicable to us, and reviewing and approving potential or actual conflicts of interest between our executive officers or members of the Board. The committee also oversees the annual Board performance evaluations, which may be submitted anonymously at the discretion of the director concerned, as well as our policy on plurality voting for director elections, which is described in “Proposal 1 — Election of Directors” of this proxy statement. The Board of Directors has determined that all members of the Nominating and Governance Committee qualify as independent under the definition promulgated by The NASDAQ Stock Market LLC.
If a stockholder wishes to nominate a candidate for director who is not included in our proxy statement, the stockholder must follow the procedures described in our Restated By-Laws and in “Stockholder Proposals and Nominations for Director” at the end of this proxy statement.
In addition, under our current corporate governance policies, the Nominating and Governance Committee may consider candidates recommended by stockholders as well as from other sources such as other directors or officers, third-party search firms or other appropriate sources. For all potential candidates, the Nominating and Governance Committee may consider all factors it deems relevant, such as a candidate’s personal integrity and sound judgment; business and professional skills and experience; independence, knowledge of the industry in which we operate, possible conflicts of interest, the extent to which the candidate would fill a present need on the Board; and concern for the long-term interests of the stockholders. In general, persons recommended by stockholders will be considered on the same basis as candidates from other sources. If a stockholder wishes to propose a candidate for consideration by the Nominating and Governance Committee under our corporate governance policies, for each annual meeting, the Committee will consider only one recommended nominee from any stockholder or group of affiliated stockholders, and such recommending stockholder or group must have held at least 5 percent of common stock for at least one year. All
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stockholder recommendations for proposed director nominees must be made in writing to the Nominating and Governance Committee, care of Myriad’s Secretary at 320 Wakara Way, Salt Lake City, Utah 84108, and must be received no later than 120 days prior to the first anniversary of the date of the proxy statement for the previous year’s Annual Meeting. The recommendation must be accompanied by the following information concerning the recommending stockholder:
The recommendation must also be accompanied by the following information concerning the proposed nominee:
The recommending stockholder must also furnish a statement supporting a view that the proposed nominee possesses the minimum qualifications as set forth below for director nominees and describing the contributions that the proposed nominee would be expected to make to the Board and to the governance of Myriad and must state whether, in the stockholder’s view, the proposed nominee, if elected, would represent all stockholders and not serve for the purpose of advancing or favoring any particular stockholder or other constituency of Myriad. The recommendation must also be accompanied by the written consent of the proposed nominee (i) to be considered by the Nominating and Governance Committee and interviewed if the Nominating and Governance Committee chooses to do so in its discretion, and (ii) if nominated and elected, to serve as a director.
For all potential candidates, the Nominating and Governance Committee may consider all factors it deems relevant, including the following threshold criteria:
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In addition, the Nominating and Governance Committee will take into account the extent to which the candidate would fill a present need on the Board, including the extent to which a candidate meets the independence and experience standards promulgated by the SEC and by The NASDAQ Stock Market LLC.
A copy of the Nominating and Governance Committee’s written charter is publicly available on the Investor Information — Understanding Myriad/Corporate Governance section of our website atwww.myriad.com.
The descriptions of our corporate governance policies contained in this proxy statement are qualified in their entirety and subject to the terms of such policies as modified by the Board of Directors from time to time. The following corporate governance documents are publicly available on the Investor Information — Understanding Myriad/Corporate Governance section of our website atwww.myriad.com:
Strategic Committee.Our Strategic Committee met two times during fiscal 2017. This committee currently has three members: Dr. Henderson (chair), Mr. Best and Dr. Dreismann. The committee’s roles and responsibilities are set forth in the Strategic Committee’s written charter and include advising and consulting with senior management on a broad range of strategic initiatives and making recommendations to the Board regarding such opportunities. A copy of the Strategic Committee’s written charter is publicly available on the Investor Information — Understanding Myriad/Corporate Governance section of our website atwww.myriad.com.
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Compensation Committee Interlocks and Insider Participation. Our Compensation Committee currently has three members: Dr. Dreismann (Chair), Dr. Gilbert, and Dr. Henderson. No member of our Compensation Committee has at any time been an employee of the Company. None of our executive officers is a member of the Compensation Committee, nor do any of our executive officers serve as a member of the Board of Directors or Compensation Committee of any entity that has one or more executive officers serving as a member of our Board of directors or Compensation Committee.
Nominating and Governance Committee. Our Nominating and Governance Committee met four times during fiscal 2020. This committee currently has four members: Dr. Langer (chair), Dr. Henderson, Ms. Phanstiel, and Ms. Reitan. This committee’s role and responsibilities are set forth in the Nominating and Governance Committee’s written charter and include evaluating and making recommendations to the full Board as to the size and composition of the Board and its committees, identifying and evaluating potential candidates and recommending the director nominees for election, developing and recommending corporate governance guidelines applicable to the Board, and reviewing and approving potential or actual conflicts of interest between our executive officers or members of the Board. The committee also oversees the annual Board performance evaluations, which may be submitted anonymously at the discretion of the director concerned. In adding new directors to the Board, the Nominating and Governance Committee engages a nationally recognized search firm to identify and help evaluate candidates. This process helps attract qualified and independent directors, as shown in the recent additions to the Board.
In October 2020, the Nominating and Governance Committee recommended to the Board, and the Board unanimously approved, an amendment to the Company’s Restated By-Laws and the Committee’s charter to change from plurality voting to majority voting for directors in non-contested elections. This change, which will
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be effective for the Class III directors standing for re-election at the annual meeting on December 4, 2020, is described in more detail in ‘‘Proposal 1 — Election of Directors’’ of this proxy statement. The Board of Directors has determined that all members of the Nominating and Governance Committee qualify as independent under the definition promulgated by Nasdaq.
Also in October 2020, the Nominating and Governance Committee recommended to the Board, and the Board unanimously approved, an amendment to the Company’s Corporate Governance Principles (available on our website) to institute a retirement age for directors. Specifically, when a director reaches 75 years of age, the director must tender his or her resignation before the next annual meeting at which the director is scheduled to stand for re-election. The Nominating and Governance Committee and the Board may then accept the resignation or not. If the resignation is not accepted, and the director wishes to continue service, then the director must again tender his or her resignation before each following annual meeting at which the director is scheduled to stand for re-election.
Finally in October 2020, the Nominating and Governance Committee recommended to the Board, and the Board unanimously approved, that the Company change from a fiscal year running from July 1 to June 30, to a calendar year fiscal year effective January 1, 2021. We believe this improves investor and analyst visibility into the Company’s financial performance by enabling easier comparison to our peer companies.
If a stockholder wishes to nominate a candidate for director who is not included in our proxy statement, the stockholder must follow the procedures described in our Restated By-Laws and in ‘‘Stockholder Proposals and Nominations for Director’’ at the end of this proxy statement.
In addition, under our current corporate governance policies, the Nominating and Governance Committee may consider candidates recommended by stockholders as well as from other sources such as other directors or officers, third-party search firms or other appropriate sources. For all potential candidates, the Nominating and Governance Committee may consider all factors it deems relevant, such as a candidate’s personal integrity and sound judgment; business and professional skills and experience; independence, knowledge of the industry in which we operate, possible conflicts of interest, the extent to which the candidate would fill a present need on the Board; and concern for the long-term interests of the stockholders. In general, persons recommended by stockholders will be considered on the same basis as candidates from other sources. If a stockholder wishes to propose a candidate for consideration by the Nominating and Governance Committee under our corporate governance policies, for each annual meeting, the Committee will consider only one recommended nominee from any stockholder or group of affiliated stockholders, and such recommending stockholder or group must have held at least 5 percent of common stock for at least one year. All stockholder recommendations for proposed director nominees must be made in writing to the Nominating and Governance Committee, care of Myriad’s Secretary at 320 Wakara Way, Salt Lake City, Utah 84108, and must be received no later than 120 days prior to the first anniversary of the date of the proxy statement for the previous year’s Annual Meeting. The recommendation must be accompanied by the following information concerning the recommending stockholder:
● | The name, address and telephone number of the recommending stockholder; |
● | The number of shares of our common stock owned by the recommending stockholder and the time period for which such shares have been held; |
● | If the recommending stockholder is not a stockholder of record, a statement from the record holder verifying the holdings of the recommending stockholder and a statement from the recommending stockholder of the length of time such shares have been held (alternatively, the recommending stockholder may furnish a current Schedule 13D, Schedule 13G, Form 3, Form 4 or Form 5 filed with the SEC, together with a statement of the length of time that the shares have been held); and |
● | A statement from the recommending stockholder as to the good faith intention to continue to hold such shares through the date of the next annual meeting. |
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The recommendation must also be accompanied by the following information concerning the proposed nominee:
● | The information required by Items 401, 403 and 404 of Regulation S-K under the Securities Act; |
● | A description of all relationships between the proposed nominee and the recommending stockholder, including any agreements or understandings regarding the nomination; |
● | A description of all relationships between the proposed nominee and any of our competitors, customers, suppliers, labor unions or other persons with special interests regarding the Company; and |
● | The contact information for the proposed nominee. |
The recommending stockholder must also furnish a statement supporting a view that the proposed nominee possesses the minimum qualifications as set forth below for director nominees and describing the contributions that the proposed nominee would be expected to make to the Board and to the governance of Myriad and must state whether, in the stockholder’s view, the proposed nominee, if elected, would represent all stockholders and not serve for the purpose of advancing or favoring any particular stockholder or other constituency of Myriad. The recommendation must also be accompanied by the written consent of the proposed nominee (i) to be considered by the Nominating and Governance Committee and interviewed if the Nominating and Governance Committee chooses to do so in its discretion, and (ii) if nominated and elected, to serve as a director.
For all potential candidates, the Nominating and Governance Committee may consider all factors it deems relevant, including the following threshold criteria:
● | Candidates should possess the highest personal and professional standards of integrity and ethical values; |
● | Candidates must be committed to promoting and enhancing the long-term value of Myriad for its stockholders; |
● | Candidates must be able to represent fairly and equally all stockholders without favoring or advancing any particular stockholder or other constituency of Myriad; |
● | Candidates must have demonstrated achievements in one or more fields of business, professional, governmental, community, scientific or educational endeavor, and possess mature and objective business judgment and expertise; |
● | Candidates are expected to have sound judgment, derived from management or policy making experience that demonstrates an ability to function effectively in an oversight role; |
● | Candidates must have a general appreciation regarding major issues facing public companies of a size and operational scope similar to Myriad, including governance concerns, regulatory obligations, strategic business planning, competition and basic concepts of accounting and finance; and |
● | Candidates must have, and be prepared to devote, adequate time to the Board of Directors and its committees. |
In addition, the Nominating and Governance Committee will take into account the extent to which the candidate would fill a present need on the Board, including the extent to which a candidate meets the independence and experience standards promulgated by the SEC and by Nasdaq.
A copy of the Nominating and Governance Committee’s written charter is publicly available on the Investor Information – Understanding Myriad/Corporate Governance section of our website at www.myriad.com.
The descriptions of our corporate governance policies contained in this proxy statement are qualified in their entirety and subject to the terms of such policies as modified by the Board of Directors from time to time. The following corporate governance documents are publicly available on the Investor Information — Understanding Myriad/Corporate Governance section of our website at www.myriad.com:
● | Policy on Annual Shareholder Meeting Attendance by Directors; |
● | Policy on Security Holder Communications with Directors; |
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● | Policy on Security Holder Recommendation of Candidates for Election as Directors; |
● | Procedures for Security Holders Submitting Nominating Recommendations; |
● | Policy Regarding Qualifications of Directors; |
● | Policy For Handling Complaints Regarding Accounting and Auditing Matters and Code of Conduct Matters; |
● | Policy on Limiting Service on Public Company Boards; |
● | Policy on New Director Orientation; |
● | Policy on Continuing Education for the Board; |
● | Policy on Related Person Transactions; |
● | Director and Executive Officer Stock Ownership Guidelines; |
● | Policy on Incentive Compensation Repayment; |
● | Corporate Governance Principles; |
● | Corporate Code of Conduct and Ethics and Whistleblower Policy; |
● | Policy on Incentive Compensation Repayment; |
● | Nominating and Governance Committee Charter; |
● | Audit and Finance Committee Charter; |
● | Compensation Committee Charter; and |
● | Research and Product Innovation Committee Charter. |
Research and Product Innovation Committee. Our former Strategic Committee was renamed and refocused as the Research and Product Innovation Committee in 2020. This Committee did not meet during fiscal 2020. This committee currently has five members: Dr. Newcomer (chair), Dr. Gilbert, Dr. Dreismann, Dr. Skovronsky, and Mr. Spiegelman. The committee’s roles and responsibilities are set forth in the Research and Product Innovation Committee’s written charter and include advising and consulting with senior management on a broad range of strategic and product development initiatives and making recommendations to the Board regarding such opportunities. A copy of the Research and Product Innovation Committee’s written charter is publicly available on the Investor Information — Understanding Myriad/Corporate Governance section of our website at www.myriad.com.
Stockholder Communications to the Board
Generally, stockholders who have questions or concerns should contact our Investor Relations department at (801) 584-1143. However, any stockholder who wishes to address questions regarding our business directly with the Board of Directors, or any individual director, should send his or her questions in writing to the ChairmanChair of the Board or a designated member of the Board at 320 Wakara Way, Salt Lake City, Utah 84108. Communications will be distributed to the Board, to the Nominating and Governance Committee, or to any individual director or directors as appropriate, depending on the facts and circumstances outlined in the communications. Items that are unrelated to the duties and responsibilities of the Board may be excluded, such as:
● | Junk mail and mass mailings; |
● | Resumes and other forms of job inquiry; |
● | Surveys; and |
● | Solicitations or advertisements. |
In addition, any material that is unduly hostile, threatening, or illegal in nature may be excluded, provided that any communication that is excluded will be made available to any outside director upon request.
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MANAGEMENT AND CORPORATE GOVERNANCE |
The following table sets forth the name, age (as of September 1, 2017)October 15, 2020) and position of each of our current executive officers. Unless indicated otherwise, general references to ‘‘executive officers’’ throughout this proxy statement refer to the following officers:
Name | Age | Position | ||||||
| ||||||||
| 58 | President and Chief Executive Officer and Director | ||||||
| Executive Vice President of Human Resources | |||||||
| ||||||||
| ||||||||
| 41 | Executive Vice President, General Counsel and Secretary | ||||||
| 46 | President of Myriad Womens Health, Oncology, and International | ||||||
Jerry S. Lanchbury, Ph.D. | Chief Scientific Officer | |||||||
Paul C. Parkinson | 54 | Executive Vice President for Reimbursement Strategy | ||||||
R. Bryan Riggsbee | 49 | Chief Financial Officer and Treasurer | ||||||
| ||||||||
Mark Verratti | President, |
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Paul J. Diaz |
Experience: | ||
Paul J. Diaz. Please see biography above under ‘‘Management and Corporate Governance — The Board of Directors.’’ |
Jayne B. Hart |
Experience: | ||
Jayne B. Hart, Executive Vice President of Human Resources, joined Myriad in May 2011. She has more than twenty years of professional experience in the human resources field. Prior to joining Myriad, Ms. Hart served as vice president of human resources at LANDesk Software, a global software company. Before that, she was vice president of human resources for 360networks, a wholesale telecommunications company, and at AT&T Wireless, a global telecommunications company, where she began her career. |
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MANAGEMENT AND CORPORATE GOVERNANCE |
Mark C. Capone. Please see biography above under “Management and Corporate Governance — The Board of Directors.”
Benjamin G. Jackson |
Experience: | ||
Benjamin G. Jackson, Executive Vice President, General Counsel and Secretary, joined Myriad in February 2006. He has held various positions in Myriad’s Legal Department, including serving as associate general counsel prior to assuming the role of general counsel. Mr. Jackson received his J.D. degree from the J. Reuben Clark Law School at Brigham Young University and a B.S. degree in microbiology, immunology, and molecular genetics from the University of California Los Angeles. |
Nicole Lambert |
Experience: | ||
Nicole Lambert, President of Myriad Womens Health, Oncology, and International, has served in her current role since April 1, 2019. Ms. Lambert joined the Company in June 2001. Prior to her current position, she served as General Manager for the Oncology and Urology business units and Vice President of Dermatology. Prior to joining Myriad, she was a genetic councilor at LabCorp. Ms. Lambert received her Bachelor’s degree in Biology and Sociology from Boston College and her Master’s degree in Genetic Counseling from Mt. Sinai School of Medicine at New York University. |
Jerry S. Lanchbury, Ph.D. |
Experience: | ||
Jerry S. Lanchbury, Ph.D., Chief Scientific Officer, joined the Company in September 2002 as Senior Vice President of Research. In July 2005 he was appointed Executive Vice President of Research, a position he held until he was named to his current position in February 2010. Dr. Lanchbury came to us from GKT School of Medicine, King’s College where he had served as Reader in Molecular Immunogenetics and Head of Molecular Immunogenetics Unit since 1997. Dr. Lanchbury earned his Ph.D. from the University of Newcastle upon Tyne and 1st Class Honours, B.Sc. ‘‘Biology of Man & his Environment’’ degree from the University of Aston. |
Paul C. Parkinson |
Experience: | ||
Paul ‘‘Chip’’ Parkinson, Executive Vice President for Reimbursement Strategy, joined the Company in 2016. Previously, he was president of OmedaRx and chief pharmacy officer of Regence Blue Cross Blue Shield health plans. In this role, Mr. Parkinson was responsible for managing $1.7 billion in annual pharmacy spending for the Regence Blue Cross Blue Shield health plans in Utah, Washington, Oregon and Idaho, which have more than two million members. Prior to that, he was vice president, Managed Markets and general manager, Urology at Myriad. During his tenure, Prolaris was included in the NCCN Guidelines for prostate cancer and received Medicare reimbursement. Before joining Myriad, he served in management and managed care leadership roles at Pfizer Inc. Mr. Parkinson received his B.S. degree in Communications from Weber State University. |
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Alexander Ford, President of Myriad Genetic Laboratories, Inc. (“MGL”), a wholly owned subsidiary of Myriad, has served in his current role since July 1, 2015. Mr. Ford joined Myriad in June 2010. Before being named to his current position, he served as the Chief Commercial Officer of MGL. Prior to joining Myriad, Mr. Ford held leadership positions at Novartis, Sanofi-Aventis, Nektar Therapeutics and Pfizer in the areas of Marketing Research, Product Marketing, Managed Care, Sales and Business Development. He has more than 25 years of experience in the pharmaceutical and biotechnology industries. Mr. Ford received his B.A. degree in Communications from the University of North Carolina, Wilmington and his M.A. degree from New York University.
MANAGEMENT AND CORPORATE GOVERNANCE |
Gary A. King, Executive Vice President, International Operations, joined us in July 2010. Mr. King has been employed in the life sciences industry for more than 25 years. From June 2008 to June 2010, he was the Chief Executive Officer of AverDx Incorporated, an international biotechnology company that develops novel biomarker diagnostics for critical diseases. From June 2002 to February 2008, he served as Vice President, International Operations at Biosite Incorporated, a developer of diagnostic products and antibody development technologies where he spent six years building and leading all of the company’s commercial activities outside the United States. Mr. King received his B.A. degree in Zoology from Pomona College and a M.B.A. degree from Stanford University.
Jerry S. Lanchbury, Ph.D., Chief Scientific Officer, joined the Company in September 2002 as Senior Vice President of Research. In July 2005 he was appointed Executive Vice President of Research, a position he held until he was named to his current position in February 2010. Dr. Lanchbury came to us from GKT School of Medicine, King’s College where he had served as Reader in Molecular Immunogenetics and Head of Molecular Immunogenetics Unit since 1997. Dr. Lanchbury earned his Ph.D. from the University of Newcastle upon Tyne and 1st Class Honours, B.Sc. “Biology of Man & his Environment” degree from the University of Aston.
Richard M. Marsh, Esq.,Executive Vice President, General Counsel and Secretary, joined Myriad in November 2002. He previously served as Director of Intellectual Property (2001-2002), Acting General Counsel and Secretary (2000-2001)
R. Bryan Riggsbee | ||
Age: 48 | Experience: | |
R. Bryan Riggsbee, Chief Financial Officer and Treasurer, and Interim President and Chief Executive Officer from February 6 to August 12, 2020, joined us in October 2014. He previously served 10 years with Laboratory Corporation of America (LabCorp) where his most recent position was as Senior Vice President of Corporate Finance with responsibility for the financial planning and analysis and treasury functions. Prior to LabCorp, Mr. Riggsbee served in various finance roles with General Electric and began his career in the audit division of KPMG. He received a B.A. in Accounting from North Carolina State University, a B.A. in political science from the University of North Carolina at Chapel Hill and an M.B.A. from Northwestern University. Mr. Riggsbee is a Certified Public Accountant licensed in the State of North Carolina. | ||
Mark Verratti | ||
Age: 51 | Experience: | |
Mark Verratti, President of Myriad Neuroscience and Myriad Autoimmune., and
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We have entered into standard employment agreements with alleach of ourthe above executive officers. The employment agreements forFor each ofsuch officer, we have also entered into our named executive officersstandard Severance and Change in Control Agreements, which are described elsewhere in the proxy statement under the caption “Executive‘‘Executive Compensation — Narrative Disclosure to Summary Compensation Table and 20172020 Fiscal Year Grants of Plan-Based Awards Table.”
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Compensation Discussion and Analysis |
Compensation Discussion and Analysis
Executive Summary
Overview
We are a leading molecular diagnosticpersonalized medicine company, with the goal of providing physicians and their patients with critical information to guide healthcare management. Our goal is to manage our business to maximize the value we provide through our services, making the Company more successful and valuable, and hence maximizing our long-term stockholder value. Our compensation programs are designed to support these goals, with the primary objectives of attracting and retaining executive talent, motivating our executive officers through pay-for-performance metrics to enhance our growth and profitability, and increasing long-term stockholder value.
The fourWith the arrival of a new President and Chief Executive Officer in August 2020, and two-thirds of the Board consisting of directors added within the last 16 months, the Company has begun the process of revamping its approach to executive compensation. As discussed in more detail below, the Company is also transitioning from a fiscal year running from July 1 to June 30 to a calendar year fiscal year. This leaves a six-month transition period in the second half of calendar year 2020, which is referred to herein as the ‘‘2020 transition period’’. This proxy statement will report (a) compensation paid under our fiscal year 2020 plan; (b) compensation to be paid during the 2020 transition period; and (c) certain elements of compensation to be paid under our new calendar 2021 plan. Beginning with the 2020 transition period and continuing into calendar 2021, the three principal components of our compensation program for executive officers are:
● | Annual salary; |
● | Short-term incentive compensation in the form of an annual cash incentive bonus; |
● | Long-term incentive compensation in the form of (a) restricted stock units (RSUs) subject to time-based vesting and (b) performance-based restricted stock units (PSUs) subject to financial metrics followed by time-based vesting. |
We believe that these compensation components provide the appropriate balance of short-term and long-term compensation and incentives to our executives to drive our performance, success and long-term growth. As indicated in the charts below, our pay mix for fiscal 2020 largely followsfollowed that of our peers, with the majority of our compensation in the form of long-term incentive compensation.
Peer Pay Mix data is a composite of our peer group data and published survey data.
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EXECUTIVE COMPENSATION Compensation Discussion and Analysis |
Our compensation program seeks to align compensation with Company performance, and hence reward our executive officers for their contribution to our growth, profitability and increased stockholder value through the recognition of individual leadership, initiatives, achievements and other contributions. Each yearFor fiscal 2020, our Compensation Committee approvesapproved individual Management Business Objectives (“MBOs”(‘‘MBOs’’) for each executive officer that, which consist of (i) pre-established financial performance targets for the Company such as revenue and adjusted operating income (“Company Financial MBOs”), and (ii) individual objectivesgoals tailored to each executive, (“Individual MBOs”). Theand awarded short-term annual cash bonuses based on individual achievement against these MBOs. In determining these bonus amounts, however, the Compensation Committee reviewsalso applied a 50% deduction multiplier based on Company financial performance for fiscal 2020. The Committee then awarded the achievementbonuses in the form of RSU grants in order to preserve cash while the Company recovers from the impact of the COVID-19 pandemic on its business.
For short-term cash bonuses for our executive officers for the 2020 transition period, our Compensation Committee has approved Company performance and financial goal metrics as well as individual MBOs. Thus, the annual cash bonus component of an executive’s compensation will be balanced between these performance and financial metrics on one hand and the individual MBOs in determining compensationon the other, with greater weight to be paidgiven to our executive officers.the performance and financial metrics. For example, performance and financial metrics for the 2020 transition period will represent 70% of an executive’s total score and individual MBOs will account for the remaining 30%, as in the following illustration.
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EXECUTIVE COMPENSATION Compensation Discussion and Analysis |
Long-term incentives, such as equity grants, will also be based at least in part on the Company’s performance against performance metrics set by the Compensation Committee, as in the following illustration. For the 2020 transition period and calendar 2021, for example, 50% of an executive’s equity grant will be RSUs and 50% will be PSUs, with the metrics determining the ultimate number of PSUs awarded comprised of earnings per share and relative total shareholder return.
50% of Annual Share Grant | 50% of Annual Share Grant | |||
Restricted Stock Units (RSUs): | Performance Stock Units (PSUs): | |||
• Number of shares fixed in advance by the compensation committee • Time-based vesting | • Target number of shares set by the compensation committee • Actual number of shares granted depends on the company financial performance • Time-based vesting • Based on adjusted EPS and total share holder return targets |
This compensation structure for the 2020 transition period and calendar 2021 differs from previous years primarily in that (a) no new three-year LTI cash bonus plans will be instituted, starting in the 2020 transition period; and (b) short-term cash incentives and long-term equity incentives will be weighted toward Company financial performance more than individual objectives. The Compensation Committee believes that the MBOs are based onthis new structure represents an appropriate mix of individual objectives and financial performance targets, and individual objectives that provide appropriate pay-for-performance metrics towhich incentivize executive officers to increase our profitability, success and long-term stockholder value.
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Fiscal Year 20172020 Performance
For fiscal year 20172020 our revenues were up twodeclined 25 percent year-over-year to $771$639 million and we had GAAP earnings per share of $0.32($2.69) and pro formanon-GAAP earnings per share of $1.05. During($0.08) which declined relative to fiscal year 2017,2019. Two factors significantly detrimentally impacted our revenue and profitability in fiscal year 2020. The first was the Current Procedural Terminology (CPT) code transition under the Centers for Medicare and Medicaid Services (CMS) clinical laboratory fee schedule for hereditary cancer testing codes. On January 1, 2019, following recommendations from the American Medical Association Current Procedural Terminology Editorial Panel, the CMS clinical laboratory fee schedule was updated discontinuing the use of legacy hereditary cancer CPT codes 81211 and 81213, which reduced reimbursement levels. Given that these codes were utilized in a number of long-term commercial payer contracts, the Company was forced to renegotiate many of these contracts at rates lower than historical averages. This led to a meaningful pricing headwind for the hereditary cancer business in fiscal year 2020. Secondly, Myriad’s business was significantly impacted by the global COVID-19 pandemic in fiscal year 2020 which caused a dramatic decline in elective testing by physicians in the second half of the fiscal year. Despite these challenges, during fiscal year 2020, we believe we accomplished manya number of our strategic objectives that positionsposition the Company for future long-term growth. We made substantial progress on our five strategic critical success factors to: i) stabilize hereditary cancer revenue, ii) grow new product volume, iii) expand reimbursement coverage for new products, iv) increase RNA kit revenue internationally, and v) improve profitability with our Elevate
Notwithstanding the headwinds faced by the Company in fiscal year 2020, Program.
We continued generating strongMyriad generated positive cash flows from operations and in fiscal year 2017 we generated over $100with $64 million in GAAPnon-GAAP free cash flow. We ended the year with $199a strong balance sheet with approximately $255 million in cash, cash equivalents, and marketable investment securities and plan to continue to exercise a balanced approach to capital deployment, including investing for future growth, paying down debt associated with recent acquisitions, and business development activities and share repurchases.activities.
An explanation of the adjustments to our GAAP financial measures used in this proxy statement and a reconciliation of the adjusted financial measures to the comparable GAAP financial measures are included in Appendix A to this proxy statement.
During fiscal year 2017 we reduced the level of our share repurchases to 1.6 million shares as we focused on reducing the balance on our credit facility associated with the Assurex acquisition. Since fiscal year 2010, we have purchased over 49 million shares of our common stock under our stock repurchase program for $1.239 billion at a weighted average price of $25.18 per share.
Focusing on our longer-term growth, over the past five years, we have accomplishedour revenue has declined at a 5 percent compound annual rate of negative three percent since fiscal year 2016. This negative growth rate (“CAGR”) for revenues.trajectory is primarily due to declines in hereditary cancer revenue as a result of competition following the loss of our patents related to hereditary cancer testing, which declines have been partially offset by new product growth over that period, as well as declines in fiscal
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EXECUTIVE COMPENSATION Compensation Discussion and Analysis |
year 2020 due to the impact of the COVID-19 global pandemic and hereditary cancer coding transition discussed above. In fiscal year 2020, 73 percent of our test volume and 50 percent of our revenue was derived from new (non-hereditary cancer) products. Going forward, we believe the Company is positioned to return to revenue growth rates given increasing stability in hereditary cancer revenues and continued growth from new products.
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Over the past five years, we experienced a 2-20 percent annual stockholder return on our stock price versus a 1615 percent return for the NASDAQNasdaq composite index and a 5 percent return for the Nasdaq Healthcare Providers Stock Index reflecting the increased competition we faced after the early patent expirationloss of key hereditary cancer patents covering greater than ninety percent of our revenue in fiscal year 2014. Additionally, we ended2013. We included the first quarterNasdaq Healthcare Providers Stock Index in our Stock Performance Chart as the Nasdaq Healthcare Providers Stock Index is comprised of companies which also operate in the healthcare industry. We caution that historical stock price performance, including the stock price performance shown in the chart below, is not necessarily indicative of, nor is it intended to forecast, the potential future performance of our fiscal year 2018 with a stock price of $36.18, which represents a 40% increase in our stock price over our fiscal year 2017 year-end price. Taking into account our first quarter of fiscal year 2018, we experienced a 76% return on our stock price over the past twelve months for the quarter ending September 30, 2017 versus 22% for the NASDAQ composite index over the same period.common stock.
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EXECUTIVE COMPENSATION Compensation Discussion and Analysis |
In addition to our financial results during fiscal year 2017,2020, we also achieved the following progress on our fivethree critical success factors:
StabilizeBuild Upon a Solid Hereditary Cancer RevenueFoundation
● | Grew hereditary cancer test volumes at a six percent year-over-year growth rate prior to the global COVID-19 pandemic. |
● | Received reimbursement and launched the BRACAnalysis®Diagnostic System in Japan to help physicians determine which people affected with breast and ovarian cancer have Hereditary Breast and Ovarian Cancer (HBOC) syndrome and qualify for additional diagnostic and medical management. BRACAnalysis previously was approved by Japan’s Ministry of Health, Labour and Welfare in November 2019 for this indication. |
● | Published a new study for riskScore®in the Journal of the American Medical Association Network Open demonstrating the ability of Myriad’s polygenic risk score to modify breast cancer risk stratification in women diagnosed with pathogenic mutations in common breast cancer genes. |
Grow New Product Volume
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● | Launched a new radiographic progression (RP) enhancement tool for the Vectra® test report that is personalized based on the age, gender and adiposity of the patient. The new test report will provide individual risk of a patient’s risk of RP within one year. |
● | Received FDA approval for BRACAnalysis CDx as a companion diagnostic test for patients with metastatic pancreatic cancer seeking treatment with Lynparza (olaparib). |
● | Received FDA approval for the myChoice CDx® test for use as a companion diagnostic by healthcare professionals to identify advanced ovarian cancer patients with positive homologous recombination deficiency status, who are eligible or may become eligible, for first-line maintenance treatment with Lynparza (olaparib) in combination with bevacizumab. |
● | Received FDA approval for the BRACAnalysis CDx® test for use as a companion diagnostic by healthcare professionals to identify men with metastatic castration-resistant prostate cancer who are eligible for treatment with Lynparza® (olaparib). |
● | Published a new study in Prenatal Diagnosis demonstrating that Prequel® is the only non-invasive prenatal screening (NIPS) test that outperforms traditional measures of aneuploidy detection across all classes of obesity. Other NIPS testing methodologies can have failure rates up to 24 percent in obese patients leading the American College of Gynecology to recommend against using NIPS in patients with significant obesity. |
Expand Reimbursement Coverage for our hereditary cancer business.
Grow new product volumeNew Products
● | Announced coverage decision from UnitedHealthcare, the largest commercial payer in the United States, covering GeneSight for patients that have a diagnosis of major depressive disorder or anxiety and have failed at least one prior medication. |
● | Received favorable coverage decisions for Prolaris®from six new commercial health plans including one of the top five national providers of health insurance. In aggregate the new health plans represent over 26 million covered lives. |
● | Published the precision medicine analysis of the GUIDED study in the Journal of Clinical Psychiatry. The study evaluated 787 patients at baseline who were on medications with known gene drug interactions. The analysis showed that patients who had their treatment guided by GeneSight saw a 70 percent improvement in remission, 42 percent improvement in response, and a 23 percent improvement in symptoms, all of which were statistically significant. |
● | Vectra was included in an American College of Rheumatology publication stating that the test was one of several disease activity measures that met a minimum standard for regular clinic use. |
● | Received favorable new guidelines for Prolaris including the National Comprehensive Cancer Network updating their professional guidelines to include Prolaris across all major risk categories and the European Urology Association Guidelines for 2020 recommending biomarker testing, including Prolaris for prostate cancer patients where there is clear clinical actionability. |
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EXECUTIVE COMPENSATION Compensation Discussion and Analysis |
● | Published a GeneSight meta-analysis covering four major clinical studies and 1,556 patients. Across the patient populations, patients who received guided care with GeneSight saw a 43 percent improvement in symptoms relative to treatment as usual, a 40 percent improvement in response rates, and a 49 percent improvement in remission rates, all of which were highly statistically significant. |
● | Published a new study in Genetics in Medicine comprising over 93,000 patients which showed the challenges associated with ethnicity-based guidelines for carrier screening used by both the American College of Medical Genetics (ACMG) and the American College of Gynecology (ACOG). In the study, following ethnicity-based guidelines from ACOG and ACMG would have resulted in 77 percent of carriers of severe genetic disease being missed. |
Expand reimbursement coverage for new products
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Increase RNA kit revenue internationally
Improve profitability with Elevate 2020
Performance Pay for Fiscal Year 20172020
To reflect our payAs noted above, the compensation structure for performance philosophy, based on the Company’s performance for fiscal year 2017, our Compensation Committee:
Additionally,2020 compensation plan, however, our Compensation Committee incorporated the themes of our new compensation structure by heavily weighting Company financial performance in fiscal 2020. The Committee also took into account the impact of COVID-19 on the Company’s business. Thus, the Compensation Committee determined to freezeapproved the levelfollowing features of RSUs awarded to ourfiscal 2020 compensation for NEOs and executive officers at the levels officers.
● | awarded fiscal year 2020 annual bonuses to our NEOs at 38 to 50 percent of target based on each NEO’s MBOs score reflecting the degree to which individual Company objectives were achieved (as part of our effort to reduce expenses during the COVID-19 pandemic, the bonuses were paid this year in the form of a restricted stock unit grant which vests over a two-year period rather than in cash); |
● | awarded no cash payments under our fiscal year 2018-2020 three-year, long term cash incentive plan as the target metrics were not achieved; |
● | Withheld any pay increases to our executive officer salaries until at least January 1, 2021; and |
● | awarded long-term equity incentive compensation in the form of 1⁄2 RSUs, vesting over a four-year period, and 1⁄2 PSUs, where the final number of shares awarded depends on Company financial performance (and also vesting over a four-year period). |
The below chart shows CEO pay by year. For fiscal year 2016 aligning2020 the chart shows the combined total compensation to our goal of between the 50th to 75th percentile of our compensation benchmarks.both Mr. Riggsbee and Mr. Capone:
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EXECUTIVE COMPENSATION Compensation Discussion and Analysis |
Say-on-Pay Results
At our last annual meeting of stockholders in December 2016,2019, we held a stockholder advisory vote on the fiscal year 20162019 compensation of our NEOs. This is generally referred to as a “Say-on-Pay”‘‘Say-on-Pay’’ vote. ISS and Glass Lewis recommended for the approval of our Say-on-Pay vote and our stockholders approved the compensation of our NEOs with 9591 percent of stockholder votes cast in favor of our Say-on-Pay resolution for fiscal year 2016.2019. Notwithstanding this high approval percentage, we continued our outreach to our stockholders to identify and understand feedback that they may have about our executive compensation with the goal of sustaining a high level of approval. Our stockholders consistently made the following comments:
Additionally, we considered concerns raised byThis ISS, and Glass Lewis, with respectand stockholder feedback was considered in devising the new compensation structure for the 2020 transition period and the Compensation Committee’s decisions on fiscal 2020 compensation, both discussed in detail above. The Compensation Committee will monitor further stakeholder feedback, Company performance, and market developments for potential further improvements to our executive compensation program regarding (i) our Board of Directors’ discretion to accelerate vesting on equity incentive awards, (ii) the lack of a one year minimum vesting requirement for all equity awards, and (iii) that the Company’s Claw Back Policy does not providecompensation structure for the recoupment of equity incentive compensation. We have addressed these items as discussed below.
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Changes To Our Pay Practices and Philosophy
In response to the feedback expressed by our stockholders, ISS and Glass Lewis, we are making the following changes, or continuing prior responsive practices, to our executive compensation program:
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Pay Practices
Previously,Additionally, we have adopted other practices that reflect the high standards our Compensation Committee seeks to attain for our compensation philosophy and pay practices, such as:
● | A significant portion of equity granted to all executive officers, not only NEOs, will be restricted stock units subject to predetermined, objective, formula-based, financial performance metrics; |
● | The period required for full vesting of restricted stock units—other than in exceptional cases, such as the two-year vesting for RSUs granted in lieu of cash bonuses in August 2020—shall be greater than four years; |
● | Stock ownership guidelines for our directors (three times annual cash retainer) and executive officers (for President and CEO, three times annual base salary, and for other executive officers, two times annual base salary); |
● | Prohibiting hedging the economic risk of holding our stock, including trading in our stock on a short-term basis, short sales of our stock and similar transactions, for which waivers are not granted; |
● | Prohibiting any tax gross-up payments by the Company with respect to compensation paid to any employee or director; |
● | Prohibiting executives and directors from engaging in any transaction in which they may profit from short-term speculative swings in the value of the Company’s securities. This includes ‘‘short sales’’ (selling borrowed securities that the seller hopes can be purchased at a lower price in the future) or ‘‘short sales against the box’’ (selling owned, but not delivered securities), and ‘‘put’’ and ‘‘call’’ options; |
● | Prohibiting the pledge or use of our stock to secure a margin or other loan, for which waivers are not granted; |
● | Prohibiting the Company’s repurchase of underwater stock options; |
● | Prohibiting the repricing of stock options and other awards without stockholder approval; |
● | Prohibiting the grant of in-the-money stock options; and |
● | Employing each executive officer on an ‘‘at will’’ basis without any guarantee as to employment term, salary, or bonus. |
CEO Pay Ratio
The following is a reasonable estimate prepared under the Securities and Exchange Commission (SEC) rules, of the ratio of the annual total compensation of our President and Chief Executive Officer to the median of the annual total compensation of our other employees. We determined that as of April 30, 2020 our employee population consisted of approximately 2,609 U.S. employees. All international employees were excluded in the 5% de minimis exemption adjustment as permitted by SEC rules. We then selected our median employee based on the W-2 calculated income of our U.S. employees as of December 31, 2019. For employees hired on or after January 1, 2020, we used their W-2 income earned as of April 30, 2020.
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EXECUTIVE COMPENSATION Compensation Discussion and Analysis |
For Fiscal Year 2020:
● | The annual total compensation of the employee identified at median of the Company (excluding the CEO) was $89,031; |
● | As disclosed in the summary compensation table, the annual total compensation of our President and CEO for purposes of determining the CEO Pay Ratio was $10,377,799 which combines the total compensation for Mr. Capone and Mr. Riggsbee for fiscal year 2020; and |
● | based on this information, for fiscal year 2020, the ratio of the annual total compensation of our President and CEO to the median of the annual total compensation of all other U.S. employees was estimated to be 117 to 1. |
This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodologies prescribed by the SEC. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. Using consistently applied measures, we did not make any assumptions, adjustments or estimates with respect to compensation paid to any employees or directors;
In connection with the annual review of our executive compensation program and compensation pay components, we will continue our general approach of establishing Company Financial MBOs and Individual MBOs for our executive officers. These MBOs assist the Compensation Committee in evaluating the performance of our executive officers and to then reward them through short- and long-term incentiveannualize compensation for any employee not employed for the value they deliverentire year.
Due to our stockholders as demonstratedthe flexibility afforded by the enhanced growth and profitabilityrules of the Company.SEC in calculating the pay ratio amount, the ratio calculated may not be comparable to the CEO pay ratio presented by other companies.
Fiscal Year 20172020 Named Executive Officer Compensation
Elements of our Compensation Program
TheIn recent years up to and including fiscal 2020, the compensation program for our executive officers consistsconsisted principally of a base salary, an annual cash incentive bonus, long-term compensation in the form of a three-year cash incentive bonus award, and equity incentive compensation in the form of restricted stock units with a performance-based factor applicable to our NEOs. We believe thatWhile each of these elementscomponents of our compensation strike an appropriate balance to incentivize and reward our executive officers for ongoing, short- and long-term performance.program are discussed in detail in the following pages, the following is a brief introduction:
Base Salary: An annual base salary provides the foundation of our compensation program and ensures that the executive officer is being paid ongoing compensation, which allows us to attract and retain high-quality talent.
Annual Cash Bonus: The annual cash incentive bonus forms an important part of our compensation strategy by providing an incentive to reward short-term performance as measured by Company performance and accomplishment of individualIndividual MBOs.
Long-Term Cash Bonus: The long-term cash incentive bonus awardsaward has been phased out starting in the 2020 transition period and calendar 2021 as the Compensation Committee emphasizes equity for long-term incentive compensation also formgoing forward. For plans instituted September 2019 or before, payments will continue to be made to the extent required metrics are achieved, but no new plans will be instituted starting in September 2020. As noted herein, required metrics were not achieved and no payment was made under the plan established in fiscal 2018 and potentially payable in September 2020.
Equity: Equity incentive compensation formed an important part of our previous compensation strategy.strategy and will be further emphasized going forward. These incentive bonus awards and equity grants reward our executive officers for the long-term performance of Myriad and help to ensure that our executive officers have a stake in our long-term success by providing an incentive to improve our overall growth and value. For example, under our long-term cash incentive awards,refocused equity grants, financial and share price performance metrics are measured by achieving three-year financial performance targets reflecting growth of revenue, diversifying revenues and improving operating margins. These performance metricsincluded that align with our strategic goals and objectives and thus alignsalign the executive officers’ interests with stockholders’ long-term interests.
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The Compensation Committee, in collaboration with management, attempts to develop an overall compensation program that incentivizes the executive officers to achieve their objectives without encouraging them to take excessive risks to the business. We believe that this is accomplished through the balance of the various elements of our compensation program, including the establishment of annual MBOs for each of the executive officers to appropriately guide their performance objectives, establishment of preset annual and three-year growth financial performance targets, and preset limits on cash incentive compensation.program.
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EXECUTIVE COMPENSATION Compensation Discussion and Analysis |
Formulating and Setting Executive Compensation
The Compensation Committee is responsible for formulating, evaluating and approving the compensation, including the award of equity compensation, for our executive officers, including our President and CEO. The Compensation Committee also assists the full board in establishing appropriate incentive compensation and equity-based plans generally for all employees and is responsible for administering these plans.
For fiscal year 2017,2020, the Compensation Committee retained Mercer (US) Inc. (“Mercer”) for the purpose of updating our peer group of companies and to provide competitive market data on the salary, short-term incentive compensation and long-term incentive compensation of executive officers at comparable companies within our industry. The Compensation Committee uses this competitive market data on compensation in determining annual salary compensation, short-term (annual) incentive compensation and long-term incentive compensation (both cash and equity incentive compensation) for the President and CEO and other executive officers of the Company (the “2017‘‘2020 Mercer Executive Compensation Review”Review’’).
As a basis for the source market data for the 20172020 Mercer Executive Compensation Review, Mercer utilized compensation data from the following group of 1512 peer companies. Mercer recommended that we retain nine companies which is ourfrom last year’s peer group from last fiscal year.and added three new companies. We believe the selected peer group of companies reflects our industry and aligns with the ISS and Glass Lewis selected peer group for Myriad. Presently, 109 of the 1512 companies in our peer group are companies which were selected by ISS as part of ISS’s compensation pay review from last year, and 98 of the 1512 companies in our peer group of companies are companies selected by Glass Lewis as part of Glass Lewis’ compensation pay review from last year. Only one of the 12 companies in our peer group were not in either the ISS or Glass Lewis peer group from last year.
Exact Sciences Corporation | ||||
lncyte Corporation | lonis Pharmaceuticals, Inc | Neogenomics, Inc. | ||
Neurocrine Biosciences Inc. | ||||
United Therapeutics Corporation |
In addition, Mercer gathered competitive market data from published survey data in the biotech industry for similarly sized entities as reflected in the 20162019 Mercer US Global Premium Executive Remuneration Suite and the 20172020 Radford Global Life Sciences Survey. To determine competitive market compensation, where possible, composite survey data were equally blended with the proxy data from our peer group set forth above. Compensation data for the peer group were collected from available proxy-disclosed data. This information was gathered and analyzed for the 25th, 50th and 75th percentiles for annual salary, short-term incentive pay elements and long-term incentive pay elements. Where possible, our executive officers were matched to appropriate proxy and survey positions based on job content and level of responsibility. Proxy-based and survey-based salaries were aged to 20172020 at an annual rate of 33.5 percent, the average 2016/20172019/2020 salary increase for executives in the U.S. Restricted stock units were valued at fair market value (the closing price of our common stock) on the date of grant.
We believe that the compensation information obtained from the 20172020 Mercer Executive Compensation Review provides us appropriate compensation data and benchmarks, because it is derived from companies that are in our industry, share similar corporate structures, and have similar factors such as number of employees, market value, revenues, net income, product pipeline and gross margins. Through Mercer, we have selected those companies that we believe represent the various factors of our business as outlined above.
Utilizing the composite peer group data provided to us in the 20172020 Mercer Executive Compensation Review, the Compensation Committee analyzed, among other criteria, the average salary, short-term incentive bonus compensation and long-term incentive bonus compensation (both cash and equity compensation) for each of our executive officers at the 25th, 50th and 75th percentile ranges. In addition, for long-term incentive equity compensation, the Compensation Committee analyzed, among other criteria, the average equity compensation for each of our executive officers at the 25th, 50th and 75th percentile range from the Mercer composite compensation data. The Compensation Committee also analyzed our equity burn rate, issued equity overhang, total equity overhang and stockholder value transfer. Finally, the Compensation Committee considered the number of restricted stock units awarded to executive officers as a group, as compared to all restricted stock units awarded. In so doing, the Compensation Committee noted that it anticipates that this ratio will continuehas become increasingly
38 |
EXECUTIVE COMPENSATION Compensation Discussion and Analysis |
weighted towards overall employees based upon recent initiatives to be weighted toward the executive officer group as we transition away from our historical practiceincrease equity ownership among a broader set of granting equity incentive compensation to allMyriad employees. For example, newin fiscal year 2020 all Company employees below the director level are now compensated under our profit sharing plan, rather throughwith management roles received stock-based compensation and all employees ranked as top-25 percent employees in annual merit reviews received a small equity compensation.grant.
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The Compensation Committee has approved a pay-for-performance philosophy for the compensation of our executive officers that is intended, in general, to provide base salary, bonus and total compensation within the 50th to 75th percentile of comparable companies in our industry.industry taking into account the financial performance of the Company. However, we may award compensation above the 75th percentile when deemed appropriate to further promote and achieve the primary objectives of our compensation programs. The comparable group of companies on which we rely to corroborate our determinations are those represented by the peer groups utilized in the Mercer Executive Compensation Review and those that participated in the industry survey reports used by Mercer. Within the scope of this pay-for-performance philosophy, we have determined the various components of each executive’s compensation package based on various factors, including: the executive’s particular background, training and relevant work experience; the executive’s role and responsibilities and the compensation paid to similar persons in comparable companies represented in the compensation data that we utilized; the demand for individuals with the executive’s specific talents and expertise and our ability to attract and retain comparable talent; Company Financial MBOs and Individual MBOs; the other expectations of the executive for the position; and the comparison to other executives within our Company having similar skills and experience levels and responsibilities.
Incident to the change from a July-June fiscal year to a calendar year, the Compensation Committee approved full-year goals for all forms of variable compensation for the 2020 transition period, which will consist of the six months between July 1, 2020 and December 31, 2020, with the recognition that these goals will likely be re-evaluated at the start of the calendar year in January 2021.
Base Salary
Each year we evaluate base salaries as part of our management performance program, and establish each executive’s base salary for the ensuing year. In establishing base salaries, we assess the executive officer’s performance in each of the areas in whichof their individual MBOs, were established, the financial performance of the Company in the areas of responsibility of the executive officer, the overall financial performance of the Company, the experience of the executive, the executive’s role and responsibilities and particular background, and other significant accomplishments and contributions of the executive officer. An executive’s base salary is also evaluated together with other components of the executive’s compensation.
As part of our Elevate 2020 Plan and our goal of increasing our operating profitability, our executive officers recommended, which the Compensation Committee accepted, to not receive a cost-of-living adjustment or other increase to their base salaries forFor fiscal year 2018. Accordingly, for fiscal year 2018,2020, the base salary of our President and CEO and CFO and Treasurer are both belowand our named executive officers were increased by an average of 4.4% (as compared to fiscal 2019) and all were between the 50th percentile50 to 75 percent range of baseour peer group. For the 2020 transition period, no salary increases were made in part due to the impact on our business from the COVID-19 global pandemic. There will be no increase to the salary of our President and CEO in the 2020 transition period because he began his service, and his salary was determined, within such period. Salaries may be revisited after our transition to a calendar fiscal year, starting on January 1, 2021. Furthermore, salaries for our peer group as providednamed executive officers were reduced by 30 percent for three months for the pay periods of April 15, 2020 through July 15, 2020 to reduce expenses during the peak impact period from the COVID-19 pandemic to date. This led to lower salary payments to our named executive officers during fiscal year 2020 and will lead to lower payments in the 2017 Mercer Executive Compensation Report.2020 transition period. The apparent year-over-year increases in salaries for our named executive officers (where applicable) shown in the table below are attributable to the majority of this temporary pay reduction falling in fiscal year 2020 rather than in the 2020 transition period (while the original annual base salary amounts remained the same).
Name and Position | Fiscal 2018 Base Salary ($) | Fiscal 2017 Base Salary ($) | % Increase | |||||||||
Mark C. Capone | 852,000 | 852,000 | 0 | % | ||||||||
Alexander Ford | 499,200 | 499,200 | 0 | % | ||||||||
R. Bryan Riggsbee | 432,000 | 432,000 | 0 | % | ||||||||
Jerry S. Lanchbury, Ph.D. | 493,782 | 493,782 | 0 | % | ||||||||
Richard M. Marsh | 493,782 | 493,782 | 0 | % |
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We believe that maintaining all
EXECUTIVE COMPENSATION Compensation Discussion and Analysis |
Name and Position | 2020 Transition Period Base Salary ($)(1) | Fiscal 2020 Base Salary ($) | % Increase | |||||||||
R. Bryan Riggsbee | ||||||||||||
Interim President and Chief Executive Officer, Chief | ||||||||||||
Financial Officer and Treasurer | 477,000 | 552,796 | (2) | (14%) | ||||||||
Mark C. Capone | ||||||||||||
Former President and Chief Executive Officer | 0 | (3) | 870,560 | N/A | ||||||||
Alexander Ford | ||||||||||||
Former Chief Operating Officer. | 557,000 | (4) | 513,271 | 9% | ||||||||
Jerry S. Lanchbury, Ph.D. | ||||||||||||
Chief Scientific Officer | 519,000 | 493,496 | 5% | |||||||||
Nicole Lambert | ||||||||||||
Group President Myriad Women’s Health, Oncology, and | ||||||||||||
International | 420,000 | 386,859 | 9% | |||||||||
Bernard F. Tobin | ||||||||||||
Former President, Autoimmune | 0 | (5) | 431,295 | N/A | ||||||||
Gary A. King | ||||||||||||
Former Executive Vice President of Myriad International
|
| 428,000
| (6)
|
| 405,725
|
|
| 5%
|
|
(1) | 2020 transition period base salary figures are annualized. |
(2) | Mr. Riggsbee’s fiscal year 2020 salary consists of his partial year salary of $483,000 while he served as Chief Financial Officer and Treasurer, his partial year salary of $723,000 while he served as interim President and Chief Executive Officer, with the application of the temporary salary reductions due to the global coronavirus pandemic. |
(3) | Mr. Capone resigned as Chief Executive Officer effective February 6, 2020 and will not receive a salary for the 2020 transition period. |
(4) | Mr. Ford resigned from the Company effective October 2, 2020. |
(5) | Mr. Tobin’s position was eliminated on May 1, 2020 as part of Myriad’s leadership restructuring and he will not receive a salary in the 2020 transition period. |
(6) | Mr. King retired from the Company on October 1, 2020, at which point he entered a consulting agreement under which he will continue to provide consulting and transitional services to the Company until December 31, 2020 (which period may be extended by mutual agreement of the parties). Effective April 1, 2020, Mr.King was no longer an executive officer of the Company. |
The decision to delay increasing our executive officers’ base salary at FY 2017 levelsfor the 2020 transition period reflects the commitmentneed to monitor expenses while we navigate the global coronavirus pandemic, and contribution of the executive officerswe plan to our goal of increasing our operating profitability, while being set at a level that appropriately attracts and retains key talent necessary to support the continued growth of the Company.
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Annual Cash Incentive Bonus
The annual cash incentive bonus amount is determined as part of our management performance program. As a part of this review, we assessThe Compensation Committee assesses (a) the Company’s performance against specific, objective financial metrics and (b) the executive officer’s performance inagainst each of the areas in which MBOs were established, our financial performance in the areas of responsibility of the executive officer, our overall financial performance and other significant accomplishments and contributions of the executive officer.their individual MBOs.
For fiscal year 2017,2020, for purposes of determining the annual cash incentive bonuses paid to our NEOs and executive officers other thanincluding our President and CEO, the Compensation Committee used a formulaic approach, based on a target incentive bonus as a percentage of base salary determined in early fiscal year 2017,2020, Company performance, and the achievement of Individual MBOs. The target incentive bonus as a percentage of base salary for each executive officer (other than our President and CEO) ranged from 45 to 60 percent, depending on the responsibilities and experience of the executive officer, and was based on the target incentive bonus percentage from our peer group for each of the individual executive officers. For our former President and CEO the target incentive bonus as a percentage of base salary was 100 percent. Our Interim President and CEO also had a target incentive bonus as a percentage of base salary of 100 percent for the period in fiscal year 2020 in which he served as Interim President and CEO. The annual cash incentive bonus amount for each executive officer and our President and CEO was then determined based on the following formula: annual base salary of
(Annual Salary) * (Target Bonus %) * (Individual MBO Achievement) * 50% (Company performance) = Bonus Amount
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EXECUTIVE COMPENSATION Compensation Discussion and Analysis |
The 50% multiplier was an across the executive officer times (a) the executive officer’s applicable target incentive bonus percentage, and times (b) the executive officer’s performance goals score (based on degree of accomplishment of Company Financial MBOs and Individual MBOs as determined by the Compensation Committee). The annual cash bonus amount is capped, and, as a percentage, can never exceed 130 percent of the executive officer’s applicable target incentive bonus percentage.
For fiscal year 2017, our pre-established financial performance targets wereboard reduction based on our revenuesthe Company’s financial underperformance in fiscal 2020, specifically total revenue of $639 million and adjusted operating income. We achieved $771 million in revenues and adjusted operating incomeloss of $97($29) million. Based on these financial results, compared to the pre-established targets, the Compensation Committee determined that the Company Financial MBOs applicable to each executive officer had been achieved at the 87 percent level. Each executive officer was thenalso scored on his or her Individualindividual MBOs, as discussed below for our NEOs under “‘‘Named Executive Officer Performance for Fiscal 2017”2020’’. The composite MBO performance scoresPerformance Goals Score for the executive officer group ranged from 8085 to 95100 percent. Because we only partially achieved the revenueBoth Mr. Capone and adjusted operating income performance goals we set, and based on the accomplishment of Individual MBOs for the executive officer group, the annual cash incentive bonus for fiscal year 2017 for the executive officer group was reduced by 5 to 20 percent, respectively, from target levels for each of the executive officers.
For our President and CEO, the Compensation Committee approved pre-determined, objective, formula-based financial performance metrics, along with the achievement of Individual MBOs which cannot increase but may only reduce his cash incentive bonus. The annual cash incentive bonus for our President and CEO was granted under our 2013 Executive Incentive Plan (the “Section 162(m) Incentive Plan”), which is a plan that permits qualifying executive compensation to be deducted for federal income tax purposes under Section 162(m). Based on the responsibilities and experience of our President and CEO, and based on the target incentive bonus percentages from our peer group, the Compensation Committee set the target incentive bonus asMr. Tobin were paid a percentage of base salary at 100%their accrued bonus in cash pursuant to their separation agreements. In order to preserve cash, the Board decided to pay the 2020 MBO bonuses for our President and CEO. Accordingly, our President and CEO’sall other named executive officers in the form of a one-time restricted stock unit grant vesting over two years, with a grant date value equivalent to the cash incentive bonus for fiscal year 2017 wasamount earned by such executive officer as determined based on the following formula:
Base Salary × Target Incentive Bonus Percentage (100%) × Total Performance Factor.
The Total Performance Factor was based on fiscal year 2017 Company revenues and adjusted operating income and is calculated as follows:
(the Revenue Performance Factor × 0.50) + (the Adjusted Operating Income Performance Factor × 0.50).
The Revenue Performance Factor equals the quotient of fiscal year 2017 total revenues divided by the designated total revenue target for fiscal year 2017. The Adjusted Operating Income Performance Factor equals the quotient of fiscal year 2017 adjusted operating income divided by the designated adjusted operating income target for fiscal year 2017. However, as set forth in the Section 162(m) Incentive Plan in no event may the Total Performance Factor exceed 130% and so there is a separate cap on the total amount that can be paid. The Compensation Committee has the discretion to reduce the amount payable based on the accomplishment of the Individual MBOs or for any other reason in the discretion of the Compensation Committee but it may not increase the amount of the award.
Based on our financial results for fiscal year 2017, the Compensation Committee determined that Mr. Capone had achieved a Total Performance Factor of 87%. Accordingly, the Compensation Committee awarded an annual cash incentive bonus for Mr. Capone for fiscal year 2017 in the amount of $741,240.Committee.
The Compensation Committee determined the annual cash incentive bonuses for our NEOs for fiscal year 20172020 (which were paid in the form of a restricted stock unit grant) as set forth in the chart below.
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Name and Position | Target Incentive Bonus (as a % of Fiscal 2017 Base Salary) | MBO Performance Goals Score (as a %) | Fiscal 2017 Bonus Payment ($) | |||||||||
Mark C. Capone | 100 | 87 | 741,240 | |||||||||
Alexander Ford | 60 | 82 | 245,606 | |||||||||
R. Bryan Riggsbee | 60 | 89 | 230,688 | |||||||||
Jerry S. Lanchbury, Ph.D. | 50 | 87 | 214,795 | |||||||||
Richard M. Marsh, Esq. | 50 | 90 | 222,202 |
Name and Position | Target Incentive Bonus (as a % of Fiscal 2020 Base Salary) | MBO Performance Goals Score (as a %) | Company Multiplier (as a %) | Total Performance Factor | Fiscal 2020 Bonus Payment | |||||||||||||||
R. Bryan Riggsbee | 60 | 35 | 50 | 18 | 29,584 | |||||||||||||||
Interim President and Chief | 100 | 100 | 50 | 50 | 150,625 | |||||||||||||||
Mark C. Capone | 100 | NA | NA | NA | 184,211 | |||||||||||||||
Alexander Ford | 60 | 89 | 50 | 45 | 150,643 | |||||||||||||||
Jerry S. Lanchbury, Ph.D. | 50 | 100 | 50 | 50 | 131,599 | |||||||||||||||
Nicole Lambert | 50 | 94 | 50 | 44 | 99,934 | |||||||||||||||
Bernard J. Tobin | 50 | NA | NA | NA | 95,163 | |||||||||||||||
Gary A. King
|
| 50
|
|
| 100
|
|
| 50
|
|
| 50
|
|
| 108,193
|
|
(1) | Bonuses were paid in the form of RSUs with two-year vesting with the exception of Mr. Capone and Mr. Tobin, whose bonuses were paid in cash pursuant to their separation agreements. |
We believe that this cash incentive bonus compensation, isstructured as a share grant rather than a cash payment, was appropriate based on the performance of the executive officer group forCompany in fiscal year 2017. The Compensation Committee believed the financial performance targets set for our annual cash incentive bonuses for our NEOs to be challenging, without any guarantee that the performance targets could be accomplished.2020.
For fiscal year 2018,the 2020 transition period, the Compensation Committee has decided to utilize a comparable formulaic approachchange the components for determining the annual cash incentive bonus for executive officers asthat were used for fiscal year 2017. 2020, while retaining the same overall formulaic approach. The general formula for calculating bonus amounts for the 2020 transition period, and likely continuing for calendar year 2021, is as follows:
(Annual Salary) * (Target Bonus %) * [F*(Company Financial Performance) + G*(Individual MBO Achievement)] = Bonus Amount
Where F = weighting of Company financial metrics; G = weighting of individual MBOs; and F will be weighted more heavily than G.
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EXECUTIVE COMPENSATION Compensation Discussion and Analysis |
Application of this new formula will focus primarily on the achievement of revenue and operating profit targets for the year, such that these financial metrics will be weighted more heavily than individual performance goals. For example, for the 2020 transition period the Compensation Committee weighted the financial metrics at 70% and the individual MBOs at 30%.
The Compensation Committee has also established the following target incentive bonus percentages for our new President and CEO and for our NEOs who are currently serving as executive officers, which will be used in determining annual cash incentive bonus amounts for fiscal year 20182020 transition period performance. TheseWith the exception of the increase for Ms. Lambert, these are unchanged from the targets for each position that were established for fiscal year 2017. Additionally, Mr. Capone’s fiscal year 2018 annual cash incentive bonus was granted under our 2013 Executive Incentive Plan based on the predetermined financial performance metrics set by our Compensation Committee.2020.
Executive Officer | Target Incentive Bonus | 2020 Transition Period) | ||
| 100 | |||
| ||||
R. Bryan Riggsbee | 60 | |||
Jerry S. Lanchbury | 50 | |||
| 60 |
Long-Term Incentive Awards
To incentivize and reward long-term performance by our executives, we currently providehave historically provided two forms of long-term incentive compensation: a three-year cash incentive bonus and the award of restricted stock units. These cashinitial and equity-based incentive awards help ensure that our executive officers have a stake in our long-term success by providing an incentive to improve the overall growth and value of Myriad. We believe that this fosters an executive culture that aligns our officers’ interests with the long-term interests of our stockholders. The Compensation Committee determines the terms of allannual equity incentive awards for our NEOs, including our President and CEO. Beginning in fiscal year 2015, we granted our employees, executive officers and Board restricted stock units rather than stock options in order to reduce the dilutive effect of our equity compensation program.awards.
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Three-Year Cash Incentive Bonus. In December 2012, the Compensation Committee established a long-term cash incentive bonus program for our executive officers based on predetermined, objective financial formula-based performance targets to be accomplished at the end of the third ensuing fiscal year. In September 2020, the Compensation Committee discontinued this program, such that no further plans will be instituted. However, payouts over the next two fiscal years, under plans instituted before September 2020, may still be made under the terms of each such plan as described below.
For any amount to be paid under these three-year cash bonus plans, the minimum predetermined financial metric thresholds must be surpassed; otherwise, no bonus amount will beis paid. As reflected in the following table, the financial metrics for these payouts are reviewed and determined when each three-year award is established. The three-year incentive bonus award amount is based on a target bonus amount as a percentage of base salary of 20 percent for our President and CEO and 15 percent for our other executive officers. For all executive officers, the target bonus percentage and bonus amount is capped.capped at 150% of the target bonus. Based on the Company’s financial performance, we have only made a payout under our long-term cash incentive bonus program for the three-year performance periodperiods ending with FY2015.FY2015 and FY2019. For the other three-year performance periods ending in FY2016, FY2017, FY2018, and FY2017,FY2020, none of the target thresholds were achieved, so no payouts were made.
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
The following table summarizes each of the three-year cash incentive awards established for our executive officers.
Date of Award |
| Three-Year Performance Period | Performance Criteria | Payout Under Plan | ||||||
December 2012 | FY 2013-2015 | Revenue (50%), EBITDA (25%) and EPS (25%) | Payout at 47.55% of Target Award | |||||||
September 2013 | FY 2014-2016 | Revenue (50%) and EBITDA (50%) | No Payout | |||||||
September 2014 | FY 2015-2017 | Revenue (50%) and Net Income (50%) | No Payout | |||||||
September 2015 | FY 2016-2018 | Revenue (50%) and EBITDA (50%) | ||||||||
September 2016 | FY2017-2019 | Revenue (50%), Adjusted Operating Margin (25%) and Diversification of Product Revenue (25%) | ||||||||
September 2017 | FY 2018-2020 | Revenue (50%), Adjusted Operating Margin (25%) and Diversification of Product Revenue (25%) | No Payout | |||||||
September 2018 | FY 2019-2021 | Revenue (50%), Adjusted Operating Margin (25%) and Diversification of Product Revenue (25%) | TBD | |||||||
September 2019 | FY 2020-2022 | Revenue (50%), Adjusted Operating Margin (25%) and Diversification of Product Revenue (25%) | TBD |
We believe that the three-year cash incentive bonus adds an additional long-term incentive metric to motivate our executives to achieve financial metrics and operational goals, which will benefit long-term shareholder value. In particular, the recent performance objectives tied to adjusted operating margin and diversification of our product revenues are aligned with our announced strategic, long-term goals. The Compensation Committee believes the financial performance targets to be challenging, without any guarantee that the performance targets could be accomplished, in light of growing operational, reimbursement and competitive factors which may adversely affect the Company’s financial performance. Thus, the performance targets are set at a level that, if obtained, the Company would have accomplished continued strong financial performance. The three-year cash incentive bonus awards made to our NEOs in fiscal year 2017, and the maximum amount payable under these awards, are reported in the table for 2017 Fiscal Year Grants of Plan Based Awards.
Initial Equity Awards. Executives who join us, who are often granted equity, are granted restricted stock unit awards. The amount of the initial restricted stock unit award is determined based on the executive’s position and analysis of the competitive practices of the companies similar in size as represented in the compensation data that we review with the goal of creating a total compensation package for new executives that is competitive with other similar companies and that will enable us to attract high quality management personnel. One-fourth of each initial equity award will vestvests on an annual basis over four-plus years.
Annual Equity Incentive Awards. In response to continued comments from our stockholders, we will continue to issue long-term equity incentive compensation grants in restricted stock units with units. Historically these grants have included entirely time-based vesting for all executive officers other than expected NEOs. For these time-based RSUs, one-fourth of the units granted vestingvested on an annual basis over four-plusa period of four years. Additionally, for
For our NEOs, theall restricted stock units awarded arewere subject to achievement of a predetermined, formula-based, one-year revenuefinancial target that must behave been achieved in order for
33
the award to commence vesting. These performance-based RSUs are referred to as PSUs. Thus, for our NEOs, the actual number of restricted stock units earned will bewas determined based on the percentage achievement of the predetermined revenuefinancial target with no award being earned if athe minimum revenue threshold iswas not achieved; thereafter, and only if the minimum threshold has beenwas achieved, vesting of the award iswas based on the NEO’s continued employment with us. Once the final number of shares to be awarded was determined, these vested in the same way as the time-based RSUs.
For the 2020 transition period, all executive officers, expected NEOs and others, were awarded a mix of 50% time-based RSUs and 50% PSUs. The performance metrics for these PSUs will be measured against earnings per share and relative total shareholder return for the period from July 1, 2020 to June 30, 2021. We believe this mix, especially these metrics for the PSU portion of equity grants, better aligns executive incentives with long-term shareholder interests by allowing stock performance to impact the amount of equity awarded to executive officers.
In determining the amount of equity compensation to be awarded, the Compensation Committee will considerconsiders various factors, including our financial and operating performance for the applicable period; the executive officer’s contribution to our performance; the anticipated contribution of the executive officer to our future
43 |
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
performance; the accomplishments of the executive officer as measured by achievement of MBOs; a review of compensation for comparable positions in our peer group from our benchmarking studies; and the total compensation of the executive officer and the anticipated retentive effect of the grant of additional equity compensation. We also take into consideration the total number of our outstanding shares of our common stock, the relative dilution to stockholders, as well as our gross equity burn rate, issued equity overhang and total equity overhang. The size of the restricted stock unit award generally increases as the rank and responsibilities of the executive officer increases.
Restricted stock unit awards are made once a year at our Compensation Committee meeting held in connection with the Board of Director meetings that are generally held in September. The Board customarily determines the dates of its meetings for the ensuing year at a meeting of the Board in the preceding year. Thus, the dates on which equity compensation is granted are set well in advance. The Compensation Committee does not time the grant of equity compensation with respect to the release of material nonpublic information, whether or not that information may favorably or unfavorably impact the price of our common stock. Restricted stock unit awards for the executive officers, including our President and CEO, are approved by the Compensation Committee.
Based on the 20172020 Mercer Executive Compensation Review, which calculated market annual guidelines at the 50th and 75th percentile, the long-term incentive value of the annual restricted stock unit awards made to our executive officers on September 14, 2016,October 8, 2020, based on fiscal year 20162020 performance to our executive officers, including our President and CEO, and CFO and Treasurer, waswere below the 50th percentile, with two executive officers between the 50th and 7550th percentile. For our NEOs, it was determined, that, based on our revenues for fiscal year 2017,2020, and adjusted for the impact of the COVID-19 pandemic, that the financial performance metric for fiscal year 20172020 associated with the grant of these restricted stock units was met;achieved at the 82 percent threshold; hence, there was noa reduction in the number of restricted stock units originally awarded.awarded to our NEOs. The long-term incentive value of the annual restricted stock unit awards made to our NEOs in fiscal year 20172020 is reported in the table for 20172020 Fiscal Year Grants of Plan Based Awards and was determined at their grant date fair value calculated in accordance with ASC Topic 718 based on achieving 100%82 percent of the award.
We felt the RSU award levels were appropriate based on the comparative long-term peer group compensation data from the 20172020 Mercer Executive Compensation Review, given the Company’s performance relative to its peers, the individual accomplishments of our NEOs during fiscal year 2016, including our President and CEO,2020 relative to their MBOs and to continueour goal of continuing to place an increased weighting of compensation on long term equity compensation. We also believe these equity awards now moving toare consistent with our goal of placing our NEOs in the 50th-75th percentile for our President and CEO and CFO and Treasurer, wereare appropriate based onupon the Company’s financial performance. Thus, these equity awards appropriately reward our executives for their consistent past performance, and incentivize our executives to work hard to continue to deliver similar performance and to remain employed at the Company.
Compensation Objectives
The primary objectives of our Compensation Committee in establishing and maintaining our executive compensation programs are to:
● | Attract and retain the best possible executive talent; |
● | Motivate our executive officers to enhance our growth and profitability; |
● | Increase long-term stockholder value; and |
● | Reward the executive officers for their contribution to our growth, profitability and increased stockholder value through the recognition of individual leadership, initiatives, achievements and other contributions. |
The specific directives of the Compensation Committee are to provide appropriate short and long-term compensation and incentives, in the form of cash and equity, that motivate and reward the accomplishment of individual and corporate objectives and that align executive officer compensation with the creation of stockholder value. To achieve these objectives,Though the greater weight in determining executive compensation will be given to objective financial metrics, such as revenue and adjusted operating income, the Compensation Committee has adopted and implemented a compensation plan that baseswhere our executive officers’ compensation is based in part on a variety of factors set forth in MBOs.
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
34
Establishment and Use of Management Business Objectives
The Compensation Committee has implemented an annual management performance program for the purpose of establishing annual performance objectives for our executive officers to align their performance with the overall goals and objectives for the Company. This process commences in the fourth quarter of each fiscal year as each executive officer meets with our President and CEO to establish annual MBOs for the ensuing fiscal year. After review and discussion, the President and CEO finalizes the executive officer’s MBOs for the ensuing fiscal year. Similarly, our President and CEO meets with the Compensation Committee at the end of each fiscal year to establish his MBOs for the ensuing fiscal year which, after review and discussion, are finalized by the Compensation Committee. On October 8, 2020, the Compensation Committee approved all MBOs for our executive officers for the 2020 transition period. During the fiscalcalendar year 2021, additional MBOs mayare expected to be established and assigned to aneach executive officer, including our President and CEO.
At the end of the ensuing fiscal year (or the 2020 transition period), each executive officer’s performance for the fiscal year is reviewed, including an assessment by management and the Compensation Committee of the achievement of each executive officer’s respective MBOs. At this time, the President and CEO calculates and recommends to the Compensation Committee an annual cash incentive bonus amount and salary adjustment for the executive officers, other than himself. The Compensation Committee, after further review and discussion with our President and CEO, then determines the annual cash incentive bonus for the concluding fiscal year and base salary amount for the ensuing fiscal year for the executive officers, other than the President and CEO. As noted above, no salary increases were made for the 2020 transition period, given COVID considerations, and any increases will take place at the earliest in calendar year 2021.
In the case of our President and CEO, the Compensation Committee makes its review and determinations for the President and CEO’s salary and annual cash incentive compensation without any recommendations from our President and CEO, who is not present in any portions of the meetings of the Compensation Committee where his compensation is calculated, discussed and approved. At the end of the fiscal year, the Compensation Committee determines the annual salary amount of our President and CEO for the ensuing fiscal year.year, which determination may be delayed in exceptional circumstances such as the COVID pandemic. The annual cash incentive bonus for our President and CEO’sCEO is based on the Company’s accomplishment of its financial goals and the President and CEO’s accomplishment of his performance metrics as previously determined by our Compensation Committee as measured against our final, audited financial statements for the fiscal year. In determining the annual cash incentive bonus amount, the Compensation Committee also reviews and discusses the accomplishment of the President and CEO’s MBOs for the fiscal year in determining whether any reductions of the annual incentive bonus amount is appropriate.Committee. The annual cash incentive bonus amount, salary adjustments, and long-term incentive compensation for our President and CEO are reported to the independent members of the Board of Directors.
The MBOs for each executive officer for each fiscal year consist of (i) pre-established financial performance targets for the Company, which for fiscal year 2017 were based on total revenues and adjusted operating income, and (ii) individual objectives tailored to each executive. Each executive officer receives the same Company Financial MBOs as part of their respective MBOs. The Company Financial MBOs represents 50 percent of the total weighting of each executive officer’s MBOs.
From time to time, for those designated, an executive officer’s incentive compensation may be awarded and administered under our 2013 Executive Incentive Plan, whereby 100 percent of short-term incentive cash compensation (annual cash incentive bonus) and grants of restricted stock units are based on pre-established, objective financial performance targets and are subject to a cap. It is intended that incentive compensation paid under the 2013 Executive Incentive Plan will be deductible for tax purposes under Section 162(m) of the Internal Revenue Code; however, the Compensation Committee may award compensation which does not qualify under Section 162(m) in order to accomplish the compensation goals of the Company.
The MBOs for our NEOs for fiscal year 20172020 were as follows:
Mark C. Capone, Former President and CEO— manage the Company to achieve designated financial targets for total revenues and adjusted operating income for fiscal year 2017; achieve designated financial targets for non-hereditary product revenues;2020; achieve financial targets for increased revenue potential resulting from new reimbursement coverage decisions; and achieve designated milestones to advance the Company’s product pipeline.pipeline; and achieve Elevate 2020 projects to increase operating income.
Alexander Ford, President Myriad Genetic Laboratories, Inc.Former Chief Operating Officer — manage the Company to achieve designated financial targetscomplete a complete technology and operations assessment; develop organization strategy for total revenuestechnology, billing, customer service, and adjusted operating income for fiscal 2017; achieve designated financial targets for Myriad Genetic Laboratories; achieve designated targets for managed care contract coverage for designated products;business unit intelligence services; and achieve designated financial targets for new products in specified indications.improve billing and revenue operations results.
35
R. Bryan Riggsbee, Interim President and CEO, Chief Financial Officer and Treasurer— manage the Company to achieve designated financial targets for total revenues and adjusted operating income forthe second half of fiscal year 2017; achieve designated financial target for cost savings; achieve designated financial targets relating2020 from a revenue and earnings per share standpoint; assess the Company’s billing and collection processes to improve the integration of our acquisitions; evaluatebudgeting and complete at least one strategic, revenue generating newforecasting process; and successfully execute the neuroscience business opportunity; and manage Enterprise Risk Management function.expansion.
Jerry S. Lanchbury, Ph.D., Chief Scientific Officer— managecomplete transition to cloud based laboratory information management system and integrate new technology into the Company tohereditary cancer testing process;
45 |
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
validate riskScore in Hispanic ancestry and make progress in other ethnicities; publish Vectra manuscripts for radiographic progression risk and cardiovascular risk; prepare commercial laboratory for myChoice CDx launch; and drive organizational integration in R&D department.
Nicole Lambert, Group President of Myriad Women’s Health, Oncology, and International — achieve designated financialrevenue and operating income targets for total revenuesthe Myriad Women’s Health, Oncology, and International business units; grow new products, and expand guidelines and reimbursement for new products.
Bernard J. Tobin, Former President of Myriad Autoimmune — achieve revenue and operating income targets for the Myriad Autoimmune business unit; increase reimbursement coverage for Vectra; improve Vectra value proposition through product enhancements; and improve patient engagement on repeat testing.
Gary A. King, Former Executive Vice President of International — achieve revenue and operating profit targets for the Myriad International business unit; increase reimbursement for companion diagnostics and EndoPredict outside the United States; develop roadmap for future international products; and divest the German clinic.
For the 2020 transition period, MBOs will be streamlined and, as discussed above, will constitute a proportion of each executive officer’s scoring for cash bonuses that is smaller than the financial metrics of revenue and adjusted operating income for fiscal year 2017; advance product pipeline through approval of companion diagnostic tests; contribute to designated product launch; complete discovery phase for at least one Stage 1 discovery project; and expand companion diagnostic programs into additional indications.income.
Richard M. Marsh, Executive Vice President, General Counsel and Secretary — manage the Company to achieve designated financial targets for total revenues and adjusted operating income for fiscal year 2017; continue to develop and implement Company’s intellectual property strategy; oversee compliance plans for affiliated group, including international activities; and participate in industry intellectual property initiatives.
Named Executive Officer Performance for Fiscal 20172020
President and CEO:CEO: Based on our financial results for fiscal year 2017,2020, and the degree of accomplishment of Individual MBOs, the Compensation Committee determined that Mr. Capone hadRiggsbee achieved 87%a Total Performance Factor of 18% for determining his annual cash incentive bonus during his time serving as Chief Financial Officer and Treasurer and a Total Performance Factor of 50% for his time serving as Interim President and Chief Executive Officer. As part of this determination, the Compensation Committee noted the successful navigation of the financial performance targets set for him underglobal coronavirus pandemic, the Company Financial MBOs for fiscal year 2017. The Compensation Committee also determined that Mr. Capone had accomplished his Individual MBOs based on the revenues generated from non-hereditary cancer products, theattainment of additional reimbursement coverage for new products, regulatory approvals for our companion diagnostics and key advancements in our product pipeline. Additionally, the Compensation Committee noted under Mr. Capone’s supervision, the accomplishments of the Company, including under Mr. Riggsbee’s supervision for his time serving as Interim President and Chief Executive Officer, as discussed above under the caption: “Fiscal Year 20172020 Performance.”
Other Named Executive Officers.Officers: The Compensation Committee determined that the other NEOs had substantially accomplished the Company Financial MBOs and their respective Individual MBOs based on the accomplishments of the Company as discussed above under the caption: “Fiscal Year 20172020 Performance.”
Role of Management in Our Compensation Program
Our management, including our President and CEO, supports the Compensation Committee, attends portions of its meetings upon request, and performs various administrative functions at its request. Our President and CEO provides input to the Compensation Committee on the effectiveness of our compensation program and makes specific recommendations as to the base salary amounts, annual cash incentive bonus amounts, long-term cash incentive bonus awards and equity incentive awards for the executive officers, other than for himself. At the end of each fiscal year, our President and CEO evaluates the annual performance of each of our executive officers, including an assessment of the accomplishment of each executive officer’s MBOs, and submits his calculations and recommendations to the Compensation Committee which then determines an annual cash incentive bonus amount for the concluding fiscal year, the base salary amount for the ensuing fiscal year and long term equity incentive compensation for each of the executive officers. Except for our President and CEO, no executive officer is present when the Compensation Committee discusses and determines the salary and bonus amounts and equity compensation to be awarded to the executive officers. Our President and CEO is excused from all meetings, and is not present, where matters pertaining to his compensation are determined and approved by the Compensation Committee.
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Other Compensation
We maintain broad-based benefits that are provided to all employees, including health and dental insurance, life and disability insurance, a 401(k) plan, and a discretionary December holiday bonus. Additionally, we may provide other benefits to new executive officers such as a relocation package or other related compensation as determined on a case-by-case basis. We may also provide certain compensation benefits in connection with the retirement of our executive officers based on their accomplishments and tenure of employment with us.
36
Termination and Change-of-Control-BasedChange-in-Control-Based Compensation
We recognize that, as is the case with many publicly-heldpublicly held corporations, the possibility of a change in control of the Company, or an abrupt termination for business necessity, exists and that such possibility, and the uncertainty and questions which it may raise among key personnel, may result in the departure or distraction of key personnel to the detriment of us and our stockholders. Therefore, we have entered into a retention agreementnew Severance and Change in Control Agreement with each of our executive officers, other than our Chief Executive Officer whose arrangements with respect to reinforceseverance and encourage the continued employment and dedication of our executive officers without distraction from the possibility of a change in control of the Company are addressed in his employment agreement with us. This new Severance and related eventsChange in Control Agreement differs from past retention agreements with these executive officers, and circumstances. brings the new agreement into line with the market, by:
- | Increasing the ownership threshold required for a change in control to 50%; |
- | Replacing single-trigger accelerated vesting in a change in control with double-trigger vesting (i.e., change in control and termination now required for accelerated vesting and cash severance benefits); |
- | Reducing change in control severance payments from 3X salary and bonus to 1X salary and bonus; |
- | Reducing benefits (COBRA) payments from 36 months to 12 months; and |
- | Introducing severance payments (1X salary and bonus) and equity acceleration (two years of vesting) upon a termination without Cause or for Good Reason not in connection with a change in control. |
We believe that the terms of our retention agreementnew Severance and Change in Control Agreement are consistent with those historically maintained by others in our industry and therefore are important for attracting and retaining key employees who are critical to our long-term success. The potential benefits provided under the retention agreementSeverance and Change in Control Agreement are in addition to the current compensation arrangements we have with our executive officers. In September 2015 in response to shareholder concerns, we entered into amendment to these retention agreement with our executive officers in order to eliminate the tax gross-up set forth therein that allowed for payments to be made by the Company to the executive officers to offset any excise taxes incurred by the executive officer in the event that any change of control payments are subject to excise tax under Section 4999 of the Internal Revenue Code.
For the payments each of our NEOs is entitled to receive upon termination, including termination incident to a change-in-controlchange in control, see “Executive Compensation — Potential Payments Upon Termination or Change-in-Control” later in this proxy statement.
Relationship of Elements of Compensation
As noted above, our compensation structure is primarily comprised of a base salary, an annual cash incentive bonus, and long-term incentive compensation in the form of a three-year cash incentive bonus award and equity incentive awards. In setting executive compensation, the Compensation Committee considers the aggregate compensation payable to an executive officer and the form of the compensation. The Compensation Committee seeks to achieve an appropriate balance between immediate cash rewards and long-term financial incentives.
We utilize long termlong-term equity incentive compensation in the form of restricted stock unitsa mix of RSUs and PSUs as a substantial component of compensation (prior to fiscal year 2015 we utilized stock options).compensation. The Compensation Committee views the award of restricted stock unitsRSUs and PSUs as a primary long-term retention benefit by tying the earning of these awards to a vesting schedule that will be over a period greater than four years for full vesting of restricted stock units. If an employee leaves the Company before the completion of the vesting period, then that employee will not be entitled to any benefit from the non-vested portion of the award. Additionally, for our NEOs, the restricted stock unit awardIn addition to time-based vesting, PSUs also has ahave performance metricmetrics that, if not met, would require the NEO to forfeitforfeiture of a portion up toor potentially the entire restricted stock unitPSU award regardless of the additional requirement of vesting. We believe that thisthe time-based vesting feature of RSUs and PSUs makes it more attractive to remain as our employee and this arrangement does not require substantial cash payments by the Company. Similarly, our three-year cash incentive bonus awards promote long-term performance by establishing significant growth performance targets that must be met over a three-year period. This long-term cash incentive bonus also promotes retention of our executives as no payment is made under our three-year cash incentive bonus awards if the executive officer is not employed on the last day of the three-year performance period.
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
The Compensation Committee reviews from time to time the mix of the compensation elements for executive officers against comparable companies in our industry as represented in the compensation data we utilize. The size and mix of each element in a compensation package is based on the impact of the position on the Company, market practice and overall corporate and individual performance relative to stated corporate goals. The level of incentive compensation typically increases in relation to an executive officer’s responsibilities and ability to meet individual and corporate goals. The Compensation Committee believes that making a significant portion of an executive officer’s compensation contingent on corporate performance more closely aligns the executive officer’s interests with those of our stockholders.
Conclusion
Our compensation policies are designed and are continually being developed to retain and motivate our executive officers and to ultimately reward them for outstanding individual and corporate performance.
The following table shows the total compensation paid or accrued during the fiscal years indicated to (1)each person who served as our President and Chief Executive Officer (2)or our Chief Financial Officer during the fiscal year ended June 30, 2020, and (3) our three next most highly compensated executive officers who earned more than $100,000 during the fiscal year ended June 30, 20172020 and were serving as executive officers as of June 30, 2017.
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Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Stock Awards ($) (1) | Non-Equity Incentive Plan Compensation ($) (2) | All Other Compensation ($) (3) | Total ($) | |||||||||||||||||||||
Mark C. Capone | 2017 | 852,000 | 307 | 3,613,500 | 741,240 | 10,848 | 5,217,895 | |||||||||||||||||||||
President and Chief Executive Officer* | 2016 | 800,000 | 512 | 3,361,875 | 727,200 | 11,048 | 4,900,635 | |||||||||||||||||||||
2015 | 600,000 | 614 | 4,193,200 | 390,060 | 10,248 | 5,194,122 | ||||||||||||||||||||||
Alexander Ford | 2017 | 499,200 | 307 | 1,314,000 | 245,606 | 10,848 | 2,069,961 | |||||||||||||||||||||
President, Myriad Genetic Laboratories, Inc. | ||||||||||||||||||||||||||||
R. Bryan Riggsbee (4) | 2017 | 432,000 | 307 | 1,314,000 | 230,688 | 8,174 | 1,985,170 | |||||||||||||||||||||
Chief Financial Officer | 2016 | 400,000 | 512 | 2,037,500 | 180,000 | 10,016 | 2,628,028 | |||||||||||||||||||||
2015 | 265,625 | 10,000 | 1,050,900 | 119,531 | 119,623 | 1,565,679 | ||||||||||||||||||||||
Jerry S. Lanchbury, Ph.D. | 2017 | 493,782 | 307 | 1,095,000 | 214,795 | 10,960 | 1,814,844 | |||||||||||||||||||||
Chief Scientific Officer | 2016 | 479,400 | 512 | 1,986,563 | 215,730 | 11,297 | 2,693,502 | |||||||||||||||||||||
2015 | 470,000 | 614 | 2,477,800 | 207,423 | 10,110 | 3,165,947 | ||||||||||||||||||||||
Richard M. Marsh, Esq. | 2017 | 493,782 | 307 | 1,095,000 | 222,202 | 10,921 | 1,822,212 | |||||||||||||||||||||
Executive VP, General Counsel & Secretary | 2016 | 479,400 | 512 | 1,925,438 | 218,127 | 10,830 | 2,634,306 | |||||||||||||||||||||
2015 | 470,000 | 614 | 2,401,560 | 207,423 | 10,513 | 3,090,110 |
Name and Principal Position | Fiscal Year | Salary ($) | Stock Awards ($) (1) | Non-Equity Incentive Plan Compensation ($) (2) (3) | All Other Compensation ($) (4) | Total ($) | ||||||||||||||||||||||||
R. Bryan Riggsbee Chief | ||||||||||||||||||||||||||||||
Financial Officer and | 2020 | 552,796 | 3,461,500 | 180,209 | 8,836 | 4,203,341 | ||||||||||||||||||||||||
Treasurer; Interim President | 2019 | 466,650 | 2,392,500 | 260,671 | 19,162 | 3,138,983 | ||||||||||||||||||||||||
and Chief Executive Officer | 2018 | 432,000 | 1,954,200 | 254,016 | 5,366 | 2,645,582 | ||||||||||||||||||||||||
Mark C. Capone | 2020 | 870,560 | 4,489,500 | 184,211 | 630,187 | (5) | 6,174,458 | |||||||||||||||||||||||
Former President and Chief | 2019 | 887,000 | 7,177,500 | 802,735 | 29,449 | 8,896,684 | ||||||||||||||||||||||||
Executive Officer and Director | 2018 | 852,000 | 5,374,050 | 817,920 | 10,980 | 7,054,950 | ||||||||||||||||||||||||
Alexander Ford | 2020 | 513,271 | 1,496,500 | 150,643 | 22,629 | 2,183,043 | ||||||||||||||||||||||||
Former Chief Operating | 2019 | 519,168 | 2,392,500 | 293,226 | 26,808 | 3,231,702 | ||||||||||||||||||||||||
Officer | 2018 | 499,200 | 1,954,200 | 296,525 | 11,020 | 2,760,945 | ||||||||||||||||||||||||
Jerry S. Lanchbury, Ph.D. | 2020 | 493,496 | 1,197,200 | 131,599 | 6,943 | 1,829,238 | ||||||||||||||||||||||||
Chief Scientific Officer | 2019 | 508,595 | 1,914,000 | 250,228 | 12,927 | 2,685,750 | ||||||||||||||||||||||||
2018 | 493,782 | 1,628,500 | 244,422 | 10,972 | 2,377,676 | |||||||||||||||||||||||||
Nicole Lambert | 2020 | 386,859 | 1,197,200 | 99,934 | 20,713 | 1,704,706 | ||||||||||||||||||||||||
Group President of Myriad | ||||||||||||||||||||||||||||||
Women’s Health, Oncology, | 2019 | 369,169 | 416,626 | 194,198 | 13,795 | 993,788 | ||||||||||||||||||||||||
and International | 2018 | 319,072 | 278,474 | 94,860 | 10,863 | 703,269 | ||||||||||||||||||||||||
Bernard F. Tobin | 2020 | 431,295 | 1,047,550 | 95,163 | 305,037 | (6) | 1,879,045 | |||||||||||||||||||||||
Former President of Myriad | 2019 | 441,334 | 1,674,750 | 199,262 | 26,162 | 2,341,508 | ||||||||||||||||||||||||
Autoimmune | 2018 | 424,360 | 1,302,800 | 201,571 | 10,950 | 1,939,681 | ||||||||||||||||||||||||
Gary A. King | ||||||||||||||||||||||||||||||
Former Executive Vice | 2020 | 405,725 | 808,110 | 108,193 | 639,131 | (7) | 1,961,159 | |||||||||||||||||||||||
President International | 2019 | 383,294 | 1,291,950 | 200,079 | 229,832 | (7) | 2,105,155 | |||||||||||||||||||||||
Operations
|
| 2018
|
|
| 389,045
|
|
| 977,100
|
|
| 174,563
|
|
| 317,475
| (7)
|
| 1,858,183
|
| ||||||||||||
(1) Amounts shown reflect the aggregate grant date fair value of restricted stock unit awards granted in each year presented calculated in accordance with FASB ASC Topic 718. Amounts reflect the maximum potential value of each award assuming the highest level of performance associated with the award and are based on the closing price of our common stock on the Nasdaq Global Select Market on the date of grant of the award. For fiscal year 2020, based on the level of achievement of the applicable performance criteria established on the grant date for these restricted stock unit awards, they were awarded at 82 percent of the prior grant level.
(2) For Mr. Capone, for fiscal year 2018, the amounts reported in this column reflect the actual cash awards paid under our 2013 Executive Incentive Plan to Mr. Capone pursuant to his annual cash incentive bonus award, calculated based on measurement |
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
38
(3) | For fiscal year 2020 the non-equity incentive plan compensation to Mr. Riggsbee, Mr. Ford, Dr. Lanchbury, and Ms. Lambert was paid out as a restricted stock grant with two-year vesting in order to preserve cash given the impact of the global coronavirus pandemic on the business. Payments to Mr. Capone, Mr. Tobin, and Mr. King were in cash. |
(4) | All amounts shown for fiscal year |
Amounts include $600,231 in severance that Mr. Capone received as |
2017
(6) | Amounts include $281,096 in severance that Mr. Tobin received as part of this severance agreement. |
(7) | In addition to the amounts included discussed in Note 4, amounts also include tax payments made by the Company on Mr. King’s behalf of $306,037, $213,271 and $629,715 in fiscal years 2018, 2019 and 2020, respectively. |
2020 Fiscal Year Grants of Plan-Based Awards
The following tables show information regarding grants of non-equity and equity awards that we made during the fiscal year ended June 30, 20172020 to each of the executive officers named in the Summary Compensation Table.
Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($) (1) | Estimated Future Payouts Under Equity Incentive Plan Awards (#)(2) | Grant Date Fair Value of Stock and Option Awards ($)(3) | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($) (1) | Estimated Future Payouts Under Equity Incentive Plan Awards (#)(2) | Grant Date Fair Value of Stock and Option | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Threshold | Target | Maximum | Threshold | Target | Grant Date | Threshold | Target | Maximum | Threshold | Target | Awards ($)(3) | ||||||||||||||||||||||||||||||||||||||||||||||||
Mark C. Capone | 9/14/2016 | 115,500 | 165,000 | 3,613,500 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FY19 3-YR Award | 127,800 | 170,400 | 255,600 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexander Ford | 9/14/2016 | 42,000 | 60,000 | 1,314,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FY19 3-YR Award | 56,160 | 74,880 | 112,320 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
R. Bryan Riggsbee | 9/14/2016 | 42,000 | 60,000 | 1,314,000 | | 9/25/2019 FY21 3-YR Award | 54,338 | 72,450 | 108,675 | 35,000 | 50,000 | 1,496,500 | |||||||||||||||||||||||||||||||||||||||||||||||||
FY19 3-YR Award | 48,600 | 64,800 | 97,200 | | 2/08/2020 | (4) | 100,000 | 1,965,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Mark C. Capone (5) | | 9/25/2019 FY21 3-YR Award | 137,760 | 183,681 | 275,521 | 105,000 | 150,000 | 4,489,500 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Alexander Ford (6) | | 9/25/2019 FY21 3-YR Award | 63,450 | 84,600 | 126,900 | 35,000 | 50,000 | 1,496,500 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Jerry S. Lanchbury | 9/14/2016 | 35,000 | 50,000 | 1,095,000 | | 9/25/2019 FY21 3-YR Award | 59,175 | 78,900 | 118,350 | 28,000 | 40,000 | 1,197,200 | |||||||||||||||||||||||||||||||||||||||||||||||||
FY19 3-YR Award | 55,551 | 74,067 | 111,111 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Richard M. Marsh | 9/14/2016 | 35,000 | 50,000 | 1,095,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FY19 3-YR Award | 55,551 | 74,067 | 111,111 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nicole Lambert | | 9/25/2019 FY21 3-YR Award | 47,840 | 63,787 | 95,680 | 28,000 | 40,000 | 1,197,200 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Bernard J. Tobin (7) | | 9/25/2019 FY21 3-YR Award | 51,413 | 68,550 | 102,825 | 24,500 | 35,000 | 1,047,550 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Gary A. King (8) |
| 9/25/2019 FY21 3-YR Award
|
| 48,687 | 64,916 | 97,374 | 18,900 | 27,000 | 808,110 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(1) The amounts represent the threshold, target, and maximum amounts awarded to our NEOs under our Three-Year Cash Incentive Bonus Plan for fiscal years 2020-2022. The metrics against which performance is to be measured are discussed in the Compensation Discussion and Analysis under the heading “Fiscal Year 2020 Named Executive Officer Compensation- Long Term Incentive Awards Three Year Cash Incentive Bonus Plan.”
(2) The amounts represent the threshold and target (which is also the maximum) number of our shares that may be awarded with respect to the restricted stock unit awards made to our NEOs on September 25, 2019. Based on our level of achievement of the revenue performance criteria established on the grant date for these awards, the number of shares underlying these restricted stock units were awarded at the 82 percent threshold. These shares vest one-fourth per year beginning September 26, 2020.
(3) The amounts represent the grant date fair value calculated in accordance with FASB ASC Topic 718 and are based on the closing price of our common stock on the Nasdaq Global Select Market on September 25, 2019 of $29.93.
(4) Pursuant to Mr. Riggsbee assuming the interim Chief Executive Officer position in February 2020, the Compensation Committee granted him 100,000 restricted stock units. The grant date value of such grant has been calculated in accordance with FASB ASC Topic 718 and is based on the closing price of our common stock on the Nasdaq Global Select Market on February 18, 2020 of $19.65.
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(1) The amounts represent the threshold, target, and maximum amounts awarded to our NEOs under our Three-Year Cash Incentive Bonus Plan for fiscal years 2020-2022. The metrics against which performance is to be measured are discussed in the Compensation Discussion and Analysis under the heading “Fiscal Year 2020 Named Executive Officer Compensation- Long Term Incentive Awards Three Year Cash Incentive Bonus Plan.”
(2) The amounts represent the threshold and target (which is also the maximum) number of our shares that may be awarded with respect to the restricted stock unit awards made to our NEOs on September 25, 2019. Based on our level of achievement of the revenue performance criteria established on the grant date for these awards, the number of shares underlying these restricted stock units were awarded at the 82 percent threshold. These shares vest one-fourth per year beginning September 26, 2020.
(3) The amounts represent the grant date fair value calculated in accordance with FASB ASC Topic 718 and are based on the closing price of our common stock on the Nasdaq Global Select Market on September 25, 2019 of $29.93.
(4) Pursuant to Mr. Riggsbee assuming the interim Chief Executive Officer position in February 2020, the Compensation Committee granted him 100,000 restricted stock units. The grant date value of such grant has been calculated in accordance with FASB ASC Topic 718 and is based on the closing price of our common stock on the Nasdaq Global Select Market on February 18, 2020 of $19.65.
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
(5) | Mark C. Capone resigned from the Company effective February 6, 2020. As such, (a) he will not receive any payment under the |
Alec Ford resigned from the |
Bernard J. Tobin left the |
(8) | Gary A. King retired from the Company on October 1, 2020, is no longer serving as an executive officer, and entered a consulting arrangement with the Company through December 31, 2020. As such, (a) he will not receive any payment under the FY21 3-YR Award (or any subsequent 3-YR Awards) and (b) no further shares granted to him under any equity incentive plan awards are anticipated to vest after his separation date. |
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Narrative Disclosure to Summary Compensation Table and 20172020 Fiscal Year Grants of Plan-Based Awards Table
We have entered into standard form employment agreements with no defined term with each of our NEOs. Pursuant to these agreements, either party may terminate employment without cause at any time upon 15 daysa specified period of written notice to the other party or immediately with cause upon written notice to the other party. Each employment agreement also provides that the employee will not disclose confidential information of ours during and after employment and will not compete with us during the term of employment.includes standard non-competition and non-solicitation provisions. Since the dates of these agreements entered into with our NEOs, the compensation paid to each NEO has been increased and equity awards have been granted, the most recent of which are as discussed below.
Previously, we have entered into an Executive Retention Agreement with each of our NEOs under which they arewere entitled to certain benefits upon a change-in-control,change-in-control. More recently, we replaced these Executive Retention Agreements with a Severance and Change in Control Agreement with each NEO that provides similar benefits, but significantly lower compensation, upon a change in control as well as benefits and compensation upon termination not incident to a change in control. These agreements are discussed below under “Executive Compensation — Potential Payments Upon Termination or Change-in-Control.”
Mr. Riggsbee was appointed to the position of Chief Financial Officer and Treasurer in October, 2014, and entered into the Company’s standard form of employment agreement at that time. During fiscal year 2020, he was appointed interim CEO on February 6, 2020 following the resignation of Mr. Capone and served in this position through August 13, 2020. As determined by our Compensation Committee, he received an annual salary of $552,796 for the fiscal year ended June 30, 2020 which reflected the combination of his salary as Interim President and Chief Executive Officer and Chief Financial Officer and Treasurer during the fiscal year. Mr. Riggsbee will be paid an annual base salary of $477,000 for the fiscal year ending June 30, 2021. His annual MBO incentive bonus for fiscal 2020 was $180,209 as determined by our Compensation Committee and paid out in restricted stock units that vest over a two-year period. Additionally, in September 2019, the Compensation Committee approved a three-year cash incentive award under our 2013 Executive Incentive Plan pursuant to which Mr. Riggsbee will be entitled to receive up to $108,675 as of the end of fiscal 2022 if we achieve the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 2020 Named Executive Officer Compensation — Long-Term Incentive Awards —Three-Year Cash Incentive Bonus.” On September 25, 2019, he was granted a restricted stock unit award of 50,000 shares of the Company, subject to time-based and performance-based vesting requirements. Based on the level of accomplishment of the performance-based metric for fiscal 2019, the restricted stock unit award was reduced to 82 percent of the original grant or 41,000 shares. On October 8, 2020, Mr. Riggsbee was granted a restricted stock unit award of 60,000 shares of the Company, subject to time-based and performance-based vesting requirements.
Mr. Capone is our former President and CEO. He was appointed to the position of President and CEO of the Company beginning July 1, 2015.2015 and resigned as CEO effective February 6, 2020. He had previously entered into the Company’s standard form of employment agreement when he was initially hired by the Company in October 2002 as the Vice President of Sales for MGL. Thereafter, in September 2005, he was appointed to the position of Senior Vice President of Sales for MGL. In February 2006, he was appointed to the position of Chief Operating Officer for MGL, and then in March 2010 he was appointed President of MGL. As determined by our Compensation Committee, he received an annual salary of $852,000$870,560 for the fiscal year ended June 30, 2017. Mr. Capone will be paid an annual base salary of $852,000 as our President2020
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EXECUTIVE COMPENSATION
Compensation Discussion and CEO Analysis
for the time he served as CEO. His actual salary for fiscal year ending June 30, 2018.2020 was $918,045. His annual cashMBO incentive bonus for fiscal 20172020 was $741,240$184,211, pursuant to his separation agreement, as approved by our Compensation Committee based on the level of achievement of pre-established performance goals. Additionally, in September 2016,2019, the Compensation Committee approved a three-year cash incentive award under our 2013 Executive Incentive Plan pursuant to which Mr. Capone will bewould have been entitled to receive up to $255,600$275,521 as of the end of fiscal 20192022 if we achieve the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 20172020 Named Executive Officer Compensation — Long-Term Incentive Awards — Three-Year Cash Incentive Bonus.” However, given he is no longer an employee of the Company, he is no longer eligible for this award. On September 14, 2016,25, 2019, Mr. Capone was granted a restricted stock unit award of 165,000150,000 shares of the Company, subject to time-based and performance-based vesting requirements. These shares will be forfeited given the vesting periods occur following his resignation as CEO. Based on the level of accomplishment of the performance-based metric for fiscal 2017,2020, the restricted stock unit award was not reduced. On September 13, 2017, he was granted a restricted stock unit award of 165,000 sharesreduced to 82 percent of the Company, subject to time-based and performance-based vesting requirements.original grant or 123,000 shares. 25% of these shares (30,750) vested on September 26, 2020, but no further shares under this award will vest since Mr. Capone is no longer employed by the Company.
Mr. Ford was appointed President of Myriad Genetic Laboratories, Inc. beginning July 1, 2015.is our former Chief Operating Officer. He had previously entered into the Company’s standard form of employment agreement when he was initialedinitially hired by the Company in June 2010 as the Vice President of Sales for MGL. Thereafter, in July 2011, he was appointed to the position of GM Preventative Care, and thereafter as MGL’s Chief Commercial Officer in January 2013. Thereafter he was appointed as President of MGL until 2018. Effective October 2, 2020, Mr. Ford resigned his employment at the Company. As determined by our Compensation Committee, Mr. Ford received an annual salary of $499,200$513,271 for the fiscal year ended June 30, 2017, and will be paid an annual base salary of $499,200 for the fiscal year ending June 30, 2018.2020. His annual cashMBO incentive bonus for fiscal 20172020 was $245,606$150,643 as determined by our Compensation Committee.Committee and paid out in restricted stock units that, but for his resignation, would have vested over a two-year period. Additionally, in September 2016,2019, the Compensation Committee approved a three-year cash incentive award under our 2013 Executive Incentive Plan pursuant to which Mr. Ford, will bebut for his resignation, would have been entitled to receive up to $112,320$126,900 as of the end of fiscal 20192022 if we achieveachieved the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 20172020 Named Executive Officer Compensation — Long-Term Incentive Awards — Three-Year Cash Incentive Bonus.” On September 14, 2016,25, 2019, he was granted a restricted stock unit award of 60,00050,000 shares of the Company, subject to time-based and performance-based vesting requirements. Based on the level of accomplishment of the performance-based metric for fiscal 2017,2020, the restricted stock unit award was reduced to 82 percent of the original grant or 41,000 shares. 25% of those shares vested on September 26, 2020, but the balance will not reduced. On September 13, 2017,vest due to Mr. Ford’s resignation. Mr. Ford was granteddid not receive a restricted stock unit award of 60,000 shares of the Company, subject to time-based and performance-based vesting requirements.
Mr. Riggsbee was appointed to the position of Chief Financial Officer and Treasurer in October, 2014, and entered into the Company’s standard form of employment agreement at that time. As determined by our Compensation Committee, he received an annual salary of $432,000 for the fiscal year ended June 30, 2017. Mr. Riggsbee will be paid2020 transition period given he is no longer an annual base salary of $432,000 for the fiscal year ending June 30, 2018. His annual cash incentive bonus for fiscal 2017 was $230,688 as determined by our Compensation Committee. Additionally, in September 2016, the Compensation Committee approved a three-year cash incentive award under our 2013 Executive Incentive Plan pursuant to which Mr. Riggsbee will be entitled to receive up to $97,200 as of the end of fiscal 2019 if we achieve the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 2017
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Named Executive Officer Compensation — Long-Term Incentive Awards — Three-Year Cash Incentive Bonus.” On September 14, 2016, he was granted a restricted stock unit award of 60,000 shares of the Company, subject to time-based and performance-based vesting requirements. Based on the level of accomplishment of the performance-based metric for fiscal 2017, the restricted stock unit award was not reduced. On September 13, 2017, Mr. Riggsbee was granted a restricted stock unit award of 60,000 shares of the Company, subject to time-based and performance-based vesting requirements.employee.
Dr. Lanchbury was appointed to the position of Senior Vice President, Research in November 2002 and entered into the Company’s standard form of employment agreement at that time. In September 2005, he was promoted to Executive Vice President, Research. In February 2010, Dr. Lanchbury was appointed Chief Scientific Officer. As determined by our Compensation Committee, he received an annual salary of $493,782$493,496 for the fiscal year ended June 30, 2017.2020. Dr. Lanchbury will be paid an annual base salary of $493,782$519,000 for the fiscal year ending June 30, 20182021.His annual cashMBO incentive bonus for fiscal 20172020 was $214,795$131,599 as determined by our Compensation Committee.Committee and paid out in restricted stock units that vest over a two-year period. Additionally, in September 2016,2019, the Compensation Committee approved a three-year cash incentive award under our 2013 Executive Incentive Plan pursuant to which Dr. Lanchbury will be entitled to receive up to $111,111$118,350 as of the end of fiscal 20192022 if we achieve the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 20172020 Named Executive Officer Compensation — Long-Term Incentive Awards — Three-Year Cash Incentive Bonus.” On September 14, 2016,25, 2019, he was granted a restricted stock unit award of 50,00040,000 shares of the Company, subject to time-based and performance-based vesting requirements. Based on the level of accomplishment of the performance-based metric for fiscal 2017,2020, the restricted stock unit award was not reduced. On September 13, 2017,reduced to 82 percent of the original grant or 32,800 shares. October 8, 2020, Dr. Lanchbury was granted a restricted stock unit award of 50,00048,000 shares of the Company, subject to time-based and performance-based vesting requirements.
Mr. MarshMs. Lambert was appointed to the position of ViceGroup President General CounselMyriad Women’s Health, Oncology, and Secretary in November 2002International during fiscal year 2020 and entered into the Company’s standard form of employment agreement
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
at that time. In September 2005, he was promotedPrior to Executive Vicethis position she served as the President General Counsel and Secretary.for Myriad Oncology. As determined by our Compensation Committee, Mr. Marshshe received an annual salary of $493,782$386,859 for the fiscal year ended June 30, 2017, and2020. Ms. Lambert will be paid an annual base salary of $493,782$420,000 for the fiscal year ending June 30, 2018. His2021. Her annual cashMBO incentive bonus for fiscal 20172020 was $222,202$99,934 as determined by our Compensation Committee.Committee and paid out in restricted stock units that vest over a two-year period. Additionally, in September 2016,2019, the Compensation Committee approved a three-year cash incentive award under our 2013 Executive Incentive Plan pursuant to which Mr. MarshMs. Lambert will be entitled to receive up to $111,111$95,680 as of the end of fiscal 20192022 if we achieve the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 20172020 Named Executive Officer Compensation — Long-Term Incentive Awards — Three-Year—Three-Year Cash Incentive Bonus.” On September 14, 2016, he25, 2019, she was granted a restricted stock unit award of 50,00040,000 shares of the Company, subject to time-based and performance-based vesting requirements. Based on the level of accomplishment of the performance-based metric for fiscal 2017,2020, the restricted stock unit award was not reduced.reduced to 82 percent of the original grant or 32,800 shares. On September 13, 2017, Mr. MarshOctober 8, 2020, Ms. Lambert was granted a restricted stock unit award of 50,00048,000 shares of the Company, subject to time-based and performance-based vesting requirements.
AllMr. Tobin is the former President of Myriad Autoimmune. He was appointed to the position of President of Myriad Autoimmune in December 2014 and entered into the Company’s standard form of employment agreement at that time. As determined by our Compensation Committee, he received an annual salary of $431,295 for the fiscal year ended June 30, 2020 for the time he served in his role and his actual fiscal year 2020 salary was $456,000. Mr. Tobin will not receive a salary for the 2020 transition period as his position was eliminated as part of a leadership restructuring. His annual cash MBO incentive bonus for fiscal 2020 was $95,163 as determined by our Compensation Committee. Additionally, in September 2019, the Compensation Committee approved a three-year cash incentive award under our 2013 Executive Incentive Plan pursuant to which Mr. Tobin would have been entitled to receive up to $102,825 as of the end of fiscal 2022 if we achieve the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 2020 Named Executive Officer Compensation — Long-Term Incentive Awards — Three-Year Cash Incentive Bonus.” However, given he is no longer an employee of the Company, he is no longer eligible to receive this award. On September 25, 2019, he was granted a restricted stock unit award of 35,000 shares of the Company, subject to time-based and performance-based vesting requirements. Because Mr. Tobin was no longer employed by the Company at the time of the first scheduled vesting, he received and will receive no shares under this award. Mr. Tobin did not receive a restricted stock unit award for the 2020 transition period given he is no longer an employee.
Mr. King is our former Executive Vice President of International. He was appointed to the position of Executive Vice President of International in July 2010 and entered into the Company’s standard form of employment agreement at that time. Mr. King retired from the Company on October 1, 2020, at which point he entered a consulting agreement under which he will continue to provide consulting and transitional services to the Company until December 31, 2020 (which period may be extended by mutual agreement of the parties). As determined by our Compensation Committee, he received an annual salary of $405,725 for the fiscal year ended June 30, 2020. Mr. King was paid an annual base salary of $428,000 for the portion of the 2020 transition period during which he was an employee and will be paid a fee of $10,000 per month during his consulting arrangement. His annual MBO incentive bonus for fiscal 2020 was $108,193 as determined by our Compensation Committee and paid out in restricted stock units that vest over a two-year period. Such shares will only vest in the event Mr. King’s consulting agreement is extended through August 2021. Additionally, in September 2019, the Compensation Committee approved a three-year cash incentive award under our 2013 Executive Incentive Plan pursuant to which Mr. King would have been entitled to receive up to $97,374 as of the end of fiscal 2022 if we achieve the performance goals discussed above in the Compensation Discussion and Analysis under the heading “Fiscal Year 2020 Named Executive Officer Compensation — Long-Term Incentive Awards — Three-Year Cash Incentive Bonus.” However, Mr. King retired from the Company on October 1, 2020 and consequently is no longer eligible to receive this award. On September 25, 2019, he was granted a restricted stock unit award of 27,000 shares of the Company, subject to time-based and performance-based vesting requirements. Based on the level of accomplishment of the performance-based metric for fiscal 2020, the restricted stock unit award was reduced to 82 percent of the original grant or 22,140 shares. Mr. King did not receive a restricted stock unit award for the 2020 transition period given his retirement from the Company.
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Mr. Diaz was appointed to the position of President and Chief Executive Officer on August 13, 2020, and entered into an employment agreement with the Company at that time. Pursuant to the employment agreement, Mr. Diaz receives an annual salary of $1,000,000. Mr. Diaz’s agreement also provides for a $1,000,000 signing bonus, of which one-half was paid following the commencement of his employment and the remaining one-half will be paid following the one-year anniversary of his employment with the Company. Mr. Diaz is eligible to receive an annual MBO incentive bonus in a target amount equal to 100% of his base salary, and he is also eligible to receive three-year cash incentive awards under our 2013 Executive Incentive Plan. On August 13, 2020, the Board of Directors further authorized the grant to Mr. Diaz, of a restricted stock unit award for 298,954 shares of Myriad’s common stock (the “RSUs”); a performance stock unit award for 298,954 shares (the “PSUs”); a time-based non-qualified stock option for the purchase of 342,040 shares (the “Time-Based Option”); and a performance-based non-qualified stock option for the purchase of 339,088 shares (the ‘‘Performance-Based Option,’’ and all together the “Inducement Awards”). Of the RSUs, 50% will vest on the first anniversary of Mr. Diaz’s commencement date, and the remaining 50% will vest in three equal tranches on each of the second, third and fourth anniversaries of his commencement date. The PSUs are subject to being earned based on achievement of pre-established milestones for the fiscal year ending June 30, 2021 set by the Compensation Committee. To the extent the PSUs are determined to have been earned based on milestone achievement, 25% will vest when they are deemed earned, and the remaining 75% will vest in three equal installments on the following three anniversaries of Mr. Diaz’s commencement date. The Time-Based Options vest in four equal installments on each of the first four anniversaries of Mr. Diaz’s commencement date. The Performance-Based Options vest in five equal installments based on achievement (as measured in the option agreement) of pre-determined stock price increases of Myriad common stock, provided that no portion of the Performance-Based Options may vest earlier than the first anniversary of Mr. Diaz’s commencement date.
Under the terms of Mr. Diaz’s employment agreement, if his employment is terminated without “Cause” or if he is separated from the Company for “Good Reason” (each is defined in the agreement and set forth below), then he will receive: (i) an amount equal to two times his then-current annual base salary and two times his then-current target annual bonus; (ii) a prorated portion of his target annual bonus for the then-current fiscal year; (iii) immediate vesting of RSUs scheduled to vest within four years after termination; (iv) vesting of PSUs for two years following termination to the extent the relevant performance metrics for the PSU grant are achieved; and (v) reimbursement for continued medical benefits until the earlier of 18 months after the date of termination or the date he begins employment with another employer.
If Mr. Diaz’s employment is terminated without “Cause” or if he separates from the Company for “Good Reason”, within three months before or 24 months after a “Change in Control” (as defined in the agreement and set forth below), then he will receive the same benefits described in the preceding paragraph, except that all outstanding and unvested equity grants will immediately vest in full.
As defined in Mr. Diaz’s employment agreement:
● | “Cause” means: (i) Executive’s gross negligence in the performance of Executive’s duties to the Company; (ii) Executive’s willful misconduct, embezzlement, misappropriation, fraud, or professional dishonesty; (iii) Executive’s material breach of any non-disclosure, invention assignment, non-competition, or similar agreement between Executive and the Company; (iv) Executive’s commission of a felony or of a crime involving moral turpitude; (v) Executive’s willful and material failure to comply with lawful directives of the Board; or (vi) Executive’s willful and material breach of a material provision of any employment agreement between Executive and the Company or willful and material violation of a material provision of any written Company employment policy applicable to its senior executive officers; provided that (A) the Company provides Executive with written notice that the Company intends to terminate Executive’s employment hereunder for one of the circumstances set forth in this Section 2(d) within sixty (60) days of the Board’s knowledge of such circumstance(s) occurring (which notice shall set forth in reasonable detail the circumstance(s) that the Company alleges constitute(s) Cause), (B) in the event that a circumstance described in (iii), (v) or (vi) is capable of being cured, Executive has failed to cure such circumstance within a period of thirty (30) days after the date of receipt of such written notice, and (C) the Company terminates Executive’s |
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
employment within sixty five (65) days from the date of the notice referred to in clause (A). Conduct shall not be considered “willful” unless done (or omitted to be done) not in good faith and without a reasonable belief that such conduct (or lack thereof) was in the best interest of the Company. |
● | “Good Reason” means: (i) a material diminution in Executive’s duties, authority or responsibilities; (ii) a material diminution in Executive’s Base Salary, other than a reduction of similar magnitude to the base salaries of other Company senior executives if there is a reduction of Company senior executive base salaries generally, or a failure by the Company to provide the compensation and benefits provided for in this Agreement; (iii) any change in Executive’s position such that he is no longer the Company’s CEO reporting solely to the Board; or (iv) a material breach by the Company of this Agreement or any other agreement between the Company and Executive; provided that (A) Executive provides the Company with written notice that Executive intends to terminate Executive’s employment hereunder for one of the circumstances set forth in this Section 2(e) within sixty (60) days of such circumstance occurring (which notice shall set forth in reasonable detail the circumstance(s) that Executive alleges constitute(s) Good Reason), (B) if such circumstance is capable of being cured, the Company has failed to cure such circumstance within a period of thirty (30) days after the date of receipt of such written notice, and (C) Executive terminates Executive’s employment within sixty five (65) days from the date of the notice referred to in clause (A). For purposes of clarification, the above-listed conditions shall apply separately to each occurrence of Good Reason, and failure to adhere to such conditions in the event of a specific occurrence of Good Reason shall not disqualify Executive from asserting Good Reason for any subsequent occurrence of Good Reason. |
● | “Change in Control” means the occurrence of any of the following events: (A) Ownership: any “Person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the “Beneficial Owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities (excluding for this purpose any such voting securities held by the Company, any subsidiary of the Company, or any employee benefit plan of the Company); or (B) Merger/Sale of Assets: (1) a merger or consolidation of the Company whether or not approved by the Board, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or the parent of such entity) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or parent of such entity, as the case may be, outstanding immediately after such merger or consolidation; or (2) the sale or disposition by the Company of all or substantially all of the Company’s assets; or (C) Board Change: a change in the Board or its members such that individuals who, as of the Commencement Date (including Executive) or, if later, the date that is one year prior to such change (the later of such two dates referred to herein as the ”Measurement Date”), constitute the Board (the “Incumbent Board”) cease to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Measurement Date whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (including for these purposes, any new members whose election or nomination was so approved, without counting the member and his or her predecessor twice) shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board. |
All annual PSU awards granted to our NEOs before the 2020 transition period are subject to a predetermined, formula-based financial performance metric that must be met in order for these awards to vest annually over a four-plus year period. In addition to the annual cash incentive bonus paid to each of our NEOs, all employees, including the named executive officers, received a holiday bonus of $307 in fiscal year 2017.
In September 2017,2020, the Compensation Committee approved adiscontinued the three-year cash incentive award program. Though payments may still be made under our 2013 Executive Incentive Plan pursuant to which our executive officersplans instituted before the 2020 transition period, no new plans were or will be instituted.
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EXECUTIVE COMPENSATION
Compensation Discussion and other key management members may be entitled to receive compensation at the end of fiscal year 2020 if certain predetermined performance goals are achieved. Following are the amounts that may be earned for our NEOs for the awards under our three-year cash incentive awards:
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Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($) | ||||||||||||||||
Name | Award Period | Threshold | Target | Maximum | ||||||||||||
Mark C. Capone | FY18-20 | 127,800 | 170,400 | 255,600 | ||||||||||||
Alexander Ford | FY18-20 | 56,160 | 74,880 | 112,320 | ||||||||||||
R. Bryan Riggsbee | FY18-20 | 48,600 | 64,800 | 97,200 | ||||||||||||
Jerry S. Lanchbury, Ph.D. | FY18-20 | 55,551 | 74,067 | 111,111 | ||||||||||||
Richard M. Marsh, Esq. | FY18-20 | 55,551 | 74,067 | 111,111 |
Outstanding Equity Awards at 20172020 Fiscal Year End
The following table shows the grants of stock options and restricted stock unitsPSUs outstanding on the last day of the fiscal year ended June 30, 2017,2020, to each of our NEOs. We have not granted any stock options that are subject to performance conditions. The annual restricted stock units granted to our NEOs are subject to time
Option Awards (1) | Stock Awards | |||||||||||||||||||||||||||||||||
Name | Date of Grant | Number of Securities Underlying Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have not Vested (#)(2) | Market Value of Shares or Units of Stock that Have not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have not Vested (#)(4) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have not Vested ($)(3) | |||||||||||||||||||||||||
R. Bryan Riggsbee | 09/14/2016 | 15,000 | 170,100 | |||||||||||||||||||||||||||||||
09/13/2017 | 30,000 | 340,200 | ||||||||||||||||||||||||||||||||
09/19/2018 | 37,500 | 425,250 | ||||||||||||||||||||||||||||||||
09/25/2019 | 50,000 | 567,000 | ||||||||||||||||||||||||||||||||
02/18/2020 | 100,000 | 1,134,000 | ||||||||||||||||||||||||||||||||
Mark C. Capone | 09/15/2010 | 25,001 | 0 | $16.53 | 09/15/2020 | |||||||||||||||||||||||||||||
02/23/2011 | 31,250 | 0 | $18.00 | 02/23/2021 | ||||||||||||||||||||||||||||||
09/13/2011 | 144,000 | 0 | $19.47 | 09/13/2022 | ||||||||||||||||||||||||||||||
03/07/2012 | 52,000 | 0 | $23.98 | 03/07/2022 | ||||||||||||||||||||||||||||||
09/12/2012 | 300,000 | 0 | $27.07 | 09/12/2022 | ||||||||||||||||||||||||||||||
09/17/2013 | 330,000 | 0 | $26.49 | 09/17/2021 | ||||||||||||||||||||||||||||||
09/14/2016 | 41,250 | 467,775 | ||||||||||||||||||||||||||||||||
09/13/2017 | 41,250 | 467,775 | ||||||||||||||||||||||||||||||||
09/19/2018 | 37,500 | 425,250 | ||||||||||||||||||||||||||||||||
09/25/2019 | 37,500 | 425,250 | ||||||||||||||||||||||||||||||||
Alexander Ford | 09/13/2011 | 10,551 | 0 | $19.47 | 09/13/2021 | |||||||||||||||||||||||||||||
03/07/2012 | 4,000 | 0 | $23.98 | 03/07/2022 | ||||||||||||||||||||||||||||||
09/12/2012 | 35,000 | 0 | $27.07 | 09/12/2022 | ||||||||||||||||||||||||||||||
09/17/2013 | 55,000 | 0 | $26.49 | 09/17/2021 | ||||||||||||||||||||||||||||||
09/14/2016 | 15,000 | 170,100 | ||||||||||||||||||||||||||||||||
09/13/2017 | 30,000 | 340,200 | ||||||||||||||||||||||||||||||||
09/19/2018 | 37,500 | 425,250 | ||||||||||||||||||||||||||||||||
09/25/2019 | 50,000 | 567,000 | ||||||||||||||||||||||||||||||||
Jerry S. Lanchbury, Ph.D. | 02/23/2011 | 80,000 | 0 | $18.00 | 02/23/2021 | |||||||||||||||||||||||||||||
09/13/2011 | 128,000 | 0 | $19.47 | 09/13/2021 | ||||||||||||||||||||||||||||||
03/07/2012 | 32,000 | 0 | $23.98 | 03/07/2022 | ||||||||||||||||||||||||||||||
09/12/2012 | 160,000 | 0 | $27.07 | 09/12/2022 | ||||||||||||||||||||||||||||||
09/17/2013 | 180,000 | 0 | $26.49 | 09/17/2021 | ||||||||||||||||||||||||||||||
09/14/2016 | 12,500 | 141,750 | ||||||||||||||||||||||||||||||||
09/13/2017 | 25,000 | 283,500 | ||||||||||||||||||||||||||||||||
09/19/2018 | 30,000 | 340,200 | ||||||||||||||||||||||||||||||||
09/25/2019 | 40,000 | 453,600 | ||||||||||||||||||||||||||||||||
Nicole Lambert | 09/14/2016 | 2,011 | 22,805 | |||||||||||||||||||||||||||||||
09/13/2017 | 4,274 | 48,467 | ||||||||||||||||||||||||||||||||
09/19/2018 | 121 | 1,372 | ||||||||||||||||||||||||||||||||
09/19/2018 | 6,412 | 72,712 | ||||||||||||||||||||||||||||||||
09/25/2019 | 40,000 | 453,600 | ||||||||||||||||||||||||||||||||
Gary A. King | 08/03/2010 | 6,480 | 0 | $14.88 | 08/03/2020 | |||||||||||||||||||||||||||||
02/23/2011 | 5,555 | 0 | $18.00 | 02/23/2021 | ||||||||||||||||||||||||||||||
09/13/2011 | 7,432 | 0 | $19.47 | 09/13/2021 |
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EXECUTIVE COMPENSATION
Compensation Discussion and performance conditions.
42
Option Awards (1) | Stock Awards | |||||||||||||||||||||||||||||||||
Name | Date of | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#)(2) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have not Vested (#)(2) | Market Value of Shares or Units of Stock that Have not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have not Vested | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have not Vested ($)(3) | |||||||||||||||||||||||||
Mark C. Capone | 9/10/2008 | 90,000 | 0 | $ | 22.93 | 9/10/2018 | ||||||||||||||||||||||||||||
2/18/2009 | 80,000 | 0 | $ | 30.12 | 2/18/2019 | |||||||||||||||||||||||||||||
09/15/2009 | 62,000 | 0 | $ | 30.34 | 9/15/2019 | |||||||||||||||||||||||||||||
03/03/2010 | 75,000 | 0 | $ | 23.11 | 3/3/2020 | |||||||||||||||||||||||||||||
09/15/2010 | 25,001 | 0 | $ | 16.53 | 9/15/2020 | |||||||||||||||||||||||||||||
02/23/2011 | 31,250 | 0 | $ | 18.00 | 2/23/2021 | |||||||||||||||||||||||||||||
09/13/2011 | 144,000 | 0 | $ | 19.47 | 9/13/2022 | |||||||||||||||||||||||||||||
03/07/2012 | 52,000 | 0 | $ | 23.98 | 3/7/2022 | |||||||||||||||||||||||||||||
09/12/2012 | 300,000 | 0 | $ | 27.07 | 9/12/2022 | |||||||||||||||||||||||||||||
09/17/2013 | 247,500 | 82,500 | $ | 26.49 | 9/17/2021 | |||||||||||||||||||||||||||||
09/17/2014 | 49,714 | 1,284,610 | ||||||||||||||||||||||||||||||||
09/15/2015 | 59,028 | 1,525,284 | ||||||||||||||||||||||||||||||||
09/14/2016 | 165,000 | 4,263,600 | ||||||||||||||||||||||||||||||||
Alexander Ford | 06/22/2010 | 4,000 | 0 | $ | 15.98 | 6/22/2020 | ||||||||||||||||||||||||||||
09/13/2011 | 10,551 | 0 | $ | 19.47 | 9/13/2021 | |||||||||||||||||||||||||||||
03/07/2012 | 4,000 | 0 | $ | 23.98 | 3/7/2022 | |||||||||||||||||||||||||||||
09/12/2012 | 35,000 | 0 | $ | 27.07 | 9/12/2022 | |||||||||||||||||||||||||||||
09/17/2013 | 41,250 | 13,750 | $ | 26.49 | 9/17/2021 | |||||||||||||||||||||||||||||
09/17/2014 | 8,250 | 213,180 | ||||||||||||||||||||||||||||||||
09/15/2015 | 12,375 | 319,770 | ||||||||||||||||||||||||||||||||
09/14/2016 | 60,000 | 1,550,400 | ||||||||||||||||||||||||||||||||
R. Bryan Riggsbee | 10/17/2014 | 15,000 | 387,600 | |||||||||||||||||||||||||||||||
09/15/2015 | 35,775 | 924,426 | ||||||||||||||||||||||||||||||||
09/14/2016 | 60,000 | 1,550,400 | ||||||||||||||||||||||||||||||||
Jerry S. Lanchbury, Ph.D. | 2/18/2009 | 60,000 | 0 | $ | 30.12 | 2/18/2019 | ||||||||||||||||||||||||||||
09/15/2009 | 50,000 | 0 | $ | 30.34 | 9/15/2019 | |||||||||||||||||||||||||||||
03/03/2010 | 50,672 | 0 | $ | 23.11 | 3/3/2020 | |||||||||||||||||||||||||||||
02/23/2011 | 80,000 | 0 | $ | 18.00 | 2/23/2021 | |||||||||||||||||||||||||||||
09/13/2011 | 128,000 | 0 | $ | 19.47 | 9/13/2021 | |||||||||||||||||||||||||||||
03/07/2012 | 32,000 | 0 | $ | 23.98 | 3/7/2022 | |||||||||||||||||||||||||||||
09/12/2012 | 160,000 | 0 | $ | 27.07 | 9/12/2022 | |||||||||||||||||||||||||||||
09/17/2013 | 135,000 | 45,000 | $ | 26.49 | 9/17/2021 | |||||||||||||||||||||||||||||
09/17/2014 | 29,376 | 759,076 | ||||||||||||||||||||||||||||||||
09/15/2015 | 34,880 | 901,299 | ||||||||||||||||||||||||||||||||
09/14/2016 | 50,000 | 1,292,000 | ||||||||||||||||||||||||||||||||
Richard M . Marsh, Esq. | 2/18/2009 | 77,654 | 0 | $ | 30.12 | 2/18/2019 | ||||||||||||||||||||||||||||
09/15/2009 | 66,139 | 0 | $ | 30.34 | 9/15/2019 | |||||||||||||||||||||||||||||
03/03/2010 | 70,672 | 0 | $ | 23.11 | 3/3/2020 | |||||||||||||||||||||||||||||
09/15/2010 | 79,999 | 0 | $ | 16.53 | 9/15/2020 | |||||||||||||||||||||||||||||
02/23/2011 | 84,445 | 0 | $ | 18.00 | 2/23/2021 | |||||||||||||||||||||||||||||
09/13/2011 | 144,000 | 0 | $ | 19.47 | 9/13/2021 | |||||||||||||||||||||||||||||
03/07/2012 | 31,830 | 0 | $ | 23.98 | 3/7/2022 | |||||||||||||||||||||||||||||
09/12/2012 | 180,000 | 0 | $ | 27.07 | 9/12/2022 | |||||||||||||||||||||||||||||
09/17/2013 | 142,500 | 47,500 | $ | 26.49 | 9/17/2021 | |||||||||||||||||||||||||||||
09/17/2014 | 28,472 | 735,716 | ||||||||||||||||||||||||||||||||
09/15/2015 | 33,806 | 873,547 | ||||||||||||||||||||||||||||||||
09/14/2016 | 50,000 | 1,292,000 |
Option Awards (1) | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Date of Grant | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have not Vested (#)(2) | Market Value of Shares or Units of Stock that Have not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have not Vested (#)(4) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have not Vested ($)(3) | |||||||||||||||||||||||||||
03/07/2012 | 6,000 | 0 | $23.98 | 03/07/2022 | ||||||||||||||||||||||||||||||||
09/12/2012 | 130,000 | 0 | $27.07 | 09/12/2022 | ||||||||||||||||||||||||||||||||
09/17/2013 | 110,000 | 0 | $26.49 | 09/17/2023 | ||||||||||||||||||||||||||||||||
09/14/2016 | 7,500 | 85,050 | ||||||||||||||||||||||||||||||||||
09/13/2017 | 15,000 | 170,100 | ||||||||||||||||||||||||||||||||||
09/19/2018 | 20,250 | 229,635 | ||||||||||||||||||||||||||||||||||
09/25/2019 | 27,000 | 306,180 | ||||||||||||||||||||||||||||||||||
Bernard F. Tobin (5) |
(1) | Stock Option Vesting Schedules: |
● | Options granted on and between September 14, 2005 through and including September 15, 2010 were granted pursuant to our 2003 Employee, Director and Consultant Stock Option Plan, as amended (the “2003 Plan”) and vested as to 25 percent of the shares per year on each anniversary of the date of grant. |
● | Options granted beginning on and after February 23, 2011 were granted pursuant to our 2010 Plan and vested as to 25 percent of the shares per year on each anniversary date of the grant. |
(2) | Restricted stock units vest1 |
(3) | The market value of restricted stock unit awards is determined by multiplying the number of shares by |
(4) | On September |
(5) | Mr. Tobin’s position was eliminated as part of a management restructuring effective May 1, 2020 and, consequently, he forfeited all unvested awards at that time. |
43
20172020 Fiscal-Year Option Exercises and Stock Vested
The following table shows information regarding exercises of options to purchase our common stock and vesting of restricted stock unit awards by our NEOs during the fiscal year ended June 30, 2017.2020.
Option Awards | Restricted Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | ||||||||||||
Mark C. Capone | None | — | 44,533 | 924,941 | ||||||||||||
Alexander Ford | None | — | 8,250 | 171,188 | ||||||||||||
R. Bryan Riggsbee | None | — | 19,425 | 390,242 | ||||||||||||
Jerry S. Lanchbury, Ph.D. | None | — | 26,315 | 546,557 | ||||||||||||
Richard M. Marsh, Esq. | None | — | 25,505 | 529,733 |
Option Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | ||||||||||||
R. Bryan Riggsbee | None | — | 53,800 | 1,575,232 | ||||||||||||
Mark C. Capone | 137,000 | 2,413,670 | 137,801 | 4,045,180 | ||||||||||||
Alexander Ford | 1,307 | 14,220 | 46,000 | 1,351,918 | ||||||||||||
Jerry S. Lanchbury, Ph.D. | None | — | 46,126 | 1,349,187 | ||||||||||||
Nicole Lambert | None | — | 8,341 | 244,415 | ||||||||||||
Bernard F. Tobin | None | — | 28,750 | 847,488 | ||||||||||||
Gary A. King
|
| 80,400
|
|
| 1,218,409
|
|
| 30,375
|
|
| 888,161
|
|
(1) | Amounts shown in this column do not necessarily represent the actual value realized from the sale of the shares acquired upon exercise of the options because the shares may not be sold on exercise but continue to be held by the executive officer exercising the option. The amounts shown represent the difference between the option exercise price and the market price on the date of exercise, which is the amount that would have been realized if the shares had been sold immediately upon exercise. |
(2) | Amounts shown in this column represent the market value of restricted stock unit awards upon vesting as determined by multiplying the number of shares by |
56 |
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
We do not have any qualified or non-qualified defined pension benefit plans.
Nonqualified Deferred Compensation
We do not have any nonqualified defined contribution plans or other deferred compensation plans.
Potential Payments Upon Termination or Change-in-Control
On February 17, 2005Beginning October 9, 2020 (and thereafter for subsequently appointed executive officers), we entered into Executive Retention Agreements, or the Retentionnew Severance and Change in Control Agreements with our executive officers.officers other than our Chief Executive Officer.
Under the terms of the Retentionthese Agreements, if the employment of an executive officer is terminated without “Cause” or if the executive officer separates from Myriad for “Good Reason” within 24 months of a “Change in Control” (each is defined in the agreement and set forth below), then the executive officer will receive: (i) allan amount equal to the executive’s then-current annual base salary earned throughand the date of termination, as well as a proratedexecutive’s then-current target annual bonus, any compensation previously deferred and any compensation previously deferred; (ii) an amount equal to three timesa prorated portion of the executive’s highest annual base salary and three times the executive’s highesttarget annual bonus at Myriad duringfor the three-year period priorthen-current fiscal year; (iii) immediate vesting of RSUs scheduled to vest within two years after termination; (iv) vesting of PSUs for two years following termination to the Change in Control; (iii)extent the relevant performance metrics for the PSU grant are achieved; and (v) reimbursement for continued medical benefits for 36until the earlier of 12 months after the date of termination; and (iv) outplacement services in an aggregate amount of up to $25,000. termination or the date the executive begins employment with another employer.
If the employment of an executive officer is terminated bywithout “Cause” or if the executive officer separates from Myriad for no reason, during the 90-day period beginning on the first anniversary of the‘‘Good Reason’’, within three months before or 24 months after a “Change in Control Date”Control” (as defined in the agreement and set forth below), then the termination shall be deemed to be termination for Good Reason for all purposes ofexecutive officer will receive the Retention Agreementsame benefits described in the preceding paragraph, except that the payment of an amount equal to three times the executive’s highest annual base salaryall outstanding and bonus shall be reduced by one-half. In addition, upon the occurrence of a Change in Control, all of the executive’s unvested equity incentive compensation shall become fully vested, whether or not the executive is terminated.
44
On October 12, 2007, the Retention Agreements were amended to provide that all payments under the agreement are to be madegrants will immediately vest in a lump sum, in cash, six months following the date of termination of employment, unless an earlier payment, in whole or in part, following the date of termination of employment is permitted under Section 409A of the Internal Revenue Code.
On September 29, 2015, the Retention Agreements were amended to delete the tax gross-up provision that previously allowed for a payment to be made by the Company to an executive officer in connection with a change in control of the Company to offset any excise taxes or penalties incurred by the executive officer under Section 4999 of the Internal Revenue Code in connection with a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code. No such payment is now permitted under the Retention Agreements and any excise taxes due shall be borne solely by the executive officer.
Unless the terms of the Retention Agreement are either satisfied or expire on a date that is 24 months after a Change in Control, the Retention Agreement will renew annually for one-year terms unless we provide notice of non-renewal at least 90 days prior to the end of each term.full.
As defined in the RetentionSeverance and Change-in-Control Agreements:
“Cause” |
“Good Reason” |
57 |
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
45
for one of the circumstances set forth in this Section 1(c) within sixty (60) days of such circumstance occurring (which notice shall set forth in reasonable detail the circumstance(s) that Employee alleges constitute(s) Good Reason), (B) if such circumstance is capable of being cured, the Company has failed to cure such circumstance within a period of thirty (30) days after the date of receipt of such written notice, and (C) Employee terminates Employee’s employment within sixty five (65) days from the date of the notice referred to in clause (A). For purposes of clarification, the above-listed conditions shall apply separately to each occurrence of Good Reason, and failure to adhere to such conditions in the event of a specific occurrence of Good Reason shall not disqualify Employee from asserting Good Reason for any subsequent occurrence of Good Reason. For purposes of this Agreement, “Good Reason” shall be interpreted in a manner, and limited to the extent necessary, so that it shall not cause adverse tax consequences for either party with respect to Section 409A of the Internal Revenue Code of 1986, as amended, and any successor statute, regulation and guidance thereto. |
● | “Change in Control” means |
58 |
The foregoing summary of the Retention Agreements is qualified in its entirety by the full text of the agreements, which has been filed as an exhibit to our Annual Report on Form 10-K, as amended.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
46
In addition, under the terms of the award agreements for optionsThe Company recently entered into new Severance and restricted stock units granted to our NEOs, all of the NEO’s stock options and restricted stock units shall become fully vested upon the occurrence of a Change in Control as defined in theAgreements with NEOs to replace their prior Executive Retention Agreements, whether or not the executive is terminated.
Agreements. The following table summarizes the potential payments to each of our NEOs upon eitherunder the new Severance and Change in Control Agreements in connection with (i) a termination without cause or with good reason following a change in control or (ii) a termination followingwithout cause or with good reason independent of a change in control, assuming the occurrence of the different triggers of the Retention Agreement, as of the close of business on June 30, 2017, the last business day of our most recent fiscal year.control.
Executive Benefits and Payments Upon Termination | Change in Control ($) | Change in Control and Involuntary Termination Without Cause or for Good Reason ($) | Change in Control and Voluntary Termination ($) | Executive Benefits and Payments Upon Termination | Change in Control and Involuntary Termination Without Cause or for Good Reason ($) | Involuntary Termination Without Cause or for Good Reason ($) | ||||||||||||||||||||||||||||||
Mark C. Capone | Base salary | — | 2,556,000 | 1,278,000 | — | — | — | |||||||||||||||||||||||||||||
Bonus | — | 2,223,720 | 1,111,860 | |||||||||||||||||||||||||||||||||
Stock option and RSU acceleration | 7,230,025 | 7,230,025 | 7,230,025 | |||||||||||||||||||||||||||||||||
Cobra benefits | — | 65,447 | 65,447 | |||||||||||||||||||||||||||||||||
Outplacement | — | 25,000 | 25,000 | |||||||||||||||||||||||||||||||||
|
|
| ||||||||||||||||||||||||||||||||||
Total | 7,230,025 | 12,100,192 | 9,710,332 | |||||||||||||||||||||||||||||||||
Alexander Ford | Base salary | — | 1,497,600 | 748,800 | ||||||||||||||||||||||||||||||||
Bonus | — | 736,818 | 368,409 | |||||||||||||||||||||||||||||||||
Stock option and RSU acceleration | 2,074,413 | 2,074,413 | 2,074,413 | |||||||||||||||||||||||||||||||||
Cobra benefits | — | 65,447 | 65,447 | |||||||||||||||||||||||||||||||||
Outplacement | — | 25,000 | 25,000 | |||||||||||||||||||||||||||||||||
|
|
| ||||||||||||||||||||||||||||||||||
Total | 2,074,413 | 4,399,277 | 3,282,068 | |||||||||||||||||||||||||||||||||
R. Bryan Riggsbee | Base salary | — | 1,296,000 | 648,000 | Base salary | 552,796 | 552,796 | |||||||||||||||||||||||||||||
Bonus | — | 692,064 | 346,032 | |||||||||||||||||||||||||||||||||
Stock option and RSU acceleration | 2,907,000 | 2,907,000 | 2,907,000 | Bonus | 180,209 | 180,209 | ||||||||||||||||||||||||||||||
Cobra benefits | — | 65,447 | 65,447 | |||||||||||||||||||||||||||||||||
Outplacement | — | 25,000 | 25,000 | Stock option and RSU acceleration | 3,348,444 | 1,721,316 | ||||||||||||||||||||||||||||||
|
|
| ||||||||||||||||||||||||||||||||||
Total | 2,907,000 | 4,985,511 | 3,991,479 | Cobra benefits | 24,815 | 24,815 | ||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||
Total | 4,106,264 | 2,479,136 | ||||||||||||||||||||||||||||||||||
Alexander Ford (2) | — | — | — | |||||||||||||||||||||||||||||||||
Jerry S. Lanchbury, Ph.D. | Base salary | — | 1,481,346 | 740,673 | Base salary | 493,496 | 493,496 | |||||||||||||||||||||||||||||
Bonus | — | 644,385 | 322,193 | |||||||||||||||||||||||||||||||||
Stock option and RSU acceleration | 3,047,312 | 3,047,312 | 3,047,312 | Bonus | 131,599 | 131,599 | ||||||||||||||||||||||||||||||
Cobra benefits | — | 65,447 | 65,447 | |||||||||||||||||||||||||||||||||
Outplacement | — | 25,000 | 25,000 | Stock option and RSU acceleration | 1,590,132 | 1,117,016 | ||||||||||||||||||||||||||||||
|
|
| ||||||||||||||||||||||||||||||||||
Total | 3,047,312 | 5,263,490 | 4,200,624 | Cobra benefits | 24,815 | 24,815 | ||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||
Richard M. Marsh, Esq. | Base salary | — | 1,481,346 | 740,673 | ||||||||||||||||||||||||||||||||
Total | 2,240,042 | 1,766,926 | ||||||||||||||||||||||||||||||||||
Nicole Lambert | Base salary | 386,859 | 386,859 | |||||||||||||||||||||||||||||||||
Bonus | — | 666,606 | 333,303 | |||||||||||||||||||||||||||||||||
Stock option and RSU acceleration | 2,990,777 | 2,990,777 | 2,990,777 | Bonus | 99,934 | 99,934 | ||||||||||||||||||||||||||||||
Cobra benefits | — | 65,447 | 65,447 | |||||||||||||||||||||||||||||||||
Outplacement | — | 25,000 | 25,000 | Stock option and RSU acceleration | 828,405 | 472,191 | ||||||||||||||||||||||||||||||
|
|
| ||||||||||||||||||||||||||||||||||
Total | 2,990,777 | 5,229,176 | 4,155,200 | Cobra benefits | 24,815 | 24,815 | ||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||
Total | 1,340,013 | 983,799 | ||||||||||||||||||||||||||||||||||
Bernard F. Tobin (3) | — | — | — | |||||||||||||||||||||||||||||||||
Gary A. King (4)
| —
|
| —
|
|
| —
|
|
(1) | Mr. Capone’s employment with the Company terminated on February 6, 2020 and the information for Mr. Capone is provided based on the provisions of his Separation and Consulting Agreement with the Company. Mr. Capone received $600,231 in severance payments, a prorated bonus of $184,211, and vested in 232,500 restricted stock units. |
(2) | Mr. Ford resigned from the Company effective October 2, 2020. |
(3) | Mr. Tobin’s employment with the Company terminated on May 1, 2020 and the information for Mr. Tobin is provided based on the provisions of his separation agreement with the Company. Mr. Tobin received $281,096 in a single severance payment and a prorated bonus of $95,163.. |
(4) | Mr. King retired from the Company on October 1, 2020. |
The following is a description of the assumptions that were used in creating the above table.
Vesting Acceleration Calculation —