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INARI MEDICAL, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 27, 2021APRIL 24, 2024
April 16, 2021March 13, 2024
Dear Stockholder:
You are cordially invited to attend the 20212024 annual meeting of the stockholders (the “Annual Meeting”) of Inari Medical, Inc., a Delaware corporation (“we,” “us,” “Inari” or the “Company”). The Annual Meeting will be held in a virtual meeting format via a live internet webcast at www.proxydocs.com/NARIon Thursday, May 27, 2021Wednesday, April 24, 2024 at 8:1:00 a.m.p.m. (Pacific Time) for the following purposes:
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| 4. | Transact any other business properly brought before the Annual Meeting. |
These items of business are more fully described in the proxy statement accompanying this Notice of Annual Meeting of Stockholders.
The record date for the Annual Meeting is March 31, 2021February 28, 2024 (the “Record Date”). Only stockholders of record at the close of business on the Record Date are entitled to receive notice of, and may vote at, the Annual Meeting or any continuation, postponement or adjournment thereof. We intend to mail the Notice Regarding the Availability of Proxy Materials, or the proxy statement and proxy card, as applicable, on or about March 13, 2024, to our stockholders of record on the Record Date.
The 20212024 Annual Meeting will be held in a virtual meeting format only, via thea live internet webcast, with no physical in-person meeting. Stockholders will be able to attend, vote and submit questions via the internet similar to attendance at an in-person meeting. You are cordially invited to attend. If you plan to participate inattend the virtual Annual Meeting, please see the Questions and Answers section below for further information.important information, including registration requirements.
If you have any questions or need assistance in voting your shares, please write to Inari Investor Relations at IR@inarimedical.com.
By Order of the Board of Directors
| By Order of the Board of Directors |
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| Angela Ahmad |
| General Counsel & Secretary |
| Irvine, California |
Angela Ahmad
General Counsel & Secretary
Irvine, California
YOUR VOTE IS IMPORTANT! ALL STOCKHOLDERS ARE CORDIALLY INVITED TO
VIRTUALLY ATTEND THE ANNUAL MEETING.MEETING
Whether or not you expect to attend the Annual Meeting, please complete, date, sign and return thesubmit your proxy card, or vote over the internet or telephone as instructed in these materials,voting instructions as promptly as possible in order to ensure your representation at the Annual Meeting. Even if you have voted by proxy, you may still vote at the Annual Meeting. Meeting if you have registered in advance to attend the virtual Annual Meeting at www.proxydocs.com/NARI prior to the registration deadline of April 23, 2024, at 5:00 p.m. (Eastern Time). You will need your control number located with the proxy materials you received for the Annual Meeting to register.Please also note however that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the Annual Meeting, you maywill be required to obtain a legal proxy issued in your name from that record holder in order to be entitled to vote at the Annual Meeting. Please follow the instructions provided by your broker, bank or other nominee.
Table of Contents
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Inari Medical, Inc.
9 Parker,6001 Oak Canyon, Suite 100
Irvine, CA 92618
PROXY STATEMENT
FOR THE 20212024 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 27, 2021APRIL 24, 2024
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
Why didam I receive a one-page notice in the mail regarding the internet availability of proxy materials instead of a full set ofbeing provided with these proxy materials?
Pursuant to “Notice and Access” rules adopted by the Securities and Exchange Commission (the “SEC”), we have elected to provide access to our proxy materials over the internet. Accordingly, we are sending an Important Notice Regarding the Availability of Proxy Materials (the “Notice”) to our stockholders of record. Brokers, banks and other nominees will be sending a similar Notice to all beneficial owners of stock who hold their shares through such broker, bank or nominee. All record and beneficial stockholders will have the ability to access the proxy materials on the website referred to in the Notice free of charge or request to receive a printed set of the proxy materials for the Annual Meeting. Instructions on how to access the proxy materials over the internet or to request a printed copy may be found in the Notice.
We expect that this Proxy Statement and the Notice will be mailed to stockholders on or about April 16, 2021.March 13, 2024.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be held on
May 27, 2021April 24, 2024 at 8:1:00 a.m.p.m. (Pacific Time)
via the internet please(please visit www.proxydocs.com/NARI for more detailsdetails)
The Proxy Statement for the 2024 Annual Meeting and 2020 annual report on form 10-KAnnual Report for the year ended December 31, 2023 are available at: www.proxydocs.com/NARI.
How do I attend the Annual Meeting?
The 20212024 annual meeting of stockholders (the “Annual Meeting”) will be held on Thursday, May 27, 2021Wednesday, April 24, 2024 at 8:1:00 a.m.p.m. (Pacific Time) in a virtual meeting format.format via a live internet webcast at www.proxydocs.com/NARI. You will not be able to attend the Annual Meeting in person. At our virtual Annual Meeting, stockholders will be able to attend, vote and submit questions via the internet. In order to attend the virtual Annual Meeting you must register in advancewith your control number at www.proxydocs.com/NARI prior to the registration deadline of May 26, 2021April 23, 2024, at 5:00 p.m. (Eastern Time). Your control number is provided in the Notice or proxy (or voting instruction) card mailed to you. Upon completing your registration, you will receive further instructions via email, including your unique links that will allow you access to the Annual Meeting. For stockholders of record who have registered you will be permitted to vote and submit questions at the virtual Annual Meeting. For beneficial owners who hold their stock through brokers, banks, or other nominees who wish to vote or ask questions at the virtual Annual Meeting you will need to obtain a legal proxy from your broker, bank, or other nominee and provide that proxy as part of your registration.
On the day of the Annual Meeting, stockholders may begin to login to the virtual Annual Meeting beginning at 12:45 p.m. (Pacific Time), and the Annual Meeting will permitbegin promptly at 1:00 p.m. (Pacific Time). We will have technicians ready to assist you to submitwith any technical difficulties you may have accessing the Annual Meeting,
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including any difficulties voting or submitting questions. Your control number is providedIf you encounter any difficulties accessing the virtual meeting through your unique link posted in the Notice or proxy card mailed to you.instruction, email you receive after you register for the Annual Meeting at www.proxydocs.com/NARI, you may call the technical support number that will be posted in the instruction email you receive after you register for the Annual Meeting.
Whether or not you plan to attend the Annual Meeting, we urge you to vote and submit your proxy or voting instructions in advance of the Annual Meeting by one of the methods described in these proxy materials.
Information on how to vote at the Annual Meeting is discussed below. If you plan to attend the Annual Meeting, please note that attendance will be limited to record and beneficial stockholders as of the Record Date who have properly registered. To log in and register, stockholders (or their authorized representatives) will need the control number provided on their Notice or proxy card or Notice.(or voting instruction) card.
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Can I ask questions at the virtual Annual Meeting?
Stockholders as of our Record Date who have properly registered to attend and participate in our virtual Annual Meeting will have an opportunity to submit questions via the internet during a designated portion of the Annual Meeting. These stockholders may also submit a question in advance of the Annual Meeting by registering at www.proxydocs.com/NARI prior to the registration deadline of 5:00 p.m. Eastern Time on May 26, 2021. In both cases, stockholders must have available their control number provided on their proxy card or Notice.April 23, 2024. Stockholders will be limited to no more than two questions per person. During the Annual Meeting, we will answer as many stockholder submitted questions as time permits, and any questions that we are unable to address during the Annual Meeting will be published and answered on our website following the Annual Meeting with the exception of any questions that are irrelevant to the purpose of the Annual Meeting or our business or that contain inappropriate or derogatory references which are not in good taste. If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition.
Who can vote at the Annual Meeting?
Only stockholdersStockholders of record atas of the close of business on February 28, 2024, the Record Date, of March 31, 2021,or those with a valid proxy from a broker, bank or other nominee that held our shares on the Record Date will be entitled to vote at the Annual Meeting. OnAs of the Record Date, there were 49,582,58557,960,555 shares of common stock outstanding and entitled to vote.vote at the Annual Meeting.
Stockholder of Record: Shares Registered in Your Name
If, on March 31, 2021,February 28, 2024, your shares were registered directly in your name with Inari’s transfer agent, American Stock Transfer & Trust Company, LLC, then you are a stockholder of record. As a stockholder of record, you may vote at the Annual Meeting or vote by proxy. Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy over the telephone or on the internet as instructed below (see “How do I vote?”) or, if applicable, complete, date, sign and return the proxy card mailed to you to ensure your vote is counted. You must register in advance at www.proxydocs.com/NARI if you wish to attend and vote at the Annual Meeting.
Beneficial Owner: Shares Registered in the Name of a Broker, Bank or Other Nominee, and Plan Shares
If, on March 31, 2021,February 28, 2024, your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of shares held in “street name” and the Notice is being sent to you by the organization that holds your account.shares has sent you the Notice (or, depending on your election, you may have received a printed copy of this proxy statement and our 2023 Annual Report by mail or an electronic copy of those proxy materials by email). The organization holding your account is considered to be the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct your broker, bank or other nominee regarding how to vote the shares in your account. The deadline for submitting
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your voting instructions to your broker, bank or other nominee is listed on the Notice or other proxy materials sent to you. You are also invited to attend the Annual Meeting. If you want to attend the Annual Meeting, you must register in advance at www.proxydocs.com/NARI. If you want to vote in person virtually at the Annual Meeting, as part of the registration you maywill be instructed to obtain a legal proxy from your broker, bank or other nominee and to submit a copy in advance of the meeting. Further instructions will be provided to you as part of your registration process.
If you hold shares in any employee stock purchase plan or other equity plan of the Company (the “Plans”), then your proxy card, when signed and returned, or your telephone or internet proxy, will constitute voting instructions given to the trustee or Plan administrator for your shares held in the Plans. Shares in each of the Plans for which voting instructions are not received by 11:59 p.m. (Eastern Time) on May 24, 2021, or if no choice is specified, will be voted by an independent fiduciary.
What am I voting on?
There are twothree matters scheduled for a vote:
ElectionThe election of threefour Class I directors to serve until the 20242027 annual meeting of stockholders and until their successors are duly elected and qualified; andqualified (“Proposal 1”);
RatificationThe ratification of the selectionappointment of BDO USA, LLPP.C. (“BDO”) as the Company’s independent registered public accounting firm for the Company’s fiscal year ending December 31, 2021.2024 (“Proposal 2”); and
2The approval, on an advisory basis, of the compensation of our named executive officers as disclosed in this proxy statement (“Proposal 3”).
What if another matter is properly brought before the Annual Meeting?
The Board of Directors of the Company (the “Board” or the “Board of Directors”) knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, the proxy you submit will authorize the persons named in the accompanying proxy willtherein to vote the shares for which you grant your proxy on those matters in accordance with their best judgment.discretion.
What is the Board’s voting recommendation?
The Board recommends that you vote your shares:
“For” the election of all three nominees for director; and
| 1. | “FOR” each of the four Class I director nominees; |
| 2. | “FOR” the ratification of the appointment of BDO as the independent registered public accounting firm for the Company’s fiscal year ending December 31, 2024; and |
“For” the ratification of the selection of BDO as the Company’s independent registered public accounting firm for the Company’s fiscal year ending December 31, 2021.
| 3. | “FOR” the approval, on an advisory basis, of the compensation of our named executive officers. |
How do I vote?
With regard to the election of directors, you may either vote “For” the nominees or you may “Withhold” your vote for any one or more of the nominees you specify. For any other matters to be voted on, you may vote “For” or “Against” or abstain“Abstain” from voting.
The procedures for voting depend on whether your shares are registered in your name or are held by a bank, broker or other nominee:
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record, you may votethere are several ways to direct how your shares are voted at the Annual Meeting, vote by proxy over the telephone, vote by proxy through the internet, or vote by proxy using a proxy card provided by us.Meeting. Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the virtual Annual Meeting and vote even if you have already voted by
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proxy. Voting at the Annual Meeting will have the effect of revoking your previously submitted proxy (see “Can I change my vote after submitting my proxy?” below).
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| By Mail | If you received printed proxy materials, you may direct how your shares are voted at the Annual Meeting | |
| During the Annual Meeting | Instructions on how to vote while participating in the Annual Meeting live via the internet are posted at www.proxypush.com/NARI. To attend the Annual Meeting and vote your shares, you must register for the Annual Meeting by using the control number located on your Notice or proxy card. Please register at www.proxydocs.com/NARI prior to the registration deadline of April 23, 2024, at 5:00 p.m., Eastern Time. | |
Beneficial Owner: Shares Registered in the Name of Broker, Bank or Other Nominee
If you hold your shares through a broker, bank or other nominee (that is, in street name), you will receive a Notice or voting instruction form (if you received a printed copy of the proxy materials) from your broker, bank or nominee that includeincludes instructions that you must follow in order to submit your voting instructions and have your shares voted at the Annual Meeting. If you want to vote in person virtually at the Annual Meeting, you must register in advance at www.proxydocs.com/NARI. prior to the registration deadline of April 23, 2024, at 5:00 p.m., Eastern Time. You maywill be instructed to obtain a legal proxy from your broker, bank or other nominee and to submit a copy in advance of the meeting. Further instructions will be provided to you as part of your registration process.
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How many votes do I have?
On each matter to be voted upon, you have one vote for each share of common stock you ownowned as of March 31, 2021,February 28, 2024, the Record Date.
What if I return a proxy card or otherwise vote but do not make specific choices?
If you return a signed and dated proxy card, or otherwise vote, without marking voting selections, your shares will be voted as applicable, “For”in accordance with the recommendations of the Board, “FOR” the election of all threefour nominees for Class I director, and “For”“FOR” the ratification of the appointment of BDO as the Company’s independent registered public accounting firm.firm, and “FOR” the approval of the compensation of our named executive officers. If any other matter is properly presented at the Annual Meeting, your proxy holder (one ofshares will be voted as described above under “—What if another matter is properly brought before the individuals named on your proxy card) will vote your shares using his or her best judgment.Annual Meeting”.
Will my vote be kept confidential?
Proxies, ballots and voting tabulations are handled on a confidential basis to protect your voting privacy. This information will not be disclosed, except as required by law.
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Can I change my vote after submitting my proxy?
Yes. You can revoke your proxy at any time before the final vote at the Annual Meeting. If you are the record holder of your shares, you may revoke your proxy in any one of the following ways on or before the close of voting for the Annual Meeting:ways:
You may submit another properly completed proxy card with a later date.date by no later than April 23, 2024.
You may grant a subsequent timely proxy by telephone or through the internet.internet by no later than April 23, 2024.
| • | You may send a timely written notice that you are revoking your proxy to Inari’s Secretary at |
You may attend and vote at the Annual Meeting. Simply attending the Annual Meeting will not, by itself, revoke your proxy.
| • | You may attend and vote at the Annual Meeting if you have registered to attend the meeting at www.proxydocs.com/NARI prior to the registration deadline of April 23, 2024, at 5:00 p.m. (Eastern Time). Simply attending the Annual Meeting will not, by itself, revoke your proxy. |
Your most current proxy card or telephone or internet proxy is the one that is counted, so long as it is provided within the applicable deadline. If your shares are held by your broker, bankerbank or other nominee, you should follow the instructions provided by your broker, bank or other nominee to change your vote or revoke your proxy.
How are votes counted?
Votes will be counted by the inspector of election appointed for the Annual Meeting, who will separately count (i) votes “For,” votes to “Withhold” and broker non-votes for Proposal No. 1, the proposal to elect directors, and with respect to other proposal,(ii) votes “For,” votes “Against,” votes to “Abstain” and broker non-votes (if applicable). for Proposals No. 2 and No. 3.
What are “broker non-votes”?
Broker non-votes occur when a beneficial owner ofIf your shares are held in “street name” through a brokerage account, the broker that holds your shares is generally authorized to vote your shares in accordance with voting instructions received from you. If the broker does not give instructions to the broker, bank or other nominee holding the shares as to how to vote on “non-routine” proposals. Generally, if shares are held in street name, the beneficial owner of the shares is entitled to give voting instructions to the broker, bank or other nominee holding the shares. If the beneficial owner does not providereceive your voting instructions, the broker bank or other nominee can stillmay exercise discretionary authority to vote the shares with respect to certain matters that are considered to be “routine” under applicable stock exchange rules but cannot vote the shares with respect to “non-routine” matters. On non-routine
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proposals, any “uninstructed shares” may not be voted byOnly Proposal No. 2 (ratification of the broker, bank or nominee and are considered to be “broker non-votes.” Only the proposal to ratify the selectionappointment of our independent registered public accounting firmfirm) is considered a “routine” matter for this purpose and brokers, banks or other nominees generally have discretionary voting power with respect to such proposal.purpose. Brokers banks and other nominees do not have discretionary authority to vote on theProposal No. 1 (the election of directorsdirectors) or Proposal No. 3 (approval, on an advisory basis, of the compensation of our named executive officers), without voting instructioninstructions from the beneficial owner. If you do not submit voting instructions and your broker exercises discretion to vote your shares on Proposal No. 2, your shares will constitute “broker non-votes” on Proposal No. 1 and Proposal No. 3. Broker non-votes on Proposal No. 1 and Proposal No. 3 will be counted for the purpose of determining whether a quorum is present at the Annual Meeting.Meeting, but will not be counted in determining the outcome of those matters.
How many votes are needed to approve each proposal?
Proposal | Vote Required | Broker Discretionary Voting Allowed? | ||||
No. 1. | Election of Directors – | Plurality | No | |||
No. 2. | Ratification of the | Majority Cast | Yes | |||
| No. 3. | Approval, on an Advisory Basis, of the Compensation of our Named Executive Officers | Majority Cast | No | |||
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Voting Standard
A “Plurality,” with regard to the election of directors, means that the threefour nominees who receive the most “For” votes cast by the holders of shares either present at the Annual Meeting or represented by proxy will be elected to our Board. AThe approval by the holders of a majority in voting power of the votes cast affirmatively or negatively (excluding abstentions and broker non votes), or “Majority Cast,” with regardis required to the ratificationapprove Proposal No. 2 (ratification of the selectionappointment of our independent registered public accounting firm, means that a majorityfirm) and Proposal No. 3 (approval, on an advisory basis, of the votes cast on the proposal are voted “For” the proposal.compensation of our named executive officers).
Accordingly:
Proposal No. 1: For the election of directors, the three nominees receiving the most “For” votes from the holders of shares present at the Annual Meeting or represented by proxy and entitled to vote on Proposal No. 1 will be elected as Class I directors to hold office until the 2024 annual meeting of stockholders and until a successor is duly elected and qualified. Only votes “For” or “Withheld” will affect the outcome. Broker non-votes will have no effect.
| • | Proposal No. 1: For the election of directors, the four nominees receiving the most “For” votes from the holders of shares present at the Annual Meeting or represented by proxy and entitled to vote on Proposal No. 1 will be elected as Class I directors to hold office until the 2027 annual meeting of stockholders and until a successor is duly elected and qualified. Shares voted “withhold” and broker non-votes will not be considered votes cast on Proposal No. 1 and will not be counted in determining the outcome of the election of the director nominees. |
| • | Proposal No. 2: To be approved, a majority of the total votes cast on Proposal No. 2 must be voted “For” the ratification of the appointment of BDO as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2024. Abstentions will not be considered votes cast on Proposal No. 2 and thus will have no effect on this proposal. The ratification of the appointment of BDO is a matter on which a broker has discretionary voting authority, and thus, we do not expect any broker non-votes with respect to Proposal No. 2. Any broker non-votes will not be considered votes cast on Proposal No. 2 and will have no effect on this proposal. |
| • | Proposal No. 3: To be approved, a majority of the total votes cast on Proposal No. 3 must be voted “For” the approval, on an advisory basis, of the compensation of our named executive officers. Abstentions and broker non-votes will not be considered votes cast on Proposal No. 3 and will have no effect on this proposal. |
Please be aware that Proposal No. 2: To be approved, a majority of the total votes cast on2 and Proposal No. 2 must be voted “For” the ratification of the selection of BDO as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021. Abstentions3 are advisory only and broker non-votes will not be considered votes cast on Proposal No. 2; however,binding. The Board (including the ratification ofAudit Committee and the selection of BDO is a matter on which a broker, bank or other nominee has discretionaryCompensation Committee, as applicable) will review and consider the voting authority, and thus, we do not expect any broker non-votes with respect to Proposal No. 2.results when making future decisions regarding those matters.
What is the quorum requirement?
A quorum of stockholders is necessary to hold a valid stockholder meeting. A quorum will be present if stockholders holding at least a majority of the outstanding shares entitled to vote are present or represented by proxy at the Annual Meeting. On the Record Date, there were 49,582,58557,960,555 shares outstanding and entitled to vote. Thus, the holders of at least 24,791,29328,980,278 shares must be present or represented by proxy at the Annual Meeting to have a quorum.
Your shares will be counted towards the quorum only if you submit a valid proxy by mail, over the phone or through the internet, (or oneor a valid proxy is submitted on your behalf by your broker, bank or other nominee)nominee, or if you vote at the Annual Meeting. Abstentions, votes to “Withhold” and broker non-votes will be counted towards the quorum requirement. If there is no quorum, then either the chair of the Annual Meeting or the holders of a majority of shares present at the Annual Meeting or represented by proxy may adjourn the meeting to another date. At any adjourned Annual Meeting at which a quorum is present, any business may be transacted that might have been transacted at the Annual Meeting as originally notified. If the adjournment is for more than 30 days, or if after that adjournment a new record date is fixed for the adjourned Annual Meeting, a notice of the adjourned Annual Meeting shall be given to each stockholder of record entitled to vote at the adjourned Annual Meeting.
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How can I find out the results of the voting at the Annual Meeting?
Preliminary voting results will be announced at the Annual Meeting. In addition, final voting results will be published in a Current Report on Form 8-K that we expect to file with the SEC within four business days after the Annual Meeting.
Who is paying for this proxy solicitation?
The accompanying proxy is solicited on behalf of the Board for use at the Annual Meeting. Accordingly, the Company will pay for the entire cost of soliciting proxies. In addition to these proxy materials, our directors and employees may also solicit proxies in person, by telephone, or by other means of communication. Directors and employees of the Company will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other nominees for the cost of forwarding proxy materials to beneficial owners. In addition, we have retained Okapi Partners to assist in the solicitation of proxies for a fee of approximately $15,000 plus distribution costs and other expenses.
How can I access the list of stockholders entitled to vote at the Annual Meeting?
A complete list of stockholders of record on the Record Date will be available by request to IR@inarimedical.com for examination at our corporate offices by any stockholder for any purpose germane to the Annual Meeting for a period of 10 days prior to the Annual Meeting. To access the list during the Annual Meeting, please follow instructions you receive via email after your successful registration.
What does it mean if I receive more than one Notice?Notice, proxy card or voting instruction form?
If you receive more than one Notice or proxy card, your shares may be registered in more than one name or held in different accounts. Please follow the voting instructions on each Notice, proxy card or voting instruction form to ensure that all of your shares are voted.
When are stockholder proposals pursuant to Rule 14a-8 due for inclusion in our Proxy Statementproxy statement for next year’s annual meeting due?meeting?
Stockholders wishing to present proposals for inclusion in our Proxy Statementproxy statement for the 20222025 annual meeting of stockholders (the “2022“2025 Annual Meeting”) pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), must submit their proposals so that they are received by us at our principal executive offices no later than December 17, 2021.November 13, 2024, and must otherwise comply with Rule 14a-8. Proposals should be sent to our Secretary at 9 Parker,6001 Oak Canyon, Suite 100, Irvine, CA 92618.
When are other proposals and stockholder nominations due for next year’s annual meeting due?meeting?
With respect to proposals and nominations not to be included in our Proxy Statement pursuant to Rule 14a-8 of the Exchange Act, our Amended and Restated Bylaws (our “Bylaws”) provide that stockholders who wish to nominate a director or propose other business to be brought before the stockholders at an annual meeting of stockholders must notify our Secretary by a written notice, which notice must be received at our principal executive offices not less than 90 days nor more than 120 days prior to the anniversary date of the immediately preceding year’s annual meeting of stockholders.
Stockholders wishing to present nominations for director or proposals for consideration at the 20222025 Annual Meeting under these provisions of our Bylaws must submit their nominations or proposals so that they are received at our principal executive offices not earlier than January 27, 2022December 25, 2024 and not later than February 26, 2022January 24, 2025 in order to be considered. In the event that the 20222025 Annual Meeting is to be held on a date that is not withinmore than 30 days before or 60 days after the one-year anniversary of the Annual Meeting, then a stockholder’s notice must be received by the Secretary no earlier than 90 days prior to such annual meeting and no later than the tenth day following the day on which we make a public announcement of the date of the 20222025 Annual Meeting.
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Nominations or proposals should be sent in writing to our Secretarysecretary at 9 Parker,6001 Oak Canyon, Suite 100, Irvine, CA 92618. A stockholder’s notice to nominate a director or bring any other business before the Annual Meeting or the 20222025 Annual Meeting must set forth certain information, which is specified in our Bylaws.
We intend to file a Proxy Statement and WHITE proxy card with the SEC in connection with solicitation of proxies for our 2025 Annual Meeting. Stockholders may obtain our Proxy Statement (and any amendments and supplements thereto) and other documents as and when filed by us with the SEC without charge from the SEC’s website at: www.sec.gov.(1)
If you have any questions or need assistance in voting your shares, please write to Inari Investor Relations at IR@inarimedical.com.
EMERGING GROWTH COMPANY EXPLANATORY NOTE
We completed our initial public offering in May 2020. We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).
For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies but not to “emerging growth companies,” including, but not limited to:
not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act;
not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;
reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and
exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
We could be an emerging growth company until the last day of the fiscal year following May 22, 2025, the fifth anniversary of the closing of our initial public offering, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would require, among other things, that we have been a public company for at least twelve months and would occur at the end of the fiscal year during which the market value of our common stock held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period. Under Section 107(b) of the JOBS Act, emerging growth companies may delay adopting new or revised accounting standards until such time as those standards apply to private companies.
Because we have elected to take advantage of certain reduced disclosure obligations and may elect to take advantage of other reduced reporting requirements in future filings, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests.
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| (1) | Reference to the SEC website is not intended to function as a hyperlink and the information contained on the SEC website is not intended to be part of this proxy statement. |
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The Company’sUnder our governing documents, the Board has the power to set the number of directors from time to time by resolution. Our Board of Directors is presently comprisedcomposed of seventen members, who are divided into three classes, designated as Class I, Class II and Class III. One class of directors is elected by the stockholders at each annual meeting, with each director to serve from the time of theirhis or her respective election until the third annual meeting of stockholders following theirhis or her respective election and until theirhis or her respective successor is duly elected and qualified.qualified, or until his or her earlier death, resignation or removal. Class I directors consist of Rebecca Chambers, William Hoffman, Andrew Hykes and Donald Milder, Geoff Pardo and William Hoffman;Milder; Class II directors consist of Dana G. Mead, Jr., Kirk Nielsen and Catherine Szyman; and Class III directors consist of Cynthia Lucchese, Jonathan Root, M.D., and Cynthia Lucchese.Robert Warner. Kirk Nielsen will retire from our Board at the Annual Meeting.
The nominating and corporate governance committee of the Board has recommended, and the Board has approved, the nomination of each of our Class I directors, Ms. Chambers and Messrs. Hoffman, Hykes and Milder, Pardo and Hoffman, for re-election for a three-year termsterm expiring at the 20242027 annual meeting of stockholders and until their respective successors are duly elected and qualified, or, if sooner, until the director’s death, resignation or removal. Each of Ms. Chambers and Messrs. Milder, PardoHoffman, Hykes and HoffmanMilder is currently a director of the Company. Messrs. Hoffman and Midler were previously elected to the Board by our stockholders at our 2021 annual meeting, and each of Ms. Chambers and Mr. Hykes are standing for election by our stockholders for the first time. Mr. Hykes was appointed to the Board in connection with his promotion to serve as our Chief Executive Officer. Ms. Chambers was initially recommended for appointment to the Board by Mr. Hoffman.
Proxies cannot be voted for a greater number of persons than the number of nominees named in this Proxy Statement. Each nominee has agreed to serve if elected. If any nominee should become unavailableunable or unwilling for good cause to serve, for any reason, it is intended that votesthe named proxies will be casthave discretion to vote properly submitted proxies for a substitute nominee designated by our nominating and corporate governance committee and approved by the Board.Board, or our Board may choose to reduce its size. We have no reason to believe that any nominee named will be unable or unwilling to serve if elected.
Nominees for Director and Continuing Directors
The Board has fixed the authorized number of directors at nine to be effective as of the close of the Annual Meeting. The names and ages of the nominees and continuing directors, and their length of service with the Company and Board committee memberships are set forth in the table below.
Name | Age | Director Since | Class Current Term Expires | Independent | AC | CC | NCG | ||||||||||||||||||||||||||||||||||||||||||
Nominees | |||||||||||||||||||||||||||||||||||||||||||||||||
Rebecca Chambers | 46 | June 2021 | | Class I 2024 Annual Meeting | | Yes | | F, M, C** | | — | — | ||||||||||||||||||||||||||||||||||||||
William Hoffman. | 56 | February 2015 | | Class I 2024 Annual Meeting | | No | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Andrew Hykes | 51 | January 2023 | | Class I 2024 Annual Meeting | | No | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Donald Milder* | September 2011 | | Class I 2024 Annual Meeting | Yes | — | M | — | ||||||||||||||||||||||||||||||||||||||||||
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Dana G. Mead, Jr. | | Class 2025 Annual Meeting | Yes | — | M | — | |||||||||||||||||||||||||||||||||||||||||||
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Catherine Szyman | November 2019 | | Class II 2025 Annual Meeting | Yes | M** | M | — | ||||||||||||||||||||||||||||||||||||||||||
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Cynthia Lucchese | | Class III
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| Yes | F, C | — | M,C** | ||||||||||||||||||||||||||||||||||||||||||
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Name | Age | Director Since | Class Current Term Expires | Independent | AC | CC | NCG | |||||||||
Jonathan Root, M.D. | 64 | January 2023 | Class III 2026 Annual Meeting | Yes | — | C | M | |||||||||
Robert Warner | 57 | September 2011 | Class III 2026 Annual Meeting | Yes | M | — | — | |||||||||
*: ChairmanChair of the Board F: Financial Expert M: Member C: Committee Chair
AC: Audit Committee NCG: Nominating & Corporate Governance Committee CC: Compensation Committee
** Mr. Nielsen chaired the NCG through March 2024 and served on the CC through July 2023. Ms. Szyman served on the AC through July 2023 and joined the CC in July 2023. Effective April 1, Ms. Lucchese will serve as chair of the NCG and Ms. Chambers will serve as chair of the AC.
Biographical Information of Directors and Director Nominees
A brief biography of each nominee and each continuing director is set forth below, which includes information as of the Record Date, regarding specific and particular experience, qualifications, attributes or
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skills of each nominee that led the nominating and corporate governance committee and the Board to believe that the director should serve on the Board:Board.
Director Nominees
| Class I Director Nominees | ||
Director since 2021 Age: 46 | Rebecca Chambers has served as member of our board of directors since June 2021. Since July 2021, Ms. Chambers has served as the Chief Financial Officer and Executive Vice President of Veracyte, Inc., a publicly traded global genomic diagnostics company. From June 2019 to July 2021, Ms. Chambers served as the Chief Financial Officer of Outset Medical, Inc., a medical technology company pioneering a novel technology to reduce the cost and complexity of dialysis. Prior to that, she was at Illumina, a genetic tools company, where she served in a number of roles: as the Vice President, Financial Planning and Analysis from July 2017 to May 2019, as Vice President, Investor Relations and Treasury from April 2015 to June 2017, and as Senior Director, Investor Relations from October 2012 to April 2015. Previously, Ms. Chambers served as Head of Investor Relations and Corporate Communications at Myriad Genetics, a molecular diagnostic company, from January 2011 to October 2012, and in various roles in investor relations at Life Technologies, a biotechnology company, from May 2009 to December 2010. She also previously held positions with Bank of America, a financial services company, and Millennium Pharmaceuticals, a biopharmaceutical company that was acquired by Takeda Pharmaceuticals Co. Ms. Chambers holds a B.S. from John Carroll University and an M.B.A. from The S.C. Johnson Graduate School of Management, Cornell University. | |
We believe Ms. Chambers’s extensive healthcare leadership experience in high growth companies qualifies her to serve on our Board.
Donald Milder
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Director since 2015 Age: 56 | William Hoffman has served as a member of our Board since February 2015 and previously served as our Chief Executive Officer and President from February 2015 until December 2022. Mr. Hoffman previously served as Chief Executive Officer at Visualase, Inc., a private company focusing on MRI-guided lasers, from May 2008 until its acquisition by Medtronic PLC, in July 2014. Prior to this, Mr. Hoffman was the Chief Operating Officer of Rubicor Medical, Inc., a private company focusing on minimally invasive breast biopsy and lumpectomy technology, from April 2006 to November 2007. From July 2003 to February 2006, Mr. Hoffman served as Director of Sales and then the Vice President of Sales at FoxHollow Technologies, Inc, a private and later, a public company that makes medical devices used to treat peripheral artery disease. He currently serves on the board of Magenta Medical, Inc., a privately-held company dedicated to the development of miniaturized blood pumps, and is a partner at Vensana Capital, a medtech-focused investment firm. Mr. Hoffman received a B.A. from Dickinson College. |
We believe Mr. Hoffman’s extensive management experience in the medical device industry, and his understanding of our Board since September 2011business, operations and as Chair ofstrategy qualify him to serve on our Board since December 2019. In 1999, Mr. Milder co-founded Versant Venture Management, LLC, or Versant, where he has been a Managing Director since its inception. Versant is a venture capital firm that invests in medical devices, biotechnology, life science, pharmaceuticals and healthcare sectors. Previously, Mr. Milder was a Managing Director with CPVP Management LP from August 1989 to November 1999, where he was responsible for their healthcare investments. Prior to this, Mr. MilderBoard.
Director since 2023 Age: 51 | Andrew Hykes has served as our Chief Executive Officer, President and a member of our Board since January 2023. Mr. Hykes previously served as our Chief Operating Officer from October 2020 to December 2022, and as our Chief Commercial Officer since September 2017. From November 2012 to January 2017, Mr. Hykes was the Vice President of Commercial Operations of Sequent Medical Inc., a private company focused on catheter-based neurovascular therapies that was acquired by Terumo Corporation in July 2016. Prior to this, Mr. Hykes worked for Medtronic PLC, a public medical device company, from August 2002 to October 2012, where he held several positions including Vice President of Marketing, Vice President of Clinical and Regulatory Affairs and Director of Investor Relations. From 1995 to 2000, Mr. Hykes worked in healthcare banking for ABN AMRO Bank. Mr. Hykes received his B.B.A. from the University of Wisconsin Madison and an M.B.A. from Harvard Business School. |
We believe that Mr. Hykes’ proven medical device operating executive leadership, with broad functional, geographic and sector experience, qualifies him to serve as our Chief Executive Officer of Infusion Systems Corporation from 1984 to 1989. He currently serves as a board member for several private companies and a charitable foundation. Mr. Milder received a B.A. from Union College and an M.B.A. from Harvard Business School.on our Board.
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Director since 2011 Age: 70 | Donald Milder has served as a member of our Board since September 2011 and as Chair of our Board since December 2019. In 1999, Mr. Milder co-founded Versant Venture Management, LLC, or Versant, where he has been a Managing Director since its inception. Versant is a venture capital firm that invests in medical devices, biotechnology, life science, pharmaceuticals and healthcare sectors. Previously, Mr. Milder was a Managing Director with CPVP Management LP from August 1989 to November 1999, where he was responsible for their healthcare investments. Prior to this, Mr. Milder was the Chief Executive Officer of Infusion Systems Corporation from 1984 to 1989. He currently serves as a board member for several private companies and a charitable foundation. Mr. Milder received a B.A. from Union College and an M.B.A. from Harvard Business School. |
We believe Mr. Milder is qualified to serve as a director and as the Chair of our Board due to his extensive experience as a venture capital investor and member of the board of multiple medical device companies.
Geoff Pardo has served as a member of our Board since March 2018. Mr. Pardo has served as a partner at Gilde Healthcare since 2011. Previously, he was a partner at Spray Venture Partners from 2004 to 2011. He also served as President and Chief Executive Officer of Facet Solutions, a spinal implant company focused on treating lumbar spinal stenosis, from 2007 until the company was sold to Globus Medical in 2011. He has also worked at Cardinal Partners as an Associate leading their investing activity in the medical device sector from 2001 to 2004. He currently serves as a board member of Eargo, Inc., a public company manufacturer of medical devices to address hearing loss., and on several private company boards in the healthcare industry. Mr. Pardo received a B.A. from Brown University and an M.B.A. from The Wharton School of Business.
We believe Mr. Pardo’s experience leading and managing a medical technology company, as well as his healthcare industry knowledge and his experience serving on the board of directors of other companies, qualified him to serve on our Board.
William Hoffman has served as our Chief Executive Officer and President and as a member of our Board since February 2015. Mr. Hoffman previously served as Chief Executive Officer at Visualase, Inc., a private company focusing on MRI-guided lasers, from May 2008 until its acquisition by Medtronic PLC, or Medtronic, in July 2014. Prior to this, Mr. Hoffman was the Chief Operating Officer of Rubicor Medical, Inc., a private company focusing on minimally invasive breast biopsy and lumpectomy technology, from April 2006 to November 2007. From July 2003 to February 2006, Mr. Hoffman served as Director of Sales and then the Vice President of Sales at FoxHollow Technologies, Inc, a private company that makes medical devices used to treat peripheral artery disease. Mr. Hoffman received a B.A. from Dickinson College.
We believe Mr. Hoffman’s extensive management experience in the medical device industry, and his understanding of our business, operations and strategy qualify him to serve as our Chief Executive Officer and on our Board.
Continuing Directors
Kirk Nielsen has served as a member of our Board since September 2011. Mr. Nielsen has been a Managing Partner at Vensana Capital, a medtech-focused investment firm, since January 2019, and a Managing Director of Versant Ventures, a healthcare-focused venture capital firm, since January 2011. He currently serves as a board member for several private companies in the healthcare industry. Mr. Nielsen received an A.B. from Harvard College and an M.B.A. from Harvard Business School.
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We believe Mr. Nielsen is qualified to serve on our Board due to his extensive management experience serving on the board of several medical technology companies.
Catherine Szyman has served as a member of our Board since November 2019. Since January 2015, Ms. Szyman has been the Corporate Vice President of Critical Care at Edwards Lifesciences Corp., a public company specializing in artificial heart valves and hemodynamic monitoring. Prior to this, Ms. Szyman worked at Medtronic from August 1991 to December 2014, where she held a number of roles, including President of Global Diabetes, Vice President of Corporate Strategy and Business Developments, Vice President and General Manager for the endovascular business and Vice President of Finance for the vascular business. Ms. Szyman currently serves on the board of directors of Endotronix, Inc., a private medical device company, Opus College of Business at the University of St. Thomas and the American Heart Association, a non-profit organization that funds cardiovascular medical research. Ms. Szyman has a B.A. from University of St. Thomas and an M.B.A. from Harvard Business School.
We believe Ms. Szyman is qualified to serve on our Board because of her extensive leadership experience and knowledge of medical device companies.
Jonathan Root, M.D. has served as a member of our Board since September 2011. Dr. Root has served as the Managing Member of Presidio Management Group X, LLC and several U.S. Venture Partners’ funds, which are the general partners of various other venture capital funds, since 1998. Dr. Root currently serves on the board of directors of two public companies – Silverback Therapeutics, Inc., a clinical stage biopharmaceutical company focused on treating cancer, chronic viral infections and other serious diseases, and Edgewise Therapeutics, Inc., a clinical stage biopharmaceutical company focused on treating severe, rare muscle disorders. Additionally, Dr. Root currently serves on the board of directors for several private companies in the healthcare industry. Dr. Root received an A.B. from Dartmouth College, an M.D. from University of Florida, College of Medicine and an M.B.A. from Columbia Business School.
We believe Dr. Root’s medical, management and directorship experience in the healthcare industry qualified him to serve on our Board.
Cynthia Lucchese has served as a member of our Board since November 2019. Since November 2020, Ms. Lucchese has been Chief Strategy Officer of Penske Entertainment Corp., a privately held company which owns and operates the Indianapolis Motor Speedway, INDYCAR racing league and IMS Productions. From November 2015 through October 2020, Ms. Lucchese served as Chief Administrative Officer and Chief Financial Officer of Penske Entertainment Corp. Prior to this she was the Senior Vice President and Chief Financial Officer of Hillenbrand, Inc., a public company with multiple brands that serve a range of industries across the globe, from January 2008 until March 2014. Ms. Lucchese has experience with medical device and life sciences companies, including Guidant, Thoratec and Eli Lilly. Ms. Lucchese currently serves on the board of two public companies. Since July 2014, she has been a board member and serves as chair of the audit committee and a member of the nominating and corporate governance committee of Intersect ENT, Inc., a publicly traded medical device company. Additionally, Ms. Lucchese has been a board member of Hanger, Inc., a public company that delivers orthotic and prosthetic products and patient care, since May 2015. Ms. Lucchese became a member of Hanger’s audit committee in November 2017 and previously was a member of the compensation committee. Ms. Lucchese is also a board member and audit committee chair for BVI International, Inc., a privately owned global ophthalmic device company. Ms. Lucchese has a B.S. in accounting and an M.B.A. from Indiana University, Kelley School of Business.
Continuing Directors | ||
Director since 2019 Age: 63 | Cynthia Lucchese has served as a member of our Board since November 2019. From November 2020 through February 2023, Ms. Lucchese was the Chief Strategy Officer of Penske Entertainment Corp., a subsidiary of Penske Corporation, and she served as Chief Administrative Officer and Chief Financial Officer from November 2014 to November 2020. Prior to this, she was Senior Vice President and Chief Financial Officer of Hillenbrand from 2008 to 2014. Ms. Lucchese has more than twenty years of experience with medical device and life sciences companies. including Guidant, Eli Lilly, and Thoratec, where she served as Senior Vice President and Chief Financial Officer. Ms. Lucchese currently serves on the board of CooperCompanies, a global medical device company, where she serves as member of the audit committee and corporate governance and nominating committee. She is also a member of the board of directors of BVI Medical, a privately owned global surgical ophthalmic company, where she serves as chair of the audit committee. Ms. Lucchese is also a member of the Board of Trustees of Indiana University. Ms. Lucchese previously served as a member of the board of directors and chair of the audit committee of Relievant Medsystems from December 2022 until its acquisition by Boston Scientific in November 2023. She served on the board and audit committee of Hanger from May 2015 until its acquisition in October 2022 by Patient Square Capital, and on the board of Intersect ENT from 2014 until its acquisition by Medtronic in May 2022, where she served on the nominating & corporate governance committee and as chair of the audit committee. She also served on the board of Brightpoint from 2009 until its acquisition by Ingram Micro in 2012, where she served as chair of the audit committee and a member of the nominating & corporate governance committee. Ms. Lucchese earned her undergraduate degree in accounting and MBA from the Indiana University Kelley School of Business. |
We believe Ms. Lucchese is qualified to serve on our Board because of her extensive experience in accounting, finance, and business strategy, serving as a board member of public companies, and in the medical device industry.
THE
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Director since 2021 Age: 65 | Dana G. Mead, Jr. has served as a member of our Board since October 2021. From May 2019 to February 2021, Mr. Mead served as President and CEO of HeartFlow, Inc., a medical device company located in Redwood City, CA. From November 2016 to May 2019, Mr. Mead served as the President and Chief Executive Officer of Beaver-Visitec International, a medical device company located in Waltham, MA. Previously, Mr. Mead was a Strategic Advisor and Partner at Kleiner Perkins Caufield & Byers, a venture capital firm, having joined the firm in May 2005 and serving until June 2016. Mr. Mead was at Guidant Corporation, a cardiovascular medical device company, from 1992 to 2005, most recently as President, Guidant Vascular Intervention. Mr. Mead currently serves on the boards of Inspire Medical Systems, Inc. (NYSE: INSP), a medical technology company, where he serves as a member of the audit committee, and Pulmonx Corporation (NASDAQ: LUNG), a medical device company, where he serves as chair of the board. He previously served on the board of Intersect ENT, Inc. until its acquisition by Medtronic Inc. in 2022. Mr. Mead holds a B.A. from Lafayette College and an M.B.A. from the University of Southern California. |
We believe Mr. Mead is qualified to serve on our Board due to his extensive leadership experience in the medical device space, and his significant experience serving on public company boards.
Director since 2011 Age: 64 | Jonathan Root, M.D. has served as a member of our Board since September 2011. Dr. Root has served as the Managing Member of Presidio Management Group X, LLC and several U.S. Venture Partners’ funds, which are the general partners of various other venture capital funds, since 1998. Dr. Root currently serves on the board of Edgewise Therapeutics, Inc. (NASDAQ: EWTX), a clinical stage biopharmaceutical company focused on treating severe, rare muscle disorders, where he serves as a member of the audit committee and nominating and corporate governance committee. Dr. Root served on the boards of directors of Silverback Therapeutics, Inc., until its acquisition by ARS Pharmaceuticals, Inc., and eFFECTOR Therapeutics, Inc., a NASDAQ listed biopharmaceutical company, from May 2013 to February 2022. Additionally, Dr. Root currently serves on the board of directors for several private companies in the healthcare industry. Dr. Root received an A.B. from Dartmouth College, an M.D. from University of Florida, College of Medicine and an M.B.A. from Columbia Business School. |
We believe Dr. Root’s medical, management and directorship experience in the healthcare industry qualifies him to serve on our Board.
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Director since 2019 Age: 57 | Catherine Szyman has served as a member of our Board since November 2019. Since January 2015, Ms. Szyman has been the Corporate Vice President of Critical Care at Edwards Lifesciences Corp., a public company and global leader in patient-focused medical innovations for structural heart disease and critical care and surgical monitoring. Prior to this, Ms. Szyman worked at Medtronic from 1991 to 2014, where she held a number of roles, including President of Global Diabetes, Vice President of Corporate Strategy and Business Development, Vice President and General Manager for the Endovascular business and Vice President of Finance for the Vascular business. Ms. Szyman currently serves on the board of Outset Medical, Inc. (NASDAQ: OM), a medical technology company pioneering a first-of-its-kind technology to reduce the cost and complexity of dialysis, where she serves as a member of the compensation committee. Ms. Szyman has a B.A. from University of St. Thomas and an M.B.A. from Harvard Business School. |
We believe Ms. Szyman is qualified to serve on our Board because of her extensive leadership experience and knowledge of medical device companies.
Director since 2022 Age: 57 | Robert Warner has served as a member of our Board since March 2022. From August 2015 to February 2018, Mr. Warner served as President and General Manager of Alcon Vision Care Franchise (Alcon), an eye care device company with complimentary business in surgical and vision care. Prior to that, Mr. Warner served as President, U.S. and Canada, for Alcon from January 2012 to July 2015 and as President, Canada and Latin America, for Alcon from November 2010 to January 2012. From January 2005 to October 2010, Mr. Warner served in positions of increasing responsibility for Alcon. Mr. Warner was a member of the Alcon Executive Leadership Team for over 10 years and led the Alcon transition from Nestle to Novartis majority ownership. Since August 2021, Mr. Warner has served on the board of directors of RXSight, Inc. (NASDAQ: RXST), a commercial-stage medical technology company dedicated to improving the vision of patients through cataract surgery, where he also serves as chair of the nominating and corporate governance committee and as a member of the compensation committee. Mr. Warner currently serves on the board of two private medical device companies, i-Lumen Scientific, where he is also a member of the compensation committee, and EyeYon Medical, where he also serves as Chairman. In addition, Mr. Warner is a board member of GRACE, the Grapevine Relief and Community Exchange, a nonprofit relief agency that provides vital necessities to people who are struggling with a limited income or recent emergency. Mr. Warner holds a B.S. in Chemistry from Pace University and an MBA from Rutgers University. |
We believe Mr. Warner’s decades of executive operating experience, including internationally, qualifies him to serve on our Board.
OUR BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF“FOR” EACH OF THE THREEFOUR NAMED CLASS I DIRECTOR NOMINEES. PROXIES WILL BE VOTED “FOR” THE ELECTION OF THE NOMINEES UNLESS OTHERWISE SPECIFIED.
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This section describes key corporate governance guidelines and practices that we have adopted. Complete copies of our Corporate Governance Guidelines, the charters of the committees of the Board and our Code of Ethics and Conduct, described below, can be found in the Governance section of the Investor Relations section of our website at www.inarimedical.com. Alternatively, you can request a copy of any of these documents free of charge by writing to: Angela Ahmad, General Counsel & Secretary, c/o Inari Medical, Inc., 9 Parker,6001 Oak Canyon, Suite 100, Irvine, CA 92618. Information on or accessible through our website is not incorporated by reference in this Proxy Statement.
BOARD COMPOSITION
Our Board of Directors currently consists of seventen members. In accordance with our Restated Certificate of Incorporation and our Bylaws, our directors are divided into three classes serving staggered three-year terms. At each annual meeting of stockholders, our directors will be elected to succeed the class of directors whose terms have expired. Our current directors are divided among the three classes as follows:
Class I directors consist of Rebecca Chambers, William Hoffman, Andrew Hykes and Donald Milder, Geoff Pardo and William Hoffman, whose terms expire at the Annual Meeting;
Class II directors consist of Dana G. Mead, Jr., Kirk Nielsen and Catherine Szyman, whose terms expire at the 2022 annual meeting of stockholders;2025 Annual Meeting except that Mr. Nielsen will retire from the Board at the Annual Meeting; and
Class III directors consist of Cynthia Lucchese, Jonathan Root, M.D. and Cynthia Lucchese,Robert Warner, whose terms expire at the 20232026 annual meeting of stockholders.
Only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective terms. Each director’s term continues until the election and qualification of their successor, or their earlier death, resignation or removal. The Board has fixed the authorized number of directors at nine to be effective as of the Annual Meeting.
INDEPENDENCE OF THE BOARD OF DIRECTORS
The Board has affirmatively determined that alleach of the nomineesMses. Chambers, Lucchese and continuing directors, other than Mr. Hoffman,Szyman, Dr. Root, and Messrs. Mead, Milder, Nielson, and Warner are independent directors within the meaning of the applicable Nasdaq listing standards and relevant securities and other laws, rules and regulations regarding the definition of “independent” (the “Independent Directors”). Messrs. Hoffman and Hykes are not independent directors as a result of their former and current position as our Chief Executive Officer, respectively. In making these independence determinations, our Board of Directors considered the current and prior relationships that each non-employee director has with our Company and all other facts and circumstances our Board of Directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director, and any transactions involving them described in the section titled “Certain Relationships and Related Party Transactions”. There are no family relationships among any of our directors or between any director and any of our executive officers.
BOARD LEADERSHIP STRUCTURE
The Board believes that it is important to retain the flexibility to allocate the responsibilities of the offices of ChairmanChair of the Board and Chief Executive Officer in any manner that it determines to be in the best interests of the Company at any point in time.
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The Board reviews its leadership structure periodically as part of its annual self-assessment process.process and the Board reaffirms the selection of the Chair annually. In addition, the Board continues to monitor developments in corporate governance as well as the approaches our peers undertake. The Board believes that the current Board leadership structure, with Mr. Milder serving as our Chair and Mr. HoffmanHykes serving as our Chief Executive Officer, provides effective independent oversight of management. Our Independent Directors bring experience, oversight and expertise from outside of our Company, while Mr. HoffmanHykes brings Company-specific experience, expertise and leadership.
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The Board does not have a lead Independent Director since our Chair is independent. Our Corporate Governance Guidelines provide that our Independent Directors meet in executive session without non-Independent Directors or management present on a regularly scheduled basis, but no less than twice per year. The Board, including each of its committees, also has complete and open access to any member of the Company’s management and the authority to retain independent advisors as the Board or such committee deems appropriate. In addition, all members of the audit committee, the nominating and corporate governance committee and the compensation committee are Independent Directors, and the committee chairs have authority to hold executive sessions without management and non-Independent Directors present.
BOARD DIVERSITY
We consider diversity, such as gender, race and ethnicity, and diversity of backgrounds, in identifying director nominees and view such characteristics as meaningful factors to consider, but do not have a formal diversity policy. The following table shows an overview of the current composition of our Board:
Board Diversity Matrix (As of March 13, 2024) | ||||||||||||||||
Board Size: |
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Total Number of Directors | 10 | |||||||||||||||
| Female | Male | Non-Binary | Did not Disclose Gender | |||||||||||||
Gender: |
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Directors | 3 | 7 | 0 | 0 | ||||||||||||
Number of Directors Who Identify in Any of the Categories Below: |
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African American or Black | 0 | 0 | 0 | 0 | ||||||||||||
Alaskan Native or Native American | 0 | 0 | 0 | 0 | ||||||||||||
Asian (other than South Asian) | 0 | 0 | 0 | 0 | ||||||||||||
South Asian | 0 | 0 | 0 | 0 | ||||||||||||
Hispanic or Latino | 0 | 1 | 0 | 0 | ||||||||||||
Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 | ||||||||||||
White | 3 | 6 | 0 | 0 | ||||||||||||
Two or More Races or Ethnicities | 0 | 0 | 0 | 0 | ||||||||||||
LGBTQ+ | 1 | |||||||||||||||
Persons with Disabilities | 0 | |||||||||||||||
ROLE OF THE BOARD IN RISK OVERSIGHT
Our Board has an active role, as a whole and also at the committee level, in overseeing the management of our risks. Our Board is responsible for general oversight of risks and regular review of information regarding our risks, including credit risks, liquidity risks and operational risks. The compensation committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements. The audit committee is responsible for overseeing the management of risks relating to accounting matters and financial reporting.reporting, as well as our policies with respect to enterprise risk management, including data security practices and cybersecurity threats. The nominating and corporate governance committee is responsible for overseeing the management of risks associated with the independence of our Board and potential conflicts of interest. The
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compensation committee considers our compensation policies and practices, applicable to all employees, with the input and assistance of management, to determine if their structure or implementation provides incentives to employees to take unnecessary or inappropriate risks that could have a material adverse effect on the Company. The compensation committee has determined that the implementation and structure of the compensation policies and practices do not encourage unnecessary and inappropriate risks that are reasonably likely to have a material adverse effect on the Company. Although each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board is regularly informed through discussions from committee members about such risks.
MEETINGS OF THE BOARD OF DIRECTORS
The Board oversees our business. It establishes overall policies and standards and reviews the performance of management. During the fiscal year ended December 31, 2020,2023, the Board held five meetings following our initial public offering in May 2020.eight meetings. Each Board member attended 75% or more of the aggregate meetings of the Board and of the committees on which they served held during the period for which they were a director or committee member. The Company’s directors are encouraged to attend our annual meetings of stockholders, but we do not currently have a policy relating to director attendance. We did not hold a 2020 annual meetingNine of stockholders because we were not a publicly traded company prior toour 10 directors serving on our Board in May 2020.2023 attended our 2023 Annual Meeting of Stockholders.
Our Independent Directorsnon-employee directors meet from time to time and at least annually in executive session.
INFORMATION REGARDING COMMITTEES OF THE BOARD OF DIRECTORS
TheOur Board has a number of committees that perform certain functions for the Board. The currentthree standing committees of the Board arecommittees: the audit committee, the compensation committee and the nominating and corporate governance committee. Below is a description of each committee of the Board. Each of the committees has authority to engage legal counsel or other experts or consultants, as it deems appropriate to carry out its responsibilities.
Audit Committee
Our audit committee oversees our corporate accounting and financial reporting process and assists our Board in its oversight of (i) our accounting and financial reporting processes, (ii) the integrity of our financial statements, (ii)(iii) our risk assessment and risk management program, (iii)(iv) the qualifications, independence and performance of our independent auditor and (iv)(v) the design and implementation of our internal audit function and internal controls. Our audit committee operates under a written charter and is responsible for, among other things:
appointing, compensating, retaining and overseeing the work of our independent auditor and any other registered public accounting firm engaged for the purpose of preparing or issuing an audit report or related work or performing other audit, review or attest services for us;
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discussing with our independent auditor any audit problems or difficulties and management’s response;
pre-approving all audit and non-audit
| • | pre-approving all audit and non-audit services provided to us by our independent auditor (other than those provided pursuant to appropriate preapproval policies established by the audit committee or exempt from such requirement under the rules of the SEC); |
reviewing and discussing policies with respect to financial risk assessment and risk management;
reviewing and discussing our legal, regulatory, and ethical compliance programs;
reviewing and discussing with management policies and risks related to information systems, data privacy and cybersecurity;
reviewing our internal audit function and overseeing the internal auditor;
reviewing and discussing our annual and quarterly financial statements with management and our independent auditor; and
establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters, and for the confidential and anonymous submission by our employees of concerns regarding questionable accounting or auditing matters.
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Our audit committee currently consists of Mses. Chambers, Lucchese and Szyman and Mr. Pardo,Warner, with Ms. Lucchese serving as chair. Ms. Szyman also served on the audit committee until she joined the compensation committee in July 2023. Our Board has affirmatively determined that Ms. Chambers, Ms. Lucchese and Mr. Warner meet, and during the period of her service in 2023, Ms. Szyman and Mr. Pardo meetmet, the requirements for independence under the current Nasdaq listing standards and SEC rules and regulations. In addition, our Board has determined that Ms. Lucchese isand Ms. Chambers are each an “audit committee financial expert” as defined in Item 407(d) of Regulation S-K promulgated under the Securities Act. Each member of our audit committee is financially literate.
During 2020, theThe audit committee met two times following our initial public offeringheld four meetings in May 2020.2023.
Compensation Committee
Our compensation committee oversees our compensation policies, plans and benefits programs.programs relating to our directors and executive officers. Our compensation committee operates under a written charter and is responsible for, among other things:
reviewing our compensation philosophy and annually reviewing our executive compensation and benefit policies and programs;
reviewing and approving corporate goals and objectives with respect to the compensation of our Chief Executive Officer, evaluating our Chief Executive Officer’s performance in light of these goals and objectives and (either alone or, if directed by the Board, in conjunction with a majority of the independent directors on the Board) setting our Chief Executive Officer’s compensation;
reviewing and setting or making recommendations to our Board regarding the compensation of our other executive officers;
reviewing and making recommendations to our Board regarding director compensation;
| • | reviewing policies and programs concerning perquisite benefits and non-cash or other benefits for our executive officers; |
engaging in risk assessments of our compensation programs;
reviewing and approving or making recommendations to our Board regarding our incentive compensation and equity-based plans and arrangements;
establishing stock ownership guidelines for our executive officers and directors and monitoring compliance;
reviewing and overseeing the administration of our clawback policy and recommending any proposed changes to the Board;
overseeing our human capital management efforts and related disclosures;
reviewing and discussing annually with management our “Compensation Discussion and Analysis” disclosure; and
Appointing,appointing, compensating and overseeing any compensation consultants.
Our compensation committee currently consists of Messrs. Milder, and NielsenMead and Dr. Root, and Ms. Szyman, with Dr. Root serving as chair.chair through the end of March 2024 and Mr. Mead becoming chair effective April 1, 2024. Mr. Nielsen also served on the compensation committee through July 2023. The composition of our compensation committee meets the requirements for independence under the current Nasdaq listing standards and SEC rules and regulations.standards. In making the determination regarding the independence of each member of the compensation committee, the Board considered whether the director has a relationship with the Company that is material to the director’s ability to be independent from management in connection with the duties of a compensation committee member. Each member of thisthe compensation committee is a non-employee director, as defined in Section Rule 16b-3 of under the Exchange Act.
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Compensation Committee Processes and Procedures
The implementation of our compensation philosophy is carried out under the supervision of the compensation committee. The compensation committee charter requires that the compensation committee meet as often as it determines is appropriate to carry out its responsibilities under the charter. The agenda for each meeting is usually developed by the chair of the compensation committee, in consultation with other compensation committee members, management and the compensation committee’s independent advisors. The compensation committee also meets regularly in executive session. Our President and Chief Executive Officer,
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our Chief Financial Officer, and our General Counsel, and our Vice President, Human Resources, in addition to the compensation committee’s independent advisors, may attend portions of the compensation committee meetings for the purpose of providing analysis and information to assist management with their recommendations on various compensation matters. Management does not participate in the executive sessions of the compensation committee.
In 2020,April 2022, the compensation committee engaged Compensia,Frederic W. Cook & Co., Inc. (“Compensia”FW Cook”) as an independent advisor to the compensation committee. CompensiaFW Cook reports directly to the compensation committee, which retains sole authority to direct the work of and engage FW Cook. During 2023, FW Cook conducted an analysis and provided advice on, among other things, the appropriate equity compensation forgranted to our executive officers, including our Chief Executive Officer, peer group selection and Chief Financial Officer. Compensia reported directly to the compensation committee, which retained sole authority to direct the work of and engage Compensia.our clawback policy. As part of its analysis, CompensiaFW Cook collected and analyzed compensation information from a peer group of comparable public companies and reported to the compensation committee. The compensation committee considered this report when making its determinations regarding executive compensation in 2020, as detailed below in the section titled “Executive Compensation.”companies.
The compensation committee, taking into account the various factors prescribed by Nasdaq regarding the independence of compensation consultants, has confirmed thereviewed FW Cook’s independence of Compensia as a compensation advisor and determineddoes not believe that retaining Compensia does not resultFW Cook results in any conflict of interest.
During 2020, theThe compensation committee met one time following our initial public offering in May 2020.held eight meetings during 2023.
Nominating and Corporate Governance Committee
Our nominating and corporate governance committee oversees and assists our Board in overseeing corporate governance matters and in reviewing and recommending nominees for election as directors. Our nominating and corporate governance committee operates under a written charter and is responsible for, among other things:
identifying individuals qualified to become members of our Board, consistent with criteria set forth in the corporate governance guidelines and any additional criteria approved by our Board;
recommending to our Board the nominees for election to our Board at annual meetings of our stockholders;
reviewing Board committee structure and membership;
overseeing programs and practices on ESG topics, including environmental sustainability and climate change, governance and social matters;
overseeing the self-evaluationsevaluation of our Board and management;Committees;
reviewing and reassessing compliance with the code of ethics and conduct and recommend any proposed changes to our Board; and
developing and recommending to our Board any proposed changes to our corporate governance guidelines and principles.
Our nominating and corporate governance committee currently consists of Mr. Nielsen, Dr. Root and Ms. Lucchese, with Mr. Nielsen serving as chair.chair through the end of March 2024 and Ms. Lucchese becoming chair effective April 1, 2024. In connection with his retirement at the Annual Meeting, Mr. Nielsen will no longer serve on our nominating and corporate governance committee. The composition of our nominating governance, and corporate responsibilitygovernance committee meets the requirements for independence under the current Nasdaq listing standards and SEC rules and regulations.
During 2020, the
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The nominating and corporate governance committee met one time since our May 2020 initial public offering.held three meetings in 2023.
Procedures of the Nominating and Corporate Governance Committee
In connection with nominating directors for re-election at the Annual Meeting and periodically throughout the year, the nominating and corporate governance committee considers the composition of the Board and each committee of the Board to evaluate its effectiveness and whether changes should be considered to either the Board or any of the committees. In support of this process, the Board has determined that the Board as a whole must have the right diversity,a mix of characteristics and skills for the optimal functioning of the Board in its oversight of our Company. The Board considers the following factors and qualifications, without limitation:
the appropriate size and theoverall diversity of the Board;
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the needs of the Board with respect to the particular talents and experience of its directors;
the knowledge, skills and experience of nominees, including experience in the industry in which the Company operates, business, finance, management or public service, in light of prevailing business conditions and the knowledge, skills and experience already possessed by other members of the Board;
familiarity with domestic and international business matters;
familiarity and experience with legal and regulatory requirements; and
experience with accounting rules and practices.
Pursuant to the nominating and corporate governance committee charter, the nominating and corporate governance committee periodically reviews the composition of the Board in light of then current challenges and needs of the Board and the Company and determines whether it may be appropriate to add or remove individuals after considering issues of judgment, diversity, skills, background and experience. Although the nominating and corporate governance committee does not have a formal policy regarding diversity on the Board, the nominating and corporate governance committee is sensitive to the importance of nominating persons with different perspectives, backgrounds and experience to enhance the deliberation and decision-making processes of the Board. The nominating and corporate governance committee also considers applicable laws and regulations, such as recently enacted legislation in California which requires exchange-listed companies headquartered in California with boards with six or more members to have a minimum of three women directors and at least one director from an “underrepresented community” by December 31, 2021. We have two women directors and the nominating and corporate governance committee has commenced the process of identifying potential additional qualified Board members.regulations.
Once the nominating and corporate governance committee and the Board determine that it is appropriate to add a new director, either asto fill a replacementvacancy or as a new position, the nominating and corporate governance committee uses a flexible set of procedures in selecting individual director candidates. This flexibility allows the nominating and corporate governance committee to adjust the process to best satisfy the objectives it is attempting to accomplish in any director search. The first step in the general process is to identify the type of candidate the nominating and corporate governance committee may desire for a particular opening, including establishing the specific target skill areas, experiences and backgrounds that are to be the focus of a director search. The nominating and corporate governance committee may consider candidates recommended by management, by members of the nominating and corporate governance committee, by the Board, by stockholders or by a third party it may engage to conduct a search for possible candidates.
Once candidates are identified, the nominating and corporate governance committee conducts an evaluation of qualified candidates. The evaluation generally includes interviews and background and reference checks. There is no difference in the evaluation process of a candidate recommended by a stockholder as compared to the evaluation process of a candidate identified by any of the other means described above. In identifying and evaluating potential nominees to serve as directors, the nominating and corporate governance committee will examine each nominee on a case-by-case basis regardless of who recommended the nominee and take into account all factors it considers appropriate.
If the nominating and corporate governance committee determines that a candidate should be nominated as a candidate for election to the Board, the candidate’s nomination is then recommended to the Board, and the directors may in turn conduct their own review to the extent they deem appropriate. When the Board has agreed
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upon a candidate, such candidate is recommended to the stockholders for election at an annual meeting of stockholders or appointed as a director by a vote of the Board as appropriate.
All of the current Class I directors have been recommended by the nominating and corporate governance committee to the Board for election or reelection, as applicable, as our directors at the Annual Meeting, and the Board has approved such recommendations.
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Stockholders who wish to recommend individuals to the nominating and corporate governance committee for consideration as potential director candidates may submit the names of the recommended individuals, together with appropriate biographical information and background materials, to the nominating and corporate governance committee, c/o Secretary, 9 Parker,6001 Oak Canyon, Suite 100, Irvine, CA 92618. In the event there is a vacancy, and assumingAssuming that appropriate biographical and background material has been provided on a timely basis, the nominating and corporate governance committee will evaluate stockholder-recommended candidates by following substantially the same process, and applying substantially the same criteria, as it follows for candidates submitted by others.
STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS
Our relationship with our stockholders is an important part of our corporate governance program. Engaging with our stockholders helps us to understand how they view us, to set goals and expectations for our performance, and to identify emerging issues that may affect our strategies, corporate governance, compensation practices or other aspects of our operations. Our stockholder and investor outreach includes investor road shows, analyst meetings, and investor conferences and meetings. We also communicate with stockholders and other stakeholders through various media, including our annual report and SEC filings, proxy statement, news releases and our website. Our conference calls for quarterly earnings releases are open to all. These calls are available in real time and as archived webcasts on our website for a period of time. We also provide a question-and-answer session at our Annual Meeting.
The Board has adopted a process for stockholders and others to send communications to the Board or any director. All such communications should be sent by mail addressed to the Board or any particular director at 9 Parker,6001 Oak Canyon, Suite 100, Irvine, CA 92618, c/o Angela Ahmad, General Counsel & Secretary. All appropriate communications received by Ms. Ahmad will be sent directly to the Board or to the particular director.
CODE OF ETHICS AND CONDUCT
Our Board of Directors has adopted a code of ethics and conduct that applies to all of our employees, officers and directors, including our Chief Executive Officer, Chief Financial Officer and other executive and senior financial officers. The full text of our code of ethics and conduct is available in the Governance section of the Investor Relations section of our website at www.inarimedical.com.www.inarimedical.com. Information on or accessible through our website is not incorporated by reference in this Proxy Statement. We intend to disclose future amendments to our code of ethics and conduct, or any waivers of such code, on our website or in public filings.filings as required by applicable Nasdaq listing standards and SEC rules.
ANTI-HEDGING AND ANTI-PLEDGING POLICY
The Board has approved an Insider Trading Compliance Policy for our directors and employees. Under this policy, all of our directors and employees are prohibited from engaging in short-sales, transactions in put or call options, hedging transactions or other inherently speculative transactions in Inari stock or pledging Inari stock in any circumstance, including by purchasing Inari stock on margin or holding Inari stock in a margin account. Our employees may be permitted to contribute their Inari stock to a private exchange fund for diversification purposes following review and approval by our General Counsel or Chief Financial Officer.21
DIRECTOR COMPENSATION
OurThe Compensation Committee of the Board reviews and makes recommendations to the full Board on compensation provided to non-employee directors play a critical role in guidingannually, as required by its charter. For 2023, our strategic direction and overseeing the management of Inari. The many responsibilities and risks and the substantial time commitment of being a director require that we provide adequate compensation commensurate with our directors’ workload and opportunity costs. Independent Directors receive a combination of annual cash retainers and annual grants of options or restricted stock units.
In connection with our initial public offering in May 2020, we implemented a non-employee director compensation program orconsisted of the Directorfollowing components:
Cash Compensation Program, pursuant. During 2023, we paid an annual retainer to which our non-employee directors are eligibleof $50,000. We also paid an additional $48,000 retainer to receive annual cashthe Chairman of the Board. Each non-employee director received additional retainers and equity awards infor service on the form of options or restricted stock units.committees, as follows:
Committee | Chair Retainer | Membership Retainer | ||||||
Audit | $ | 20,000 | $ | 10,000 | ||||
Compensation | $ | 15,000 | $ | 7,500 | ||||
Nominating and Corporate Governance | $ | 10,000 | $ | 5,000 | ||||
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Cash Compensation. The following table is a summary of the annual cash retainers paid to the Independent Directors in 2020 under the Director Compensation Program; cash retainers were pro-rated to reflect service following our May 2020 initial public offering. All cash compensation payable to the directors designated by or affiliated with our stockholders, Coöperatieve Gilde Healthcare IV U.A., U.S. Venture Partners X, L.P., USVP X Affiliates, L.P., Versant Venture Capital IV, L.P. or Versant Side Fund IV, L.P. is paid to Coöperatieve Gilde Healthcare IV U.A., U.S. Venture Partners X, L.P., USVP X Affiliates, L.P., Versant Venture Capital IV, L.P. or Versant Side Fund IV, L.P., as applicable.
Position | Annual Cash Retainer | |||
Board Member | $ | 40,000 | ||
Committee Chair | ||||
Audit | $ | 16,000 | ||
Compensation | $ | 13,500 | ||
Nominating and Corporate Governance | $ | 8,300 | ||
Committee Member | ||||
Audit | $ | 8,000 | ||
Compensation | $ | 6,000 | ||
Nominating and Corporate Governance | $ | 4,300 | ||
Board Chair | $ | 35,000 | ||
Equity Compensation. Our non-employee directors arewere also eligible to receive the following equity compensation:compensation during 2023 as described below.
Initial Grant: Each . Upon appointment to the Board, a non-employee director who is initially elected or appointed to serve on the Board automatically shall be granted a restricted stock unit (RSU) award (“RSU”) with a grant date value of approximately $170,000$160,000 on the date on which such director is appointed or elected to serve on the Board and shall vestwhich vests in substantially equal installments on each of the first, second and third anniversary of the applicable grant date, subject to such director’s continued service through the applicable vesting date.
Annual Grant:Grant. A non-employee director who is serving on the Board as of the date of the annual meeting of the Company’s stockholders each calendar year beginning with calendar year 2021 shall be granted, on such annual meeting date, RSUs with a grant date value of approximately $135,000,$160,000, which shall vest in full on the earlier to occur of (i) the one-year anniversary of the applicable grant date and (ii) the date of the next annual meeting following the grant date, subject to the director’s continued service through the applicable vesting date.
The number of shares of our common stock subject to an initial grant or annual grant will be determined by dividing the grant date value of the initial grant or annual grant (as applicable) by the trailing 30-day average closing price for our common stock through and including the date prior to the applicable grant date.
Each such award will vest in full upon a change in control of our company (as defined in the Company’s 2020 Plan)Incentive Award Plan (the “2020 Plan”)).
EachIn 2023, the Compensation Committee reviewed the compensation of our the non-employee directors has received an equity awardand considered information provided by FW Cook with an approximate grant value of $170,000. Each of Mses. Luccheserespect to peer group benchmarking. Following the review, the Compensation Committee recommended, and Szyman received such award in the form of stock options in November 2019 when each joinedOctober 2023, the Board and each of Messrs. Milder, Nielsen and Pardo and Dr. Root received such award inapproved the formfollowing changes to director compensation to better align with the median pay for our peer group: (i) an increase to the annual cash retainer from $50,000 to $55,000, (ii) an increase to the initial grant of RSUs upon joining the Board from $160,000 to $175,000 and pro-ration of the initial RSU grant for any director joining our Board in May 2020 in connection withbetween annual meetings, and (iii) an increase to the annual RSU grant from $160,000 to $175,000. The amendments to our initial public offering, with the numberNon-Employee Director Compensation Program became effective as of RSUs awarded based on the intended grant value of $170,000 divided by our initial offering price of $19.00 per share.January 1, 2024.
Compensation under our Director Compensation Program is subject to the annual limits on non-employee director compensation set forth in the 2020 Plan.
2020
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2023 Director Compensation Table
The following table sets forth information for the year ended December 31, 2020, regardingconcerning the compensation paid or awarded to earned by or paid to our non-employee directors who served on our Board of Directors during 2020. Mr. Hoffman,each individual who served as our President and Chief Executive Officera non-employee director at any time during the year ended
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December 31, 2020, and continues to serve2023. We also reimburse directors for expenses incurred in that capacity, does not receive additional compensation for hisconnection with their service as a director, and therefore is not included in the Director Compensation table below.directors, including travel expenses for meetings. All compensation paid to Mr. HoffmanHykes, our Chief Executive Officer, is reported below in the “Summary Compensation Table.” Mr. Hykes did not receive additional compensation for his services as a director during 2023.
Director Compensation in 20202023
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (1)(2) | Total ($) | Fees Earned or Paid in Cash ($) (1) | Stock Awards ($) (2) | Total ($) | ||||||||||||||||||
Current Directors | ||||||||||||||||||||||||
Rebecca Chambers | 60,000 | 160,928 | 220,928 | |||||||||||||||||||||
William Hoffman | 37,500 | 160,928 | 198,428 | |||||||||||||||||||||
Cynthia Lucchese | 21,510 | — | 21,510 | 75,000 | 160,928 | 235,928 | ||||||||||||||||||
Dana G. Mead, Jr. | 57,500 | 160,968 | 218,428 | |||||||||||||||||||||
Donald Milder | 28,894 | 403,510 | 432,404 | 105,500 | 160,968 | 266,428 | ||||||||||||||||||
Kirk Nielsen | 19,370 | 403,510 | 422,880 | 66,134 | 160,968 | 227,062 | ||||||||||||||||||
Geoff Pardo | 17,123 | 403,510 | 420,632 | |||||||||||||||||||||
Jonathan Root, M.D. | 20,618 | 403,510 | 424,128 | 70,000 | 160,968 | 230,928 | ||||||||||||||||||
Catherine Szyman | 17,123 | — | 17,123 | 59,544 | 160,968 | 220,472 | ||||||||||||||||||
Former Directors | ||||||||||||||||||||||||
Brian Cox(3) | — | — | — | |||||||||||||||||||||
Robert Rosenbluth, Ph.D.(3) | — | — | — | |||||||||||||||||||||
Robert Warner | 60,000 | 160,968 | 220,928 | |||||||||||||||||||||
| (1) | Reflects cash compensation paid to each director in 2023 for service on the Board and one or more Committees of the Board. |
| (2) | Consists of |
The table below sets forth those non-employee directors for the year ended December 31, 2023 who had RSU or stock options outstanding as of December 31, 2023, and the number outstanding as of that date.
Name | Outstanding Stock Awards (#) | Outstanding Option Awards (#) | ||||||
Current Directors | ||||||||
Rebecca Chambers | 3,062 | — | ||||||
William Hoffman | 33,680 | (1) | ||||||
Cynthia Lucchese | 2,412 | 49,179 | ||||||
Donald Milder | 2,412 | — | ||||||
Dana G. Mead, Jr. | 3,142 | — | ||||||
Kirk Nielsen | 2,412 | — | ||||||
Jonathan Root, M.D. | 2,412 | — | ||||||
Catherine Szyman | 2,412 | 49,179 | ||||||
Robert Warner | 4,539 | — | ||||||
| (1) |
|
|
1823
PROPOSAL NO. 2: 2—RATIFICATION OF THE SELECTIONAPPOINTMENT OF THE INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The audit committee has selectedappointed BDO USA, LLPP.C. (“BDO”) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021,2024, and the Board is submitting this selectionappointment to our stockholders for ratification at the Annual Meeting. BDO has served as our independent registered public accounting firm since May 2019. Representatives of BDO plan to attend the Annual Meeting and will be available to answer appropriate questions from stockholders. They will have the opportunity to make a statement if they desire to do so.
Neither our Bylaws nor other governing documents or law require stockholder ratification of the selectionappointment of BDO as the Company’s independent registered public accounting firm. However, the Board is submitting the selectionappointment of BDO to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection,appointment, the audit committee will reconsider whether to retain BDO. Even if the selectionappointment is ratified, the audit committee in its discretion may direct the appointment of different independent registered public accounting firm at any time during the year if the audit committee determines that such a change would be in the best interest of the Company and its stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE RATIFICATION OF BDO AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2021.2024
1924
Principal Accountant Fees and Services
The following is a summary of the fees and services provided by BDO to the Company for fiscal years 20202022 and 2019:2023:
| Fiscal Year Ended December 31, | ||||||||
Description of Services Provided by BDO | 2020 | 2019 | ||||||
Audit Fees(1) | $ | 611,707 | $ | 490,843 | ||||
Audit Related Fees | $ | — | $ | — | ||||
Tax Fees | $ | — | $ | — | ||||
All Other Fees | $ | — | $ | — | ||||
TOTAL | $ | 611,707 | $ | 490,843 | ||||
| Fiscal Year Ended December 31, | ||||||||
Description of Services | 2023 | 2022 | ||||||
Audit Fees (1) | $ | 1,263,307 | $ | 793,239 | ||||
Audit Related Fees (2) | $ | 39,392 | $ | 24,150 | ||||
Tax Fees | $ | — | $ | — | ||||
All Other Fees(3) | $ | — | $ | — | ||||
|
|
|
| |||||
TOTAL | $ | 1,302,699 | $ | 817,389 | ||||
| (1) | Audit fees for BDO for |
| (2) | Audit related fees for 2023 were for services rendered for the |
The audit committee or the chair of the audit committee pre-approves the scope of the audit, audit-related and tax services provided by our independent registered public accounting firm, as well as all associated fees and terms, pursuant to pre-approval policies and procedures established by the audit committee. The audit committee evaluates the independent registered public accounting firm’s qualifications, performance and independence, and presents its conclusions to the full Board on at least an annual basis.
All of the services provided by BDO since our initial public offering in May 2020, and fees for such services, were pre-approved by the audit committee in accordance with these standards.
Report of the Audit Committee of the Board of Directors
The audit committee reviews the Company’s financial reporting process on behalf of the Board. Management has the primary responsibility for the preparation and integrity of the consolidated financial statements and the reporting process, including establishing and monitoring the system of internal financial controls. In this context, during fiscal year 2020,2023, the audit committee met and held discussions with management and BDO, the Company’s independent registered public accounting firm. Management has represented to the audit committee that the Company’s consolidated financial statements for the fiscal year ended December 31, 2020,2023 were prepared in accordance with accounting principles generally accepted in the United States of America, and the audit committee has reviewed and discussed the audited consolidated financial statements of the Company with management of the Company and with BDO.
In addition, the audit committee has reviewed and discussed with BDO: (i) the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (the “PCAOB”), and the Securities and Exchange Commission (the “SEC”); and (ii) the written disclosures and the letter received from BDO required by applicable requirements of PCAOB regarding BDO’s communications with the Audit Committeeaudit committee concerning independence and the independence of BDO from the Company and its management.
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Based on thethis review and discussion, referred to above, the audit committee recommended to the Board that the audited consolidated financial statements be included in the Company’s Annual Reportannual report on Form 10-K for the fiscal year ended December 31, 2020 for filing with the SEC.2023.
Respectfully submitted by the members of the audit committee of the Board of Directors:Directors as of February 28, 2024, the date as of which the 10-K was filed:
Cynthia Lucchese, Chair
Geoff PardoRebecca Chambers
Catherine SzymanRobert Warner
OTHER INFORMATION RELATED TO INARI, THE DIRECTORS AND
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PROPOSAL 3—ADVISORY VOTE ON COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
Pursuant to Section 14A of the Exchange Act, we are providing our stockholders with the opportunity to cast a non-binding advisory vote to approve the compensation of our named executive officers, or NEOs, as disclosed in this proxy statement. This proposal, commonly known as “say-on-pay” proposal, is not intended to address any specific item or compensation, but rather the overall compensation of the Company’s NEOs and the philosophy, policies and practices described in this proxy statement.
Security OwnershipThe Compensation of Certain Beneficial Ownersthe Company’s NEOs subject to this advisory vote is disclosed in this proxy statement under the Section entitled “Executive Compensation—Compensation Discussion and ManagementAnalysis,” the compensation tables and the related narrative disclosure contained in this proxy statement. As described in detail in these disclosures, the Company’s compensation philosophy is to maintain a straight-forward executive compensation program that fosters an ownership mentality by emphasizing the long-term equity compensation coupled with cash compensation in the form of a base salary and incentive cash program that meets current needs. Please read the Compensation Discussion and Analysis and the compensation tables that follow it for additional details about the Company’s executive compensation programs, including information about the fiscal 2023 compensation of the Company’s NEOs.
Accordingly, the Board requests your advisory vote to approve the following resolution at the Annual Meeting:
“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K (which disclosure includes the Compensation Discussion and Analysis, the compensation tables and the narrative discussion that accompanies the compensation tables), is hereby APPROVED.”
This proposal to approve the compensation paid to our NEOs is an advisory vote only and will not be binding on us, the Board, or our compensation committee. However, the Board and the compensation committee value the opinions expressed by stockholders in their votes on this Proposal and will consider the outcome of the vote when considering future executive compensation arrangements. Our current policy is to provide our stockholders with an opportunity to approve the compensation of our NEOs each year at the annual meeting. It is expected that the next such vote will occur at the 2025 annual meeting.
THE BOARD OF DIRECTORS RECOMMEND A VOTE IN FAVOR, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to us regarding beneficial ownership of our common stock as of March 31, 2021 by:
by each person whom we knowstockholder known by the Company to own beneficially more than 5% of ourthe Company’s common stock;
eachstock as of our directors, nominees and named executive officers individually; andFebruary 28, 2024.
all of our directors and executive officers as a group.
In accordance with the rules of the SEC, beneficial ownership includes voting or investment power with respect to securities and includes the shares issuable pursuant to stock options that are exercisable, or pursuant to vesting of RSUs, within 60 days of March 31, 2021.following February 28, 2024. In accordance with SEC rules, shares issuable pursuant to stock options and RSUs are deemed outstanding for computing the percentage of the person holding such equity awards but are not outstanding for computing the percentage of any other person. The percentage ownership of our common stock is based on 49,582,58557,960,555 shares of our common stock issued and outstanding as of March 31, 2021.February 28, 2024.
Unless otherwise indicated, the mailing address of each of the stockholders below is c/o Inari Medical, Inc., 9 Parker,6001 Oak Canyon, Suite 100, Irvine, CA 92618. To our knowledge, except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock.
| Shares Beneficially Owned | ||||||||
Name of Beneficial Owner | Number | Percent | ||||||
Greater than 5% Stockholders | ||||||||
Coöperatieve Gilde Healthcare IV U.A. (1) | 4,491,679 | 9.1 | % | |||||
Entities affiliated with U.S. Venture Partners (2) | 3,389,512 | 6.8 | % | |||||
CVF, LLC (3) | 2,691,665 | 5.4 | % | |||||
Directors and Named Executive Officers | ||||||||
Donald Milder (4) | 5,248,437 | 10.6 | % | |||||
William Hoffman(5) | 1,594,709 | 3.2 | % | |||||
Cynthia Lucchese(6) | 46,733 | * | ||||||
Kirk Nielsen(7) | 49,302 | * | ||||||
Geoff Pardo (1)(7) | �� | 2,982 | * | |||||
Jonathan Root, M.D. (2) | 3,820,386 | 7.7 | % | |||||
Catherine Szyman(6) | 46,733 | * | ||||||
Mitchell Hill(8) | 180,170 | * | ||||||
Andrew Hykes(9) | 374,975 | * | ||||||
Thomas Tu, M.D.(10) | 135,900 | * | ||||||
All current executive officers and directors as a group (10 persons)(11) | 11,500,327 | 23.2 | % | |||||
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| Shares Beneficially Owned | ||||||||
Name of Beneficial Owner | Number | Percent | ||||||
Greater than 5% Stockholders | ||||||||
BlackRock, Inc. (1) | 6,696,598 | 11.6 | % | |||||
The Vanguard Group (2) | 5,038,292 | 8.7 | % | |||||
Wellington Management (3) | 4,563,325 | 7.9 | % | |||||
Directors and Named Executive Officers | ||||||||
Donald Milder (4) | 3,086,714 | 5.3 | % | |||||
William Hoffman (5) | 1,017,752 | 1.8 | % | |||||
Rebecca Chambers (6) | 6,132 | * | ||||||
Cynthia Lucchese (7) | 84,022 | * | ||||||
Dana G. Mead, Jr. (6) | 6,292 | * | ||||||
Kirk Nielsen (6) | 61,479 | * | ||||||
Jonathan Root, M.D. (6) | 537,023 | * | ||||||
Catherine Szyman (7) | 68,022 | * | ||||||
Robert K. Warner (6) | 5,896 | * | ||||||
Mitchell Hill (8) | 232,254 | * | ||||||
Andrew Hykes (9) | 593,316 | 1 | % | |||||
Thomas Tu, M.D. (10) | 449,337 | * | ||||||
All current executive officers and directors as a group (12 persons) (11) | 6,148,239 | 10.6 | % | |||||
| * | Represents less than 1% of Inari’s outstanding common stock. |
| (1) | Based solely on a |
| (2) | Based solely on a |
| (3) | Based solely on a Schedule 13G/A filed with the SEC on February 8, 2024, by Wellington Management Group LLP, Wellington Group Holdings LLP, Wellington Investment Advisors Holdings LLP and |
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| Wellington Management Company LLP. Wellington Management Group LLP, Wellington Group Holdings LLP and Wellington Investment Advisors Holdings LLP each report shared voting power with respect to 4,072,713 shares and shared dispositive power with respect to 4,563,325 shares. Wellington Management Company LLP reports shared voting power with respect to 4,049,170 shares and shared dispositive power with respect to 4,428,003 shares. The securities as to which the Schedule was filed by Wellington Management Group LLP, as parent holding company of |
| (4) | Includes 2,412 shares of common stock subject to RSUs that vest within 60 days following |
|
|
| (5) | Includes |
| (6) | Includes |
|
Includes |
| (8) | Includes 100,678 shares of common stock subject to options and 4,177 shares of common stock subject to RSUs that are exercisable or vest within 60 days following |
| (9) | Includes |
| (10) | Includes |
| (11) | Includes |
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Information about our Executive Officers
The following table sets forth certain information concerning our executive officers as of the date of this Proxy Statement:
Name | Age | Position | |||||
|
| ||||||
|
| ||||||
Andrew Hykes | 51 | President, Chief | |||||
Mitchell Hill | 65 | Chief Financial Officer | |||||
Thomas Tu, M.D. | 51 | Chief Medical Officer | |||||
There are no family relationships between any of our directors and any of our executive officers.
Mr. Hoffman’sHykes’ biography can be found above with the biographies of the other members of the Board. Biographies for our other executive officers are below.
Mitchell Hill
Chief Financial Officer since 2019 Age: 65 | Mitchell Hillhas served as our Chief Financial Officer since March 2019. From June 2018 to February 2019, Mr. Hill served as the Chief Executive Officer and as a member of the board of directors of Flow Lighting Technologies, Inc., a private company specializing in cloud-based software. From August 2017 to June 2018, Mr. Hill served as a member of the board of directors of LIVMOR, Inc., a private company focusing on digital health solutions for remote patient monitoring. From September 2015 to May 2018, Mr. Hill served as a member of the board of directors and audit committee of Ominto, Inc., a private company with global operations in the e-commerce, marketing and entertainment industries. From March 2013 to March 2015, Mr. Hill was the Executive Vice President and Chief Financial Officer of Alphaeon Corporation, a private company serving healthcare providers in the self-pay medical field. Prior to 2013, Mr. Hill served as Chief Financial Officer at a number of companies, including Cameron Health, Inc., Visiogen Inc., Insight Health Services Holdings Corp., BMS Reimbursement Management, Buy.com, Inc. and Walt Disney Imagineering and Disney Development Co. Mr. Hill received his B.S. in Business Accounting from Brigham Young University and an M.B.A. from Harvard Business School. |
Chief Medical Officer since 2019 Age: 51 | Thomas Tu, M.D. has served as our Chief Medical Officer since July 2019. From June 2003 to June 2019, Dr. Tu was in clinical practice at Baptist Health Hospital in Louisville, Kentucky, where he also served as director of the cardiac catheterization laboratory. Dr. Tu previously served as the chairs of the Political Action Committee and Emerging Leadership Mentorship Programs of the Society for Cardiovascular Angiography & Interventions. Dr. Tu completed his training in internal medicine, cardiology, interventional cardiology, peripheral interventions at Massachusetts General Hospital and Beth Israel Deaconess Medical Center in Boston, Massachusetts. Dr. Tu is board-certified in internal medicine, cardiovascular disease, and interventional cardiology. Dr. Tu received his B.A. from the University of Virginia and his M.D. from Harvard Medical School. |
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EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
EXECUTIVE SUMMARY
This Compensation Discussion and Analysis is intended to assist our stockholders in their efforts to understand our executive compensation program by providing an overview of our executive compensation-related policies, practices, and decisions for 2023. It also explains how we determined the material elements of compensation for our Chief Executive Officer, our Chief Financial Officer, since March 2019. From June 2018and our only other executive officer (other than our CEO and CFO) in 2023, and whom we refer to February 2019, Mr. Hill served as the Chief Executive Officer and as a member of the board of directors of Flow Lighting Technologies, Inc., a private company specializing in cloud-based software. From August 2017 to June 2018, Mr. Hill served as a member of the board of directors of LIVMOR, Inc., a private company focusing on digital health solutions for remote patient monitoring. From September 2015 to May 2018, Mr. Hill served as a member of the board of directors and audit committee of Ominto, Inc., a private company with global operations in the e-commerce, marketing and entertainment industries. From March 2013 to March 2015, Mr. Hill was the Executive Vice President and Chief Financial Officer of Alphaeon Corporation, a private company serving healthcare providers in the self-pay medical field. Prior to 2015, Mr. Hill served as Chief Financial Officer at a number of companies, including Cameron Health, Inc., Visiogen Inc., Insight Health Services Holdings Corp., BMS Reimbursement Management, Buy.com, Inc. and Walt Disney Imagineering and Disney Development Co. Mr. Hill received his B.S. in Business Accounting from Brigham Young University and an M.B.A. from Harvard Business School.
Andrew Hykes has served as our Chief Operating Officer since October 2020 and previously as our Chief Commercial Officer since September 2017. From November 2012 to January 2017, Mr. Hykes was the Vice President of Commercial Operations of Sequent Medical Inc.,“named executive officers” or Sequent Medical, a private company focused on catheter-based neurovascular therapies that was acquired by Terumo Corporation in July 2016. Prior to this, Mr. Hykes worked for Medtronic PLC, a public medical device company, from August 2002 to October 2012, where he held several positions including: Vice President of Marketing, Vice President of Clinical and Regulatory Affairs and Director of Investor Relations. From 1995 to 2000, Mr. Hykes worked in healthcare banking for ABN AMRO Bank. Mr. Hykes received his B.B.A. from the University of Wisconsin Madison and an M.B.A. from Harvard Business School.
Thomas Tu, M.D. has served as our Chief Medical Officer since July 2019. From June 2003 to June 2019, Dr. Tu was in clinical practice at Baptist Health Hospital in Louisville, Kentucky, where he also served as director of the cardiac catheterization laboratory. Since December 2010, Dr. Tu has served as the Chief Executive Officer and President of World Health Initiative, a non-profit organization that provides medical care and educational programs to hospitals in Vietnam and China. Dr. Tu“NEOs.” The following is a fellow of the Society for Cardiovascular Angiography & Interventions and previously served as the chairs of the society’s political action committee and Emerging Leader Mentorship program. Dr. Tu completed his training in internal medicine, cardiology, interventional cardiology, peripheral interventions at Massachusetts General Hospital and Beth Israel Deaconess Medical Center in Boston, Massachusetts. Dr. Tu is board-certified in internal medicine, cardiovascular disease, and interventional cardiology. Dr. Tu received his B.A. from the University of Virginia and his M.D. from Harvard Medical School.
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Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than 10% of a registered classlist of our equity securities to file reports of ownership and reports of changes in the ownership with the SEC.
To the best of our knowledge and based solely on a review of the copies of such reports filed with the SEC,NEOs during the fiscal year ended December 31, 2020, all Section 16(a) filing requirements applicable to our officers, directors and greater than ten percent beneficial owners were complied with on a timely basis, except for a late Form 5 filing by one director relating to a gift of shares in December 2020.
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This section discusses the material components of the executive compensation program for our executive officers who are named in the “Summary Compensation Table” below. In 2020, our named executive officers (“NEOs”) and their positions were as follows:2023:
William Hoffman, ourAndrew Hykes, President and Chief Executive Officer;Officer,
Andrew Hykes, ourMitchell Hill, Chief Operating Officer; andFinancial Officer,
Thomas Tu, M.D., our Chief Medical Officer.
2023 Key Business Highlights
Patients first. No small plans. Take care of each other. These are the guiding principles that form the ethos of Inari Medical. We are committed to improving lives in extraordinary ways by creating innovative solutions for both unmet and underserved health needs. In addition to our purpose-built solutions, we leverage our capabilities in education, clinical research, and program development to improve patient outcomes. We are passionate about our mission to establish our treatments as the standard of care for venous thromboembolism and our other emerging therapies.
2023 was another exceptional year for our patients, employees, and company. We treated a record number of patients and delivered substantial growth in revenue while continuing to make significant investments in our core products and new disease states. In addition to our strong financial performance in the VTE business, we announced and completed our first acquisition, adding LimFlow to the Inari family of products and establishing a new growth driver and opportunity to treat no option chronic limb-threatening ischemia (CLTI) patients—a significant unmet need.
Key financial and operating highlights for 2023 include the following:
We reported revenue of $493.6 million for the year ended December 31, 2023, representing a ~29% increase over the prior year. Most of our growth came from VTE procedure volume, with additional contributions from our emerging therapies and international business.
During the year, we surpassed 100,000 VTE patients treated since we began commercializing in 2018.
We launched six new products—three VTE toolkit enhancements and three incremental revenue opportunities.
We made significant progress in our randomized control trials across both pulmonary embolism (PE) and deep vein thrombosis (DVT).
In PE, we nearly completed enrollment in our first randomized control trial, PEERLESS, a prospective, multicenter trial that is evaluating FlowTriever’s performance in patients with intermediate risk PE compared to patients treated with catheter-directed thrombolysis.
| • | We also announced the enrollment of the first patient in PEERLESS II, a prospective, global, multi-center randomized controlled trial compares the outcomes of intermediate-risk acute PE patients treated with the FlowTriever® System plus anticoagulation therapy against those treated with traditional anticoagulation therapy alone. |
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In DVT, we launched DEFIANCE, our first randomized control trial evaluating ClotTriever’s performance in patients with moderate to severe iliofemoral DVT.
We continued to expand into international markets, including Asia Pacific, Canada, Europe and Latin America, which in the aggregate accounted for ~5% of 2023 revenue.
We continued to advance customers in VTE Excellence, our programmatic approach to driving adoption of thrombectomy across our approximately 1,600 U.S. hospital customers.
2023 Executive Compensation Highlights
Consistent with our performance and compensation philosophy as detailed below, the Compensation Committee (the Committee) took the following key actions with respect to the total compensation of our NEOs for and during 2023:
| • | Base Salary—approved base salary increases for our NEOs that position them competitively with similarly situated executive officers in our peer group. |
| • | Annual Bonus—approved a cash-based incentive plan with pre-set, objective financial and operational performance measures. The 2023 payout was 118% of target. |
| • | Equity Incentives—approved awards of restricted stock units and stock options to provide a competitive total compensation opportunity, align executive and stockholder interests, and motivate and retain our NEOs. |
Executive Compensation Philosophy
Our compensation programs are designed to:
Align the interests of our executives with business priorities and stockholders.
Attract, retain, engage, and motivate talented executive officers
Remain market competitive and internally equitable
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Executive Compensation Policies and Practices
We endeavor to maintain sound executive compensation policies and practices, including compensation-related corporate governance standards, consistent with our executive compensation philosophy. During 2023, the following executive compensation policies and practices were in place to drive performance and either prohibit or minimize behaviors that we do not believe serve our stockholders’ long-term interests:
What We Do ✓ | What We Don’t Do X | |
| Maintain an Independent Compensation Committee | No guaranteed compensation | |
| Retain an Independent Compensation Consultant | No excise tax payments | |
| Annual executive compensation review | No special retirement, health or welfare benefits | |
| Emphasize long-term equity compensation | No backdating or repricing of stock options | |
| Require minimum share ownership for our Directors and NEOs | No hedging or pledging of Inari securities | |
| Clawback policy that complies with applicable SEC and Nasdaq rules | ||
| Double-trigger change-in-control benefits | ||
| Offer Limited Perquisites | ||
PROCESS FOR DETERMINATION OF COMPENSATION
Role of Compensation Committee
The Committee establishes our compensation philosophy, program design and structure, and other elements of executive compensation, and reviews and approves the compensation of the NEOs. The Committee solicits input from and relies on advice from an independent outside compensation consultant.
Role of the Chief Executive Officer
The Committee works with our CEO and the independent compensation consultant to set compensation levels for the executive officers reporting into the CEO. As part of this process, our CEO evaluates the executive officers and determines and delivers his recommendations to the Committee. The Committee gives significant weight to the recommendations of the CEO but makes the ultimate determination regarding the compensation of the executive officers.
Our CEO does not make recommendations to the Committee about his own compensation.
Role of Compensation Consultant
The Committee has engaged FW Cook, an “emerging growth company”independent outside compensation consulting firm to advise the Committee on all items related to executive compensation. FW Cook conducts an annual competitive market analysis of total compensation of our NEOs, provides compensation trends and information on regulatory developments, counsels the Committee on program design, specific compensation decisions related to our CEO and other senior officers. Additionally, FW Cook provides a review of Board of Director compensation.
Consistent with Nasdaq listing standards, the Committee reviews and confirms the independence of its outside consultants on an annual basis. The Committee assessed the independence of FW Cook considering each of the factors set forth by the SEC and Nasdaq with respect to an adviser’s independence. The Committee determined that FW Cook was independent within the meaning of the JOBS Act, we have opted to comply withCommittee’s charter and the reducedNasdaq rules, and the work of FW Cook for the Committee has not raised any conflicts of interest.
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Compensation Peer Group and Peer Selection Process
The Committee considers relevant market data when determining executive compensation disclosure requirements availableprograms and pay levels. To enable our ability to emerging growthbenchmark competitive compensation levels and practices the Committee establishes a compensation peer group. The Committee selected the companies pursuantthat make up the Peer Group after discussion with FW Cook. The peer group selection approach starts with all publicly-traded companies in the S&P’s Capital IQ database, which are then limited in the Global Industry Classification Standards industries to the JOBS Act, which require compensation disclosureHealth Care Equipment and Services and Life Sciences Tools and Services. The following criteria is then evaluated:
Company size – revenue, market capitalization, and number of employees
Industry and global reach
Cost structures and business models
FW Cook recommended the following changes from Inari’s peer group in 2022:
Add | Remove | |
| Artivion | Adaptive Biotechnologies | |
| LivaNova | NanoString Technologies | |
| NovoCure | ||
The following 17 companies were included in our peer group for 2023 and informed decisions related to our principal executive officer and board of director compensation programs.
Peer Group | ||||
| Abiomed | AngioDynamics | Artivion | ||
| AtriCure | Axonics | Cardiovascular Systems | ||
| Glaukos | Inspire Medical Systems | iRhythm Technologies | ||
| LivaNova | Nevro | NovoCure | ||
| Penumbra | ShockWave Medical | Silk Road Medical | ||
| STAAR Surgical Company | Tandem Diabetes Care | |||
The Committee reviewed our peer group in July 2023 with the two most highly compensatedsupport of FW Cook to inform our 2024 compensation program. The Committee approved the removal of Abiomed, Artivion, and Cardiovascular Systems and the addition of Alphatec Holdings, CONMED Corp, Haemonetics Corp, and Integra LifeSciences to focus on companies of similar size and scale and with similar business models while maintaining a robust sample. The Committee retained the other 14 companies above.
Stockholder Engagement
At our 2023 annual meeting of stockholders, over 92% of the votes cast supported our Say-on-Pay vote. The Committee believes this high degree of stockholder support for our 2023 say-on-pay proposal affirms stockholders’ support of our executive officers other thancompensation program. We remain committed to ongoing engagement with our principalinvestors on all appropriate matters, including executive officer.compensation and governance. In 2023, we engaged with stockholders representing a significant percentage of our common stock on a regular basis, including on governance and social responsibility matters. The Committee considers stockholder input in evaluating the design of our executive compensation and the compensation decisions for each of the NEOs.
Summary Compensation Table
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Chief Executive Officer Transition
As previously disclosed in our August 3, 2022 Form 8-K filing, we executed our Chief Executive Officer succession plan effective January 1, 2023, at which time Mr. Hoffman transitioned to a role as non-employee director and Mr. Hykes succeeded Mr. Hoffman as CEO.
The Committee approved the following table discloseschanges for 2023 after considering factors including competitive market data for the CEO role, typical practices for internally promoted CEOs, and our compensation paid by us during fiscal years 2020philosophy:
Base salary increased from $500,000 to $700,000
Annual incentive plan target opportunity increased from 65% of salary to 100% of salary
Target long-term incentive award increased from $2,329,000 to $3,750,000
No special bonuses or awards were provided to Mr. Hykes or Mr. Hoffman in connection with the transition.
ELEMENTS OF OUR EXECUTIVE COMPENSATION PROGRAM
In order to achieve our objectives, the Committee utilizes the components of compensation set forth below. These components are regularly reviewed to ensure alignment to overall philosophy and 2019strategies.
Component | Description and Objective | |
| Base Salary | • Fixed Compensation • Set at market competitive levels recognizing individual experience, skills and performance | |
| Annual Incentive Plan | • Performance-based cash compensation • Tied to company financial and non-financial strategic priorities (Revenue, Operating Income/(Loss), R&D and Clinical Research) | |
| Equity | • Two vehicles consisting of time-based Restricted Stock Units and Stock Options • RSUs and Stock Options which vest 1/16th per quarter over 4 years • Promotes retention, long-term stock ownership in Inari, and alignment to stockholder interests | |
In addition, our NEOs are eligible to participate in our health and welfare programs and our 401(k) plan and ESPP on the same basis as our other employees. Each of these elements of compensation for 2023 is described further below.
2023 Target Pay Mix
By emphasizing annual and long-term incentives, our 2023 pay mix reflects our executive compensation objectives, advances our pay-for-performance philosophy, and aligns executive officers’ interests with those of our stockholders.
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A significant majority of 2023 target executive compensation opportunity is at-risk and long-term. This approach is consistent with our focus on pay-for-performance. We consider compensation to be “at-risk” if it is subject to operating performance or if its value depends on the value of our common stock. In 2023, 86% of our CEO’s compensation was at-risk compensation, and on average, 80% of the compensation of our other NEOs was at-risk. Additionally, long-term incentives accounted for 73% of CEO and 68% of other NEO compensation.
Base Salaries
The base salary of each NEO is intended to be competitive relative to our peer group. The Committee evaluates base salary decisions with consideration to overall competitiveness, performance, expertise, criticalness of role, and internal equity. To facilitate this evaluation, FW Cook prepared a comprehensive pay study outlining market compensation and positioning for each NEO.
In 2023 the Committee approved the following base salaries for our NEOs:
Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Option Awards ($)(3) | Total ($) | ||||||||||||||||||
William Hoffman, President & Chief Executive Officer | | 2020 2019 |
| | 495,083 400,000 |
| | 633,375 400,000 |
| | — 163,410 |
| | — — |
| | 1,128,458 963,410 | | ||||||
Andrew Hykes, Chief Operating Officer (4) | | 2020 2019 |
| | 383,782 315,763 |
| | 337,500 256,800 |
| | — 73,179 |
| | 107,914 7,868 |
| | 829,196 653,610 | | ||||||
Thomas Tu, M.D., Chief Medical Officer (5) | 2020 | 346,718 | 557,500 | — | 86,620 | 990,838 | ||||||||||||||||||
Named Executive Officer | 2023 Base Salary ($) | 2022 Base Salary ($) | % Change | |||||||||
Andrew Hykes (1) | 700,000 | 500,000 | 40.0 | % | ||||||||
Mitchell Hill | 500,000 | 485,000 | 3.1 | % | ||||||||
Thomas Tu, M.D. | 500,000 | 485,000 | 3.1 | % | ||||||||
| (1) |
|
Annual Incentive Cash Compensation
The annual incentive plan is designed to achieve critical financial and non-financial measures that are critical to the execution of our overall business strategy and enhance stockholder value. The Committee is responsible for setting performance goals and payout levels, target award opportunities, and approving actual payouts under the incentive plan. The target opportunity is evaluated by the Committee annually, and similar to base salary, looks at overall competitiveness to the market.
Target opportunities for Mr. Hill and Dr. Tu remained the same, while the target opportunity for Mr. Hykes increased 35% with the change in role from Chief Operating Officer in 2022 to Chief Executive Officer in 2023.
Named Executive Officer | 2023 Target Incentive | 2022 Target Incentive | % Change | |||||||||
Andrew Hykes | 100 | % | 65 | % | 35 | % | ||||||
Mitchell Hill | 60 | % | 60 | % | 0 | % | ||||||
Thomas Tu, M.D. | 60 | % | 60 | % | 0 | % | ||||||
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Performance Measures and Payout Determination. Each year, the Committee approves the annual incentive plan with financial and non-financial performance goals. Additionally, the Committee reviews the Company’s performance against the goals in determining the overall payout percentage. The 2023 design and payout information is listed below:
Metric | Weighting | Performance Goals | Weighted Payout % | |||||||||||||
| Revenue | 70 | % | Payout | $458.4M 50% | $482.5M 100% | $554.9M 200% | 79 | % | ||||||||
| Operating Income / (Loss) | 10 | % | Payout | ($33.7M) 100% | ($16.9M) 125% | Better Than ($16.9M) + 1 profitable Qtr. 150% | 15 | % | ||||||||
| R&D/New Products | 10 | % | Payout | Initiate limited market release (LMR) on 5 R&D projects 50% | Initiate LMR on 6 R&D projects 100% | Initiate LMR on 8 R&D projects 150% | 10 | % | ||||||||
| Clinical Research Milestones | 10 | % | 1. PEERLESS enrollment 2. DEFIANCE enrollment 3. Submission of abstracts, presentations and manuscripts 4. Submission of the first Inari real world data manuscripts: methods, methods + DVT, methods + DVT + PE | 14 | % | |||||||||||
| Total Payout | 118 | % | ||||||||||||||
The following table summarizes the total 2023 annual incentive bonus earned by our NEOs:
Executive | Base Salary ($) | X | Target Incentive (%) | = | Target Incentive ($) | X | 2023 Payout % | = | Actual Bonus Payout ($) | |||||||||||||||||||||||||||
Andrew Hykes | 700,000 | 100 | % | 700,000 | 118 | % | 826,000 | |||||||||||||||||||||||||||||
Mitchell Hill | 500,000 | 60 | % | 300,000 | 118 | % | 354,000 | |||||||||||||||||||||||||||||
Thomas Tu, M.D. | 500,000 | 60 | % | 300,000 | 118 | % | 354,000 | |||||||||||||||||||||||||||||
Long-Term Incentives
Long-term equity incentives are the largest portion of compensation opportunity for our NEOs and designed for retention and alignment to stockholders’ interests. Annually, the Committee sets the individual target award for each NEO based on competitiveness, performance, expertise, criticalness of role, and internal equity.
In 2023, the Committee included stock options as part of the equity incentive award with a 25% overall weighting. This addition further aligns NEO interests to stockholders and creation of long-term growth.
The Committee approved the following target long-term incentive opportunities for eachof the named NEOs in 2023:
Named Executive Officer | 2023 Equity Target (1)(2) | 2022 Equity Target | % Change | |||||||||
Andrew Hykes (3) | 3,750,000 | 2,329,000 | 61.0 | % | ||||||||
Mitchell Hill | 1,725,000 | 1,554,000 | 11.0 | % | ||||||||
Thomas Tu, M.D. | 1,725,000 | 1,554,000 | 11.0 | % | ||||||||
|
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| option awards are the grant date fair value |
|
| (2) | 1/16th of |
Mr. |
|
For 2024, as part of the Committee’s commitment to grow and evolve the executive compensation program, the Committee again determined to provide stock options as part of the long-term incentive award with a 25% overall weighting, and further determined that 25% of the long-term incentive award will be in the form of Performance Share Units tied to 3-year cumulative revenue performance. The remaining 50% of the long-term incentive award will be in time-vested RSUs vesting quarterly over four years. This intentional change is based on stockholder feedback and further aligns the NEOs’ compensation to long-term growth of the Company and the interests of stockholders.
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NarrativeTo align our executive officers’ interests with those of our stockholders, we maintain stock ownership guidelines requiring that our Chief Executive Officer hold Inari shares with a value equal to Summary Compensation Table
Cash Compensation
2020 Salaries
Our NEOs receive their respective base salaries to compensate them for services rendered to our company. Thethree times (3x) his base salary payableand each other executive officer hold Inari shares with a value equal to one times (1x) their base salary. The Committee measures compliance with the guidelines as of the last business day of each NEO is intended to provide a fixed componentcalendar year based on the closing price of compensation reflectingour common stock during the executive’s skill set, experience, role30-trading day period through and responsibilities. In connection with our initial public offering,including the compensation committee approvedlast business day of the calendar year.
For purposes of determining compliance, the following increasesshares are treated as owned: (i) shares of our common stock owned individually, either directly or indirectly; and (ii) shares of our common stock owned jointly or separately by a spouse, domestic partner and/or minor children. No other rights to each NEO’s base salaryacquire shares of our common stock (including unexercised stock options or unvested RSUs) are considered shares of our common stock owned for 2020, effective uponpurposes of satisfying the closing ofownership requirement.
Should an executive officer fail to comply with the initial public offering:
Mr. Hoffman’s annual base salary increased to $563,000;
Mr. Hykes’ annual base salary increased to $400,000; and
Dr. Tu’s annual base salary increased to $450,000.
Additionally, in connection with Mr. Hykes’ appointment as our Chief Operating Officer,applicable ownership requirement, the compensation committee approved an increase to Mr. Hykes’ annual base salary from $400,000 to $450,000, effective September 1, 2020. Actual salary amounts paid to each NEO are set forth in the “Salary” column of the “Summary Compensation Table” above.
2020 Bonuses
Our NEOs were eligible to earn cash bonuses based on individual and corporate objectives during the year ended December 31, 2020, as determined by our Board of DirectorsCommittee, in its sole discretion. In connection with our initial public offering, the compensation committee approved an increase todiscretion, may review and address any such shortfall in ownership as it deems appropriate.
As of December 31, 2023, each NEO’s annual bonus target for 2020 to 50% (or, for Mr. Hoffman, 75%) of his respective base salary, effective upon the closing of the initial public offering. Based on a review of Company performance for 2020 and each NEO’s individual performance and contributions to the Company’s success, our Board of Directors approved the payment of bonuses for each NEO at 150% of target for 2020. Actual amounts paid to each NEO ($633,375 for Mr. Hoffman and $337,500 for each of Mr. Hykes and Dr. Tu) are set forth in the “Bonus” column of the “Summary Compensation Table” above.
Additionally, in December 2020, in order to better align Dr. Tu’s total compensation with that of similarly situated executives at our publicly-traded peers, the compensation committee approved the grant of a one-time special bonus to Dr. Tu equal to $220,000.
The above-described changes to the base salaries and target bonuses of our NEOs were intended to better align target total cash compensation opportunities with those provided by our publicly-traded peers.met their respective ownership requirement.
Equity Compensation
We use stock options and restricted stock units as the primary incentives for long-term compensation to our NEOs. Generally, stock options vest as to 25% of the total number of shares underlying the option on the one-year anniversary of the grant date or the vesting commencement date and subsequently in equal monthly installments over the ensuing thirty-six months, subject to the executive’s continued service with us on each applicable vesting date. Restricted stock units granted to our NEOs prior to the initial public offering cliff-vest on the fourth anniversary of the vesting commencement date, subject to the executive’s continued service with us on the applicable vesting date. Generally, restricted stock units granted to newly-hired executives vest as to 25% on the one-year anniversary of the grant date or the vesting commencement date and subsequently in equal quarterly installments over the ensuing thirty-six months, and annual grants of restricted stock units vest quarterly over four years, in each case subject to the executive’s continued service with us on each applicable vesting date. Additionally, certain of the restricted stock units subject to each award will accelerate and vest upon a termination of the executive’s service due to death or by the Company without cause (as defined in our 2011
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Equity Incentive Plan (the “2011 Plan”)). The restricted stock units also vest in full upon a sale event (as defined in the applicable award agreement). In the event of a change in control, outstanding equity awards held by our NEOs will be treated pursuant to the terms of the governing plan.
Our NEOs currently hold restricted stock units and stock options. In January 2020, each of Mr. Hykes and Dr. Tu were granted incentive stock options covering the number of shares of common stock set forth below. The option granted to Mr. Hykes vests as to 25% of the shares underlying the award on the first anniversary of the vesting commencement date, with the remaining shares vesting in equal monthly installments for the following 36 months, subject to his continued service on the applicable vesting date. The option granted to Dr. Tu vests as to 1/48th of the shares underlying the award on each monthly anniversary of the vesting commencement date, subject to his continued service on the applicable vesting date.
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Other Elements of Compensation
401(k) PlanRetirement Plans
We currently maintain a 401(k) retirement savings plan for our employees, including our NEOs, who satisfy certain eligibility requirements. Our NEOs are eligible to participate in the 401(k) plan on the same terms as other full-time employees. The Internal Revenue Code allows eligible employees to defer a portion of their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k) plan. We believe that providing a vehicle for tax-deferred retirement savings thoughthrough our 401(k) plan adds to the overall desirability of our executive compensation package and further incentivizes our employees, including our NEOs, in accordance with our compensation policies. We do not makeIn 2023, we matched 100% of the greater of $3,000 or 4% of eligible employee contributions to the 401(k) plan, which matching contributions under our 401(k) plan.vest immediately.
Health/Welfare PlansEmployee Benefits and Employee Stock Purchase Plan
All of our full-time employees, including our NEOs, are eligible to participate in our health and welfare plans, including (a) medical, dental and vision benefits; (b) medical and dependent care flexible spending
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accounts; short-term and(c) long-term disability insurance; and (d) life insurance. We believe these perquisites are necessary and appropriateIn addition, all of our full-time employees can elect to provide a competitive compensation package toparticipate in our NEOs.employee stock purchase program.
No Tax Gross-Ups
We do not make gross-up payments to cover our NEOs’ personal income taxes that may pertain to any of the compensation or perquisites paid or provided by our company.
Severance and Other Benefits Payable Upon Termination of Employment or Change in Control
We entered into new employment agreements with each of our NEOs during 2023, which replaced their existing employment agreements. Pursuant to their respective employment agreements and/or equity award agreements, each of our NEOs is entitled to certain payments and benefits in certain termination situations or upon a change in control. See “—Potential Payments Upon Termination or Change-In-Control” for more information on these payments and benefits and a description of certain terms of the new employment agreement.
Accounting Considerations
ASC Topic 718 requires us to calculate the grant date “fair value” of our stock-based awards using a variety of assumptions. ASC Topic 718 also requires us to recognize an expense for the fair value of equity-based compensation awards. Grants of stock options, restricted stock, RSUs and performance units under our equity incentive award plans will be accounted for under ASC Topic 718. The Committee will regularly consider the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our equity incentive award plans and programs. As accounting standards change, we may revise certain programs to appropriately align the accounting expense of our equity awards with our overall executive compensation philosophy and objectives.
Anti-Hedging Policy
Our Board has adopted an Insider Trading Compliance Policy, which applies to all of our directors, officers and employees. The policy prohibits our directors, officers and employees from engaging in hedging transactions; short sales; transactions puts, calls and other derivatives securities or instruments designed to increase in value as a result of, or hedge or offset any decrease in, the market value of the our securities, day trading and arbitrage trading and purchases of securities on margin. In limited circumstances and subject to pre-approval, pledging of securities and contributing company securities in exchange for interests in private exchange traded funds for diversification purposes may be permitted.
Clawback Policy
Our Clawback Policy applies to incentive compensation paid to our executive officers, including our NEOs. The policy provides that if we are required to prepare an accounting restatement due to our material non-compliance with any financial reporting requirement, our Compensation Committee shall require the NEO to forfeit all or part of any applicable incentive compensation received by the NEO during the covered period. For purposes of this policy, incentive compensation means any compensation that is earned, granted, or vested based wholly or in part upon the attainment of a financial reporting measure. Our Clawback Policy complies with the requirements of the new SEC and Nasdaq rules.
Compensation Committee Report
The Committee reviewed and discussed the Compensation Discussion and Analysis with the management of the Company. Based on this review and these discussions, we have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s 2024 Proxy Statement and incorporated by reference into the Company’s Annual Report on Form 10-K.
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The preceding report has been furnished by the members of the Committee:
Jonathan Root, M.D. (Chair)
Dana G. Mead, Jr.
Donald Milder
Catherine Szyman
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SUMMARY OF EXECUTIVE COMPENSATION
Summary Compensation Table
The following table summarizes the compensation of our NEOs during fiscal years 2023, 2022 and 2021. Mr. Hoffman resigned from his position as Chief Executive Officer effective December 31, 2022, and Mr. Hykes became Chief Executive Officer effective January 1, 2023.
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($) (1) | Non-Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($)(3) | Total ($) | ||||||||||||||||||||||||
Andrew Hykes, | 2023 | 700,000 | — | 2,606,744 | 937,488 | 826,000 | 13,133 | 5,083,365 | ||||||||||||||||||||||||
Chief Executive Officer | 2022 | 500,000 | — | 2,263,932 | — | 354,250 | 9,532 | 3,127,714 | ||||||||||||||||||||||||
| 2021 | 450,000 | 292,500 | 1,812,192 | — | — | 8,335 | 2,563,026 | |||||||||||||||||||||||||
Mitchell Hill, | 2023 | 497,500 | — | 1,199,072 | 431,242 | 354,000 | 13,133 | 2,494,947 | ||||||||||||||||||||||||
Chief Financial Officer | 2022 | 485,000 | — | 1,510,551 | — | 317,190 | 8,889 | 2,321,629 | ||||||||||||||||||||||||
| 2021 | 410,892 | 267,150 | 1,208,505 | — | — | 9,374 | 1,895,921 | |||||||||||||||||||||||||
Thomas Tu, M.D., | 2023 | 497,500 | — | 1,199,072 | 431,242 | 354,000 | 14,133 | 2,495,947 | ||||||||||||||||||||||||
Chief Medical Officer | 2022 | 485,000 | — | 1,510,551 | — | 317,190 | 10,752 | 2,323,492 | ||||||||||||||||||||||||
| 2021 | 450,000 | 292,500 | 1,208,505 | — | — | 9,789 | 1,960,794 | |||||||||||||||||||||||||
| (1) | The amounts shown under Stock Awards and Option Awards reflect the aggregate grant date fair value with respect to stock and options granted in the relevant year calculated in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 14 to our consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2023. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. |
| (2) | Amounts shown in this column for 2023 were earned under our cash bonus plan based on achievement of performance criteria for 2023 as described in the “Compensation Discussion and Analysis” above. Bonus amounts for 2022 and 2021 are included in the “Bonus” column as they were not paid based on achievement of predetermined performance criteria under a plan. |
| (3) | Consists of 401(k) matching contributions, life insurance and long-term disability insurance premiums paid by the Company. |
Grants of Plan-Based Awards
The following table sets forth information regarding grants of plan-based awards to our NEOs during the fiscal year ended December 31, 2023.
GRANTS OF PLAN-BASED AWARDS FOR 2023
| Name | Grant Date | All Other Stock Awards: Number of Shares of Stock or Units (#)(1) | All Other Option Awards (#)(2) | Option Exercise or Base Price of Option Awards ($/Share | Grant Date Fair Value Of Stock Option Awards ($)(3) | |||||||||||||||
Andrew Hykes | 2/18/2023 | 46,549 | 2,606,744 | |||||||||||||||||
| 2/18/2023 | 36,085 | 56.00 | 937,488 | |||||||||||||||||
Mitchell Hill | 2/18/2023 | 21,412 | 1,199,072 | |||||||||||||||||
| 2/18/2023 | 16,599 | 56.00 | 431,242 | |||||||||||||||||
Thomas Tu, M.D. | 2/18/2023 | 21,412 | 1,199,072 | |||||||||||||||||
| 2/18/2023 | 16,599 | 56.00 | 431,242 | |||||||||||||||||
| (1) | RSUs with respect to shares of common stock were granted under the 2020 Incentive Award Plan. 1/16th of the RSUs vest on each quarterly anniversary of January 1, 2023, the vesting commencement date. |
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| (2) | Options granted to our NEOs under the 2020 Incentive Award Plan which vest on each quarterly anniversary of January 1, 2024, the vesting commencement date. |
| (3) | The amounts shown reflect the grant date fair value of options and stock awards granted in the year indicated as computed in accordance with FASB ASC Topic 718 and, in the case of RSUs, the amounts shown reflect the aggregate grant date fair value of awards granted in the relevant year, computed in accordance with the provisions of FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 14 to our financial statements included in our annual report on Form 10-K for the year ended December 31, 2023. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
Employment Agreements for Executive Officers
In May 2020 (with respect to Messrs. Hoffman and Hykes) and September 2020 (with respect to Dr. Tu),2023, we entered into employment agreements with each of our NEOs, the material terms of which are described below. In addition, as a condition of employment each of our NEOs has also entered into our standard confidential information and invention assignment agreement. In February 2023, we amended and restated the employment agreement with Mr. Hykes to reflect his new role of President and Chief Executive Officer, and his employment agreement was subsequently amended along with the employment agreements for our NEOs in September 2023.
William HoffmanAndrew Hykes
Pursuant to his current employment agreement, Mr. HoffmanHykes serves as the President and Chief Executive Officer of the Company and reports directly to the Company’s Board of Directors. TheHis agreement provides for an initial term of the agreement endsending on the fifth anniversary of its effective date, with an automatic one-year renewal thereafter.
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Under the employment agreement, Mr. HoffmanHykes is entitled to receive an initial annual base salary of $563,000, subject to increase at the discretion of the Company’s Board of Directors or a subcommittee thereof; in addition, he is eligible to receive an annual performance bonus targeted at 75%target of his then-current annual base salary. The actual amount of any such bonus will be determined by reference to the attainment of applicable Company and/or individual performance objectives, as determined by the Company’s Board of Directors or a subcommittee thereof. Pursuant to the employment agreement, Mr. HoffmanHykes is also eligible to participate in customary health, welfare and fringe benefit plans, provided by the Company to its employees.
IfFor a discussion of the payments and other benefits to which Mr. Hoffman’sHykes is entitled in the event of certain qualifying terminations, including certain terminations in connection with a change in control of us, see “Potential Payments Upon Termination or Change-in-Control” below.
Mitchell Hill and Thomas Tu, M.D.
The current employment agreements for Mr. Hill and Dr. Tu contain the same terms and conditions as Mr. Hykes’s agreement, except:
| • | Positions. Mr. Hill serves as Chief Financial Officer and Dr. Tu serves as Chief Medical Officer and each report to the Company’s Chief Executive Officer. |
| • | Salary and Bonus. Each of Mr. Hill and Dr. Tu are entitled to receive an annual base salary and an annual performance bonus target of the executive’s then-current annual base salary. |
For a discussion of the payments and other benefits to which Mr. Hill and Dr. Tu are entitled in the event of certain qualifying terminations, including certain terminations in connection with a change in control of us, see “Potential Payments Upon Termination or Change-in-Control” below.
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Outstanding at Fiscal Year End
The following table summarizes the number of shares of common stock underlying outstanding equity incentive plan awards for each NEO as of December 31, 2023.
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR END
| Option Awards | Stock Awards | |||||||||||||||||||||||||||
Name | Grant Date | Numbers of Securities Underlying Unexercised Options (#) Exercisable | Numbers of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Numbers of Shares or Units of Stock That Have Not Vested (#) (1) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | |||||||||||||||||||||
Andrew Hykes | 05/03/2018 | 161,100 | — | 0.43 | 5/03/2028 | — | — | |||||||||||||||||||||
| 03/12/2019 | 16,719 | — | 0.46 | 3/12/2029 | — | — | ||||||||||||||||||||||
| 01/17/2020 | 16,719 | — | 6.45 | 1/17/2030 | — | — | ||||||||||||||||||||||
| 02/11/2021 | — | — | — | — | 4,008 | (2) | 260,199 | |||||||||||||||||||||
| 02/17/2022 | — | — | — | — | 14,940 | (2) | 969,905 | |||||||||||||||||||||
| 02/18/2023 | 9,021 | 27,063 | (3) | 56.00 | 2/18/2030 | 34,912 | (2) | 2,266,487 | ||||||||||||||||||||
Mitchell Hill | 04/23/2019 | 94,477 | — | 0.46 | 4/23/2029 | — | — | |||||||||||||||||||||
| 02/11/2021 | — | — | — | — | 2,673 | (2) | 173,531 | |||||||||||||||||||||
| 02/17/2022 | — | — | — | — | 9,968 | (2) | 647,123 | |||||||||||||||||||||
| 02/18/2023 | 4,149 | 12,450 | (3) | 56.00 | 2/18/2030 | 16,059 | (2) | 1,042,550 | ||||||||||||||||||||
Thomas Tu, M.D. | 04/23/2019 | 139,584 | — | 0.46 | 4/23/2029 | — | — | |||||||||||||||||||||
| 01/17/2020 | 4,149 | — | 6.45 | 1/17/2030 | — | — | ||||||||||||||||||||||
| 02/11/2021 | — | — | — | — | 2,673 | (2) | 173,531 | |||||||||||||||||||||
| 02/17/2022 | 8,420 | — | — | — | 9,968 | (2) | 647,123 | |||||||||||||||||||||
| 02/18/2023 | — | 12,450 | (3) | 56.00 | 2/18/2030 | 16,059 | (2) | 1,042,550 | ||||||||||||||||||||
| (1) | The market value of the RSUs that have not vested is calculated by multiplying the fair market value of a share of our common stock as of the close on December 29, 2023 ($64.92) by the number of RSUs outstanding under the award. |
| (2) | Consists of RSUs granted under the 2020 Plan. 1/16th of the RSUs will vest on each quarterly anniversary of the vesting commencement date, subject to continued service on the applicable vesting date. |
| (3) | Consists of stock options granted under the 2011 Plan. 1/16th of the shares underlying the award will vest on each monthly anniversary of the vesting commencement date, subject to continued service on the applicable vesting date. |
Options Exercised and Stock Vested
The following table sets forth information regarding options exercised, and the number of shares of common stock acquired upon the vesting of RSUs, in each case, by our NEOs for the fiscal year ending December 31, 2023.
| Option Awards | RSU Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | ||||||||||||
Andrew J. Hykes | — | — | 450,721 | 29,492,017 | ||||||||||||
Mitchell Hill | 78,000 | 4,780,593 | 137,064 | 8,792,034 | ||||||||||||
Thomas Tu, M.D. | 20,000 | 1,166,430 | 304,255 | 19,915,808 | ||||||||||||
| (1) | Values were determined based on the difference between the fair market value of our shares on the date of exercise and the exercise price of the options. |
| (2) | Values were determined based on the fair market value of our shares on the date of vesting. |
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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
As described above, we entered into new employment agreements with each of our NEOs in September 2023 that amend and replaced each executive’s existing employment agreement. The new employment agreements: (i) provide for automatic renewal on the fifth anniversary of the effective date for additional one-year terms, unless either the Company or an executive gives notice of non-renewal of his Agreement within sixty days prior to the end of the then applicable term, (ii) permit the NEOs to serve on the board of directors of for-profit corporations, subject to the Board’s approval and the Company’s Corporate Governance Guidelines, (iii) provide for the cash severance to be payable in connection with a change in control to be a multiple of the sum of the Executive’s base salary and target bonus, not base salary only, and (iv) add the payment of an Executive’s pro rata bonus in the event of a qualifying termination not in connection with a change of control. Further detail about the severance provisions in the new NEO employment agreement is provided below.
Andrew Hykes
In September 2023 we entered into an amended and restated employment agreement with Mr. Hykes. Pursuant to his employment agreement, if Mr. Hyke’s employment is terminated by the Company without “cause,” or by Mr. HoffmanHykes for “good reason” (each, as defined in the employment agreement, and referred to herein as a qualifying termination) then Mr. HoffmanHykes will be entitled to receive the following severance payments and benefits: (i) an amount equal to Mr. Hoffman’sHykes’ annual base salary then in effect;effect plus pro rata bonus; and (ii) continued healthcare coverage for 12 months after the termination date.
However, if either such termination of employment occurs three months prior to, on, or within 12 months following a “change in control” (as defined in ourthe 2020 Incentive Award Plan (the “2020 Plan”))Plan), then Mr. HoffmanHykes instead will be entitled to receive: (i) an amount equal to two times the sum of Mr. Hoffman’sHykes’ annual base salary then in effect;effect plus target annual bonus; (ii) continued healthcare coverage for 24 months after the termination date; (iii) Mr. Hoffman’sHykes’ target annual bonus, prorated based on the date of termination; and (iv) full accelerated vesting of all outstanding and unvested time-based vesting awards.
The severance payments and benefits described above are subject to Mr. Hoffman’sHykes’ execution and non-revocation of a general release of claims in favor of the Company and continued compliance with customary restrictive covenants. The employment agreement also includes a “best pay” provision under Section 280G of the Code, pursuant to which any “parachute payments” that become payable to Mr. HoffmanHykes will either be paid in full or reduced so that such payments are not subject to the excise tax under Section 4999 of the Code, whichever results in the better after-tax treatment to Mr. Hoffman.Hykes.
Andrew HykesMitchell Hill and Thomas Tu, M.D.
In September 2023, we entered into amended and restated employment agreements with Mr. Hill and Dr. Tu, respectively. The employment agreements for Mr. HykesHill and Dr. Tu contain the same termination-related terms and conditions as Mr. Hoffman’sHykes’ agreement, except:
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