| Fees | Fees | December 31,
2021
(
(1) “Audit Fees” consist of fees billed for the audit of our annual consolidated financial statements and statutory accounts. (2) “Audit-related” fees consist of fees in connection with the review of our interim consolidated financial statements. (3) “Tax Fees” consist of fees billed for tax planning advice in respect of intercompany arrangements and structuring in connection with both our initial public offering (“IPO”) and ongoing operations. (4) “All Other Fees” consist of non-audit fees paid to PwC for advisory services in relation to fundraising F-3 shelfand registration and Environmental, Social and Governance landscaping.statements filed with the SEC.
The Audit and Risk Committee has determined that the rendering of non-audit services by PwC is compatible with maintaining the principal accountant’s independence. Pre-Approval Procedures The Audit and Risk Committee pre-approves all audit and permissible non-audit services provided by the independent registered certified public accounting firm unless an exception to such pre-approval exists under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or the rules of the SEC. These services may include audit services, audit-related services, tax services and other services. Our Audit and Risk Committee has pre-approved all services performed by the independent registered public accounting firm since the pre-approval policy was adopted prior to our initial public offering.
REQUIRED VOTE
REQUIRED VOTE
The ratification of the selection of PwC as our independent registered public accounting firm requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. This vote is advisory and non-binding. Abstentions and broker non-votes, if any, will have no effect on this proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board of Directors recommends that the shareholders vote “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022.2023.
PROPOSAL 5—7—AUTHORIZATION FOR THE AUDIT AND RISK COMMITTEE TO DETERMINE THE AUDITORS’ REMUNERATION FOR THE FISCAL YEAR ENDING DECEMBER 31, 20222023 Proposal 57 authorizes the Audit and Risk Committee to determine our auditors’ remuneration for the fiscal year ending December 31, 2022.2023. Fees for PwC, our independent registered public accounting firm and our statutory auditor, in respect of the years ended December 31, 20212022 and December 31, 2020,2021, are set forth in Proposal 46 above. The Audit and Risk Committee is directly responsible for the appointment, retention and termination, and for determining the compensation of the Company’s independent registered public accounting firm. The Audit and Risk Committee shall pre-approve all auditing services and the terms thereof and non-audit services (other than non-audit services prohibited under Section 10A(g) of the Exchange Act or the applicable rules of the SEC or the Public Company Accounting Oversight Board (“PCAOB”)), except that pre-approval is not required for the provision of non-audit services if the “de minimis” provisions of Section 10A(i)(1)(B) of the Exchange Act are satisfied. The Audit and Risk Committee may delegate to the chairperson of the Audit and Risk Committee the authority to grant pre-approvals for audit and non-audit services, provided such approvals are presented to the Audit and Risk Committee at its next scheduled meeting. All services provided by PwC during fiscal year 20212022 were pre-approved by the Audit and Risk Committee in accordance with the pre-approval policy described above, and all audit-related fees, tax fees and other fees during the fiscal year 20212022 were approved by the Audit and Risk Committee. REQUIRED VOTE The authorization of the Audit and Risk Committee to determine auditor remuneration requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, will have no effect on this proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board of Directors recommends that the shareholders vote “FOR” the authorization of our Audit and Risk Committee to determine our auditors’ remuneration for the fiscal year ending December 31, 2022.2023.
PROPOSAL 6—8—RESOLUTION TO RECEIVE THE COMPANY’S U.K. STATUTORY ANNUAL ACCOUNTS AND REPORTS
At the Meeting, our Board will present our U.K. statutory annual accounts and reports for the period January 1, 20212022 through December 31, 2021,2022, which includes the audited portion of the directors’ annual report on remuneration. REQUIRED VOTE The receipt of the U.K. statutory annual accounts and reports requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, will have no effect on this proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board of Directors recommends that the shareholders vote “FOR” the resolution to receive our U.K. statutory annual accounts and reports.
PROPOSAL 7—9—APPROVAL OF OUR U.K. STATUTORY DIRECTORS’ ANNUAL REPORT ON REMUNERATION Our U.K. statutory directors’ remuneration report is set forth as Annex A to this Proxy Statement. The directors’ remuneration report includes the annual report on remuneration. This document describes in detail our remuneration policies and procedures and explains how these policies and procedures help to achieve our compensation objectives with regard to our directors and the retention of high-quality directors. Our Board of Directors and our Compensation and Leadership Development Committee believe that the policies and procedures as articulated in the directors’ remuneration report are effective and that as a result of these policies and procedures we have and will continue to have high-quality directors. Our Board of Directors has approved and signed the report in accordance with English law. At the Meeting, the shareholders will vote on the annual report on remuneration. This vote is advisory and non-binding. Although non-binding, our Board and Compensation and Leadership Development Committee will review and consider the voting results when making future decisions regarding our director remuneration program. Following the Meeting, and as required under English law, the directors’ annual report on remuneration will be delivered to the U.K. Registrar of Companies. REQUIRED VOTE The approval of our U.K. statutory directors’ annual report on remuneration requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. This vote is advisory and non-binding. Abstentions and broker non-votes, if any, will have no effect on this proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board of Directors recommends that the shareholders vote “FOR” approval of our U.K. statutory directors’ annual report on remuneration set forth in Annex A.
PROPOSAL 8— NON-BINDING, ADVISORY VOTE ON THE FREQUENCY OF FUTURE VOTES ON EXECUTIVE COMPENSATION The Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended, and Section 14A of the Exchange Act enable our shareholders to vote, on a non-binding, advisory basis, for their preference as to how frequently we should hold future votes on an advisory, non-binding basis to approve the compensation of our named executive officers, also known as a “Say-on-Pay” proposal. We are asking our shareholders whether our future Say-on-Pay votes should occur every one, two, or three years. Shareholders may also abstain from voting.
This vote is advisory and non-binding. However, our Board and Compensation and Leadership Development Committee value the opinions of our shareholders and will review and consider the voting results when making future decisions regarding the frequency of votes on the compensation of our named executive officers.
Currently, the Board believes that it is in the best interests of the Company and our shareholders to hold a Say-on-Pay vote every year, and this is the frequency recommended by our Board. We believe this frequency will enable our shareholders to vote, on a non-binding,advisory basis, on our most recent executive compensation practices and decisions as presented in our annual proxy statements, which will lead to greater transparency and more meaningful and timely communication between the Company and our shareholders regarding the compensation of our named executive officers. Accordingly, we ask our shareholders to indicate their preferred voting frequency by voting for every “one year,” “two years,” or “three years” (or abstaining from voting) in response to the following resolution at the Meeting:
“RESOLVED, to approve, on a non-binding, advisory basis, the alternative of every one year, two years, or three years as the preferred frequency with which the Company is to hold an advisory vote on the compensation of the Company’s named executive officers and the frequency that receives the highest number of votes cast by shareholders in person or by proxy at the AGM will be deemed the preferred frequency.”
REQUIRED VOTE
The Ordinary Shareholder Proxy Form provides shareholders with the opportunity to vote on one of three options with respect to this proposal (for the approval of holding the vote every year, for holding the vote every two years or for holding the vote every three years). These options are included in sub-resolutions 8a, 8b and 8c on the Ordinary Shareholder Proxy Form. If a shareholder votes on more than one of this proposal's sub-resolutions on the Ordinary Shareholder Proxy Form, his or her vote will be deemed invalid and will not be counted on the matter. The ADS Proxy Card provides the holders of ADSs with the opportunity to choose among four options with respect to this proposal (holding the vote every one, two, or three years, or abstaining). The option that receives the highest number of votes from the voting power present in person or by proxy at the Meeting and entitled to vote thereon will be deemed to be the frequency preferred by our shareholders. Abstentions and broker non-votes will have no effect on this proposal.
RECOMMENDATION OF THE BOARD OF DIRECTORS
Our Board of Directors recommends that the shareholders vote “FOR” the proposal that future, non-binding advisory votes on the compensation of our named executive officers occur every year.
PROPOSAL 9—10—ADVISORY (NON-BINDING) VOTE TO APPROVE THE COMPANY’S EXECUTIVE COMPENSATION
Section 14A of the Exchange Act requires that we provide our shareholders with the opportunity to vote to approve, on a non-binding, advisory basis, not less frequently than once every three years, the compensation of our named executive officers as disclosed in this Proxy Statement in accordance withofficers. Based on the compensation disclosure rulesvoting results of the SEC.vote on the frequency of future votes on executive compensation at our 2022 Annual General Meeting of Shareholders (the "2022 AGM"), our Board has determined that an advisory vote by the shareholders regarding named executive officer compensation will be conducted on an annual basis. Our compensation programs are designed to effectively align our executives’ interests with the interests of our shareholders by focusing on long-term equity incentives that correlate with the growth of sustainable long-term value for our shareholders. Shareholders are urged to read the section titled “ExecutiveCompensation Discussion and Analysis” in this Proxy Statement, which discusses how our executive compensation policies and practices implement our compensation philosophy and contains tabular information and narrative discussion about the compensation of our named executive officers in conjunction withfor the section titled “Named Executive Officer Compensation,” which provides additional information on the 2021 compensation of our Named Executive Officers.year ended December 31, 2022. Our Board and our Compensation and Leadership Development Committee believe that these policies and practices are effective in implementing our compensation philosophy and in achieving our compensation program goals. The vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the compensation of our named executive officers, as described in this Proxy Statement in accordance with the compensation disclosure rules of the SEC. Accordingly, we are asking our shareholders to vote on the following resolution at the Meeting: RESOLVED, that the shareholders hereby approve, on a non-binding advisory basis, the compensation paid to the Company’s named executive officers, as disclosed in the Company’s Proxy Statement for the 20222023 Annual General Meeting, pursuant to the compensation disclosure rules of the SEC, including the Executive Compensation Discussion and Analysis,section, the compensation tables and the narrative discussions that accompany the compensation tables. REQUIRED VOTE The approval of this advisory non-binding proposal requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, will have no effect on this proposal. The vote is advisory, which means that the vote is not binding on the Company, our Board or our Compensation and Leadership Development Committee. To the extent there is any significant vote against our named executive officer compensation as disclosed in this Proxy Statement, our Compensation and Leadership Development Committee will evaluate whether any actions are necessary to address the concerns of shareholders. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board of Directors recommends that the shareholders vote “FOR” the approval, on a non-binding advisory basis, of the compensation of our named executive officers, as disclosed in this Proxy Statement.
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE BOARD OF DIRECTORS Below is a list of our directors and their positions and ages as of April 19, 2022.4, 2023. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Age | | | | Position | | George Goldsmith | | 6667 | | | | Chief Executive Officer, Chair of the Board | | David Norton | | 7071 | | | | Lead Director | Jason CammKabir Nath | | 3358 | | | | Chief Executive Officer, Director | | Annalisa Jenkins, MBBS | | 5657 | | | | Director | | Thomas Lönngren | | 7172 | | | | Director | | Ekaterina Malievskaia | | 5556 | | | | Chief Innovation Officer, Director | | Linda McGoldrick | | 6768 | | | | Director | | Robert McQuade | | 6566 | | | | Director | | Wayne Riley | | 6272 | | | | Director |
During the year ended December 31, 2021,2022, there were elevensix full meetings of our Board. All of our then serving Directors attended a minimum of 75% of the aggregate of the meetings of the Board of Directors and meetings of the committees of which he or she was a member during 2021.2022. Under our Corporate Governance Guidelines, each of our directors is expected to make reasonable efforts to attend meetings of the Board. Directors are also expected to attend our annual general meeting of shareholders to the extent practicable. The biographical information for Thomas LönngrenGeorge Goldsmith, Annalisa Jenkins, Linda McGoldrick and Robert McQuade,Kabir Nath, the nominees to our Board, is provided in “Proposal 1—Re-Election of Thomas LönngrenGeorge Goldsmith to the Board of Directors,” and “Proposal 2—Re-Election of Robert McQuadeAnnalisa Jenkins to the Board of Directors,” “Proposal 3—Re-Election of Linda McGoldrick to the Board of Directors,” and “Proposal 4—Re-Election of Kabir Nath to the Board of Directors,” respectively. Below is biographical information for those directors who are not standing for re-election at this Meeting and who will remain seated following the Meeting. George Goldsmith has served as our Chief Executive Officer and Chair of our Board since June 2017. Previously, Mr. Goldsmith served as Chair and Chief Executive Officer at Tapestry Networks, which he co-founded in 2002, until 2005, and he continues to serve as Non-Executive Chairman. Mr. Goldsmith was Chief Executive Officer of TomorrowLab@McKinsey from 2000 to 2001, and prior to that served as Senior Advisor to McKinsey & Company from 1997 to 2000. Prior to that he served as Managing Director of the Lotus Institute after the Lotus Development Corporation’s acquisition of his first company, The Human Interface Group. Mr. Goldsmith also serves on the board of directors of COMPASS Pathways Limited. Mr. Goldsmith received his bachelor’s degree in Psychology from the University of Rochester and his masters in Clinical Psychology from the University of Connecticut. We believe that Mr. Goldsmith is qualified to serve on our Board because of his executive experience in our industry.
David Norton has served as a member of our Board since May 2018. Until his retirement in September 2011, Mr. Norton was Company Group Chairman, Global Pharmaceuticals for Johnson & Johnson, a public healthcare company. Mr. Norton began his Johnson & Johnson career in 1979 and held a number of positions at the company, including Company Group Chairman, Worldwide Commercial and Operations for the CNS, Internal Medicine franchise from 2006 to 2009, Company Group Chairman for the pharmaceutical businesses in Europe, the Middle East and Africa from 2004 to 2006, and Company Group Chairman for the pharmaceutical businesses in North America from 2003 to 2004. Mr. Norton currently serves on the board of directors of Mallinckrodt, PLC, Forepont Capital, LLC, and the Global Alliance for TB Drug Development (now known as TB Alliance). Previously during the past five years, Mr. Norton served on the board of directors of Mallinckrodt, PLC (NYSE American: MNK) and Vivus, Inc. Mr. Norton is a graduate of Control Data Institute, Australia and the College of Distributive Trades, United Kingdom. We believe that Mr. Norton is qualified to serve on our Board because of his experience, qualifications, attributes and skills, including his extensive global pharmaceutical experience. Annalisa Jenkins, MBBS, FRCPThomas Lönngren, has served as a member of our Board since May 2018. Mr. Lönngren currently serves as the Director at PharmaExec Consulting AB and as a Strategic Advisor at the NDA Group, which he has done since 2010. He is non-executive board member and chairman at Egetis Therapeutics AB, Sweden and board member at the NDA group Sweden. He acts as an advisor to the following companies and organizations: Artis Venture, San Francisco, U.S., Baren Therapeutics, San Francisco, U.S., faculty member of GLG Institute (Gerson Lehrman Group), New York, U.S., and special advisor to the Centre for Innovation in Regulatory Science (CIRS), London, U.K. He was the Deputy General Director of the Swedish Medical Product Agency until 2000. From November 20172001 until April 2019, Dr. Jenkins2010, Mr. Lönngren served as the Chief Executive Officer of PlaqueTec Ltd., a biotechnology company focusing on coronary artery disease treatment and prevention. Previously, Dr. Jenkins served as the Chief Executive Officer and a memberDirector of the boardEuropean Medical Agency. Mr. Lönngren received his degree in pharmacy and MSc in Social and Regulatory Pharmacy from Uppsala University. He is an Honorary Member of directorsthe Royal Pharmaceutical Society of Dimension Therapeutics, Inc., a biotechnology company focused on rareGreat Britain, Honorary Fellow of the Royal College of Physicians in Great Britain, and metabolic diseases associated withholds Honorary Doctorates from the liver, from September 2014 until its sale to Ultragenyx PharmaceuticalUniversity of Uppsala and University of Bath, U.K. We
Inc. in November 2017. From October 2013believe that Mr. Lönngren is qualified to March 2014,serve on our Board because of his experience, qualifications, attributes and skills, including his extensive pharmaceutical consulting experience.
Robert McQuade, Ph.D. has served as a member of our Board since April 2020. Dr. Jenkins servedMcQuade currently serves as the Executive Vice President Head& Chief Strategic Officer at Otsuka Pharmaceutical Development & Commercialization, Inc., where he has served since 2004. Dr. McQuade is also the Officer and Manager of Globalthe McQuade Center for Strategic Research and Development for Merck Serono Pharmaceuticals, a biopharmaceutical company. Previously, from September 2011 to October 2013, she served as Merck Serono’s Executive Vice President, Global Development and Medical, and was a member of Merck Serono’s executive committee. Prior to that,LLC since February 2020. Dr. Jenkins pursued a 15-year career at Bristol-Myers Squibb Company, a biopharmaceutical company, where, from July 2009 to June 2011 she was a Senior Vice President and Head of Global Medical Affairs. Dr. Jenkins isMcQuade currently a committee member of the science board to the FDA, chairs the Court of the London School of Hygiene and Tropical Medicine and is a non-executive director of Genomics England. Dr. Jenkins serves on the board of directors of Avrobio,entities related to Otsuka, including Otsuka America Pharmaceutical, Inc. (Nasdaq: AVRO), Oncimmune Holdings plc (LSE: ONC)Astex Pharmaceutical, Inc., Affimed GmbH (Nasdaq: AFMD)Astex Pharmaceutical, Ltd., Avanir Pharmaceuticals, Visterra, Inc., Otsuka Pharmaceutical Development & Commercialization, Inc. and a numberthe McQuade Center for Strategic Research and Development. He also serves on the board of privately held biotechnology and life science companies.directors of The Technology Accelerator Co., which is based in Charleston, SC. Dr. Jenkins graduated with aMcQuade received his degree in medicinebiology from St. Bartholomew’s HospitalDavidson College and completed his Ph.D. in thebiochemistry from University of LondonNorth Carolina at Chapel Hill. Prior to joining Otsuka, Dr. McQuade worked in drug discovery research at Schering-Plough Corp. and subsequently trained in cardiovascular medicine in the U.K. National Health Service. Earlier in her career, Dr. Jenkins served as a Medical Officer in the British Royal Navy.global medical affairs at Bristol-Myers Squibb Company (NYSE: BMS). We believe that Dr. JenkinsMcQuade is qualified to serve on our Board based on her industrybecause of his experience in the fieldclinical development and regulatory affairs, in which we operateaddition to his qualifications, attributes and her executive experience with companies in our industry.skills, including his extensive pharmaceutical experience. Ekaterina Malievskaia M.D. has served as our Chief Innovation Officer since January 2020 and as a member of our Board since 2017. Prior to her role as our Chief Innovation Officer, Dr. Malievskaia served as our Head of Research and Development from January 2019 to January 2020 and as our Chief Medical Officer from June 2017 to 2019. Dr. Malievskaia also previously served as clinical faculty at Mount Sinai School of Medicine and as a research professor in Public Health at the City University of New York. Prior to these roles, Dr. Malievskaia worked in clinical, academic and public health from 1999 until co-founding COMPASS. Dr. Malievskaia received her Doctor of Medicine from St. Petersburg Medical Academy. We believe that Dr. Malievskaia is qualified to serve on our Board because of her clinical practice, executive experience and public health academic background. Linda McGoldrick has served as a director of our company since September 2020. In 1985, Ms. McGoldrick founded, and currently serves as Chair and Chief Executive Officer of, Financial Health Associates International, a strategic consulting company specializing in healthcare and life sciences. From April 2019 through December 2019, Ms. McGoldrick served as President and interim Chief Executive Officer of Zillion, Inc., a health, technology and condition management company. Over her professional career, she has served in a number of leadership roles, including senior vice president and National Development director for the Healthcare and Life Sciences Industry Practices at Marsh-MMC Companies, international operations and marketing director of Veos plc, a European medical devices company, and managing director Europe for Kaiser Permanente International. In 2018, Ms. McGoldrick was appointed by the Governor of Massachusetts to serve on the state’s Health Information Technology Commission. Ms. McGoldrick has served as a director of numerous publicly traded and private held companies and non-profit organizations in the United States, United Kingdom and Europe and currently serves on the faculty of the National Association of Corporate Directors. Ms. McGoldrick previously served on the board of directors of Avadim Health, Inc. Ms. McGoldrick received her bachelor of arts in sociology from Ohio Wesleyan University and master of social work from the University of Pennsylvania and master of business administration in management from the Wharton School, University of Pennsylvania. We believe that Ms. McGoldrick is qualified to serve on our Board because of her extensive experience as a director, global business strategy leader and policy expert for U.S. and European companies and organizations.
Wayne J Riley, M.D., MPH, M.B.A. has served as a member of our Board since March 2021. Dr. Riley serves as the President of the State University of New York (SUNY) Downstate Health Sciences University, Brooklyn, NY, USA where he holds tenured professorships in internal medicine, and health policy and management and has served since January 2017. Prior to this, Dr. Riley served as a clinical professor of medicine and adjunct professor of health policy at Vanderbilt University from July 2007 until June 2017, and as President and Chief Executive Officer of Meharry Medical College from January 2007 until July 2013. In addition, Dr. Riley currently serves as an elected member of the U.S. National Academy of Medicine, a Commissioner of the U.S. Medicare Payment Advisory Commission, Chair of the Board of the New York Academy of Medicine, President of the Society of Medical Administrators, an organization of leading North American physician executives, and a President Emeritus of the American College of Physicians. Dr. Riley is also a member of the board of directors of HCA Healthcare Inc,Inc. (NYSE: HCA), where he serves as Chair of the Patient Safety & Quality Committee and a member of the Audit & Compliance and Nominating & Corporate Governance Committees and a member of the board of directors of HeartFlow, Inc. He also previously served as a Director of Vertex Pharmaceuticals Inc. (Nasdaq: VRTX). Dr. Riley holds a BA from Yale University, Masters in Public Health from the Tulane University School of Public Health and Tropical Medicine, M.D. from the Morehouse School of Medicine, and MBA from Rice University. We believe that Dr. Riley is qualified to serve on our Board because of his experience, qualifications, attributes and skills, including his extensive medical and health policy experience.
CORPORATE GOVERNANCE Structure of our Board of Directors Our Articles of Association and Corporate Governance Guidelines gives our Board the flexibility to determine the appropriate leadership structure for the Board, including whether the offices of DirectorsChief Executive Officer and Chair of the Board should be separate or combined and why the Board’ leadership structure is appropriate given the specific characteristics or circumstances of our company and the Board’s assessment of its leadership from time to time. We currently separate the roles of Chief Executive Officer and Chair of the Board . Separating the duties of the Chair from the duties of the Chief Executive Officer allows our Chief Executive Officer to focus on our day-to-day business, while allowing the Chair to lead the Board in its fundamental role of providing advice to and independent oversight of management. Specifically, the Chair presides over meetings of the Board, facilitates communications between management and the Board and assists with other corporate governance matters. We believe that having a non-executive Chair can enhance the effectiveness of the Board as a whole.
Our Board is currently chaired by the Chief Executive Officerour co-founder and a significant shareholder, George Goldsmith. The Company believes that it is advantageous to have a Board Chair with an extensive history with and knowledge of the Company George Goldsmith.(as is the case with our current Board Chair). We have designated David Norton as our lead independent director to help reinforce the independence of our Board of Directors as a whole. As lead independent director, Mr. Norton provides leadership to our Board if circumstances arise in which the roles of Chief Executive Officerco-founder and significant shareholder and Board Chair may be, or may be perceived to be, in conflict, and performs such additional duties as our Board may otherwise determine and delegate, including serving as principal liaison between the Board Chair and our independent directors. The Company believes that combining the positions of Chief Executive Officer and Board Chair helps to ensure that our Board and management act with a common purpose. We believe that combining the positions of Chief Executive Officer and Board Chair provides a single, clear chain of command to execute our business plans. In addition, we believe that a combined Chief Executive Officer/Board Chair is better positioned to facilitate the regular flow of information between management and the Board. The Company also believes that it is advantageous to have a Board Chair with an extensive history with and knowledge of the Company (as is the case with the Company’s Chief Executive Officer).
Independence of our Board of Directors Our Board of Directors has determined that all of our current directors, other than George Goldsmith, our Board Chair, Kabir Nath, our Chief Executive Officer, and Ekaterina Malievskaia, our Chief Innovation Officer, qualify as “independent” directors in accordance with the independence requirements under the applicable Nasdaq rules as well as applicable rules promulgated by the SEC. Mr. GoldsmithNath and Dr. Malievskaia are not considered independent because they are employees of the Company. Mr. Goldsmith is not considered independent because he served as our chief executive officer during the past three years. Our Board of Directors has made a subjective determination as to each independent director that no relationships exist that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, our Board reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and our management. Mr. Goldsmith is married to Dr. Malievskaia. Additionally, until his resignation effective April 16, 2021, Dr. Maliveskaia’s son worked for us as a Stakeholder Engagement and Operations Associate. There are no other family relationships among any of our directors or executive officers. Our independent directors meet in regularly scheduled executive sessions at which only independent directors are present. All ofThe Audit and Risk Committee, the committees of our BoardCompensation and Leadership Development Committee and the Nominating and Corporate Governance Committee are each comprised entirely of directors determined by the Board of Directors to be independent. Board Oversight of Risk Management and ESG IssuesMatters Our management is primarily responsible for assessing and managing risk while ourand one of the key functions of the Board is responsible for overseeing management’s executioninformed oversight of our risk management process. In carrying out its responsibilities. Ourrisk oversight responsibilities, the Board reviews the long and short-term operational and external risks facing the Company through its participation in long-range strategic planning, and ongoing reports from various Board standing committees that address risks inherent in their respective areas of Directorsoversight. On an ongoing basis, the Board and management identify key long and short-term risks, assess their potential impact and likelihood, and, where appropriate, implement operational measures and controls or purchase insurance coverage in order to help ensure adequate risk mitigation. The Board is supported by its committees in fulfillment of this responsibility.its risk oversight responsibilities. For example, our Audit and Risk Committee focuses on our overall financial risk by evaluating our internal controls and disclosure policies as well as ensuring the integrity of our financial statements and periodic reports. The Audit and Risk Committee also monitors compliance with legal and regulatory requirements. At its meetings, our Audit and Risk Committee receives reports concerning material risks and significant updates on compliance and risk management matters from our Chief Legal Officer and other executive officers, as necessary. Our Compensation and Leadership Development Committee (the “Compensation Committee”) strives to create incentives that encourage an appropriate level of risk-taking consistent with our business strategy. Finally, our Nominating and Corporate Governance Committee ensures that our governance policies and procedures are appropriate in light of the risks we face. Most of the Environmental, Social, and Governance (“ESG”) matters prioritized as part of our ESG framework are embedded in the Company’s strategic and operational plans, and are therefore overseen by the Board as part of regular updates and discussions that the Board receives and holds on these plans. The Board also specifically discusses our ESG framework at least once a year. Furthermore, Board oversight of specific ESG matters occurs through the committees of the Board: our Nominating and Corporate Governance Committee oversees our corporate governance guidelines; our Audit and Risk Committee oversees our risk and compliance framework, our code of conduct and ethics, as well as data privacy and security matters; and our Compensation and Leadership Development Committee oversees talent and employee-related matters, and receives regular updates from our Chief People Officer onhuman capital management strategies, including our employee well-being program and equity, diversity and inclusion initiatives.
Board Evaluation Process Our Board of Directors is committed to assessing its own performance as a board in order to identify its strengths as well as areas in which it may improve its performance. The self-evaluationboard evaluation process, which is overseen by the Nominating and Corporate Governance Committee, involves the completion of annual written questionnaires by the directors review and discussioninterviews with members of the Board, key members of management and key advisors to the Board. The results of the evaluationsboard evaluation process are reviewed and discussed, including considerations of action plans to address any issues, by both the Nominating and Corporate Governance Committee and our Board, and consideration of action plans to address any issues.Board. Committees of Our Board of Directors Our Board of Directors has three standing committees: the Audit and Risk Committee, the Compensation and Leadership Development Committee, and the Nominating and Corporate Governance Committee. We have also establishedhave an Innovation and Research Committee, which met three times last year, but this committeemeets on an ad hoc, as needed basis and does not yet have a charter in place that governs its purpose and duties. The Innovation and Research Committee meets to oversee the development and progress of programs to research and develop drug and technology assets that aid our mission to accelerate patient access to evidence-based innovation in mental health. The charters for our Audit and Risk Committee, Compensation and Leadership Development Committee and Nominating and Corporate Governance Committee can be found on the “Corporate Governance–Documents and Charters” section of our investor relations website at ir.compasspathways.com. Each such committee reviews these charters at least annually. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Audit and Risk Committee | | Compensation and Leadership Development Committee | | Nominating and
Corporate
Governance | Innovation and Research Committee | | | George Goldsmith | | | | | | | | | | David Norton | | | | X | | | | | Jason CammKabir Nath | | | | X | | X | X | | | Annalisa Jenkins, MBBS | | X | | Chair | | | X | | | Thomas Lönngren | | | | | | Chair | | | | Ekaterina Malievskaia | | | | | | | X | | | Linda McGoldrick | | Chair | | | | X | | | | Robert McQuade | | X | | | | | Chair | | | Wayne Riley | | | | X | | X | | |
Audit and Risk Committee Our Audit and Risk Committee currently consists of Annalisa Jenkins, Linda McGoldrick and Robert McQuade and assists our Board in overseeing our accounting and financial reporting processes. Ms. McGoldrick serves as chair of our Audit and Risk Committee. Our Audit and Risk Committee consists exclusively of members of our Board who are financially literate, and Dr. Jenkins and Ms. McGoldrick are each considered an “audit committee financial expert” as defined by applicable SEC rules and has the requisite financial sophistication as defined under the applicable Nasdaq rules and regulations. Our Board of Directors has determined that all of the members of our Audit and Risk Committee satisfy the “independence” requirements set forth in Rule 10A-3 under the Exchange Act. Our Audit and Risk Committee met fivesix times in 20212022 and oversees and reviews our internal controls, accounting policies and financial reporting, and provides a forum through which our independent registered public accounting firm reports. Our Audit and Risk Committee meets regularly with our independent registered public accounting firm without management present. Our Audit and Risk Committee operates under a written charter that satisfies the applicable standards of the SEC and Nasdaq. Our Audit and Risk Committee’s responsibilities include: •appointing, approving the compensation of, and assessing the performance and independence of our independent registered public accounting firm; •approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm;
•reviewing the audit plan with the independent registered public accounting firm and members of management responsible for preparing our financial statements and discussing with management and the
independent registered public accounting firm our annual and quarterly financial statements and related disclosures as well as critical accounting policies and practices used by us; •discussing with the independent registered public accounting firm its independence and obtaining required written communications required by the PCAOB; •exercising general oversight over our information security and technology risks, including our information security and related risk management programs; and •monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements and reviewing all related party transactions for potential conflict of interest situations and approving all such transactions. Compensation and Leadership Development Committee Our Compensation and Leadership Development Committee currently consists of Jason Camm, Annalisa Jenkins, David Norton and Wayne Riley. Dr. Jenkins serves as chair of our Compensation and Leadership Development Committee. Under SEC and Nasdaq rules, there are heightened independence standards for members of our Compensation and Leadership Development Committee, including a prohibition against the receipt of any compensation from us other than standard board member fees. Each member of our Compensation and Leadership Development Committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act. Our Board of Directors has determined that each member of our Compensation and Leadership Development Committee is “independent” as defined under the applicable Nasdaq rules. Our Compensation and Leadership Development Committee held fivesix meetings during 2021.2022. Our Compensation and Leadership Development Committee’s responsibilities include: •reviewing policies relevant to the consideration and determination of compensation of our directors and executive officers; •overseeing and administering our employee share option scheme or equity incentive plans in operation from time to time, including reviewing and approving grants and awards; •reviewing and approving certain corporate goals and objectives relating to the compensation of our chief executive officer, evaluating the performance of our chief executive officer in light of such corporate goals and objectives, and recommending the compensation of our chief executive officer to the Board based on such evaluation; •reviewing and recommending to our Board the compensation of our other executive officers and our directors; •overseeing our strategies, programs and initiatives related to equity, diversity and inclusion, gender pay parity and creating a positive working environment; •reviewing and overseeing our human capital management strategies, policies and practices, including employee health, safety and well-being, workforce belong, inclusion and diversity efforts and overall employee engagement and retention; and •reviewing and approving the retention of consulting firm or outside advisor to assist in the evaluation of compensation matters. The Compensation and Leadership Development Committee has the authority to delegate certain responsibilities to one or more subcommittees consisting of one or more of its members, but has not delegated such authority to a subcommittee. Compensation Committee Interlocks and Insider Participation
None of the members of our Compensation Committee, which include Dr. Jenkins, Mr. Camm, Mr. Norton and Dr. Riley, has at any time during the prior year been one of our officers or employees or was formerly an officer. None of our executive officers currently serves, or in the past fiscal year has served, as a member of our Compensation Committee or the compensation committee of any entity that has one or more executive officers serving on our Board.
Our Board of Directors has delegated to the Compensation and Leadership Development Committee the authority to approve any proposed compensation for our executive officers other than the Chief Executive Officer whose compensation is recommended to the Board for approval based on the Compensation and Leadership Development Committee’s evaluation of his performance in relation to our goals and objectives. Non-executive director compensation is recommended by our Compensation and Leadership Development Committee to the Board of Directors for approval. Our Chief Executive Officer may participate in general discussions with our Compensation and Leadership Development
Committee and Board of Directors about these compensation matters, but he does not participate in discussions during which his individual compensation is being considered and approved. In 2021,2022, the Compensation and Leadership Development Committee retained the services of Aon’s Human Capital Solutions practice, a division of Aon plc (“Aon”), an independent compensation consultant, to assist the Compensation and Leadership Development Committee with respect to compensation actions in 20212022 with the goal of ensuring that our compensation arrangements for our Chief Executive Officer, our other senior executive officers and our non-executive directors were competitive.
Nominating and Corporate Governance Committee Our Nominating and Corporate Governance Committee currently consists of Thomas Lönngren, Jason Camm, Linda McGoldrick and Wayne Riley. Mr. Lönngren serves as chair of our nominatingNominating and corporate governanceCorporate Governance committee. Our Board of Directors has determined that each member of our Nominating and Corporate Governance Committee is “independent” as defined under the applicable Nasdaq rules. Our Nominating and Corporate Governance Committee held three meetings during 2021.2022. Our nominatingNominating and corporate governanceCorporate Governance committee’s responsibilities include: •developing and recommending to the Board criteria for board and committee membership; •establishing procedures for identifying and evaluating board of director candidates, including nominees recommended by shareholders, including procedures by which shareholders may recommend director candidates; •identifying individuals qualified to become members of the Board; •evaluating the suitability of individual prospective director candidates, including considering the benefits of diversity, including diversity of thought, educational and professional background, gender, race, age, sexual orientation or ethnic and national background; •recommending to our Board the persons to be nominated for election as directors and to each of our Board’s committees; •developing and recommending to our Board a set of corporate governance guidelines, and regularly reviewing policies and guidelines adopted by the Board or its committees; and •overseeing the evaluation of our Board and its committees. Our Board is responsible for filling vacancies on our Board and for nominating candidates for election by our shareholders each year in the class of directors whose term expires at the relevant annual general meeting. The Board delegates the selection and nomination process to the Nominating and Corporate Governance Committee, with the expectation that other members of the Board, and of management, will be requested to take part in the process as appropriate. The Nominating and Corporate Governance Committee considers candidates for Board of Director membership by soliciting recommendations from any of the following sources: independent directors, the Chief Executive Officer, other executive officers, third-party search firms, or any other source it deems appropriate. Additionally, the Nominating and Corporate Governance Committee will review and evaluate the qualifications of any such proposed candidate, and conduct inquiries it deems appropriate. Any shareholder who wishes to recommend a candidate for consideration by the committee as a nominee for director should follow the procedures described later in this Proxy Statement under the heading “Additional Information—Shareholder Proposals.” Our Board of Directors is responsible for filling vacancies on our Board and for nominating candidates for election by our shareholders each year in the class of directors whose term expires at the relevant annual general meeting. The Board of Directors delegates the selection and nomination process to the Nominating and Corporate Governance Committee, with the expectation that other members of the Board of Directors, and of management, will be requested to take part in the process as appropriate.
Director Nomination Process The process followed by our Nominating and Corporate Governance Committee to identify and evaluate director candidates includes requests to board members and others for recommendations, including through the use of search firms or other advisors, meetings from time to time to evaluate biographical information and background material relating to potential candidates, and interviews of selected candidates by management, recruiters, members of the committee and our Board. Once candidates have been identified, the Nominating and Corporate Governance Committee confirms that the candidates meet all of the minimum qualifications and other criteria for director nominees approved by the Board of Directors and all facts and circumstances that it deems appropriate or advisable. The Nominating and Corporate Governance
Committee may gather information about the candidates that relate to their skills, their depth and breadth of business experience or other background characteristics, their independence, the needs of the Board and any other item of information that the Nominating and Corporate Governance Committee deems to be appropriate in the evaluation process. The Nominating and Corporate Governance Committee then meets as a group to discuss and evaluate the qualities and skills of each candidate, both on an individual basis and taking into account the overall composition and needs of our Board. Based on the results of the evaluation process, the Nominating and Corporate Governance Committee recommends candidates for the Board of Directors’Board’s approval to fill a vacancy or as director nominees for election to the Board of Directors by our shareholders each year in the class of directors whose term expires at the relevant annual general meeting. The qualifications, qualities and skills that our Nominating and Corporate Governance Committee believes must be met by a committee-recommended nominee for a position on our Board are as follows:
•The nominee shall have experience at a strategic or policymaking level in a business, government, non-profit or academic organization of high standing. •The nominee shall be accomplished in his or her respective field, with superior credentials and recognition. •The nominee shall be well regarded in the community and shall have a long-term reputation for the high ethical and moral standards. •The nominee shall have sufficient time and availability to devote to the affairs of the Company, particularly in light of the number of boards of directors on which such nominee may serve. •To the extent such nominee serves or has previously served on other boards, the nominee shall have a demonstrated history of actively contributing at board meetings. WeWhile we have no formal policy regarding board diversity.diversity, our Corporate Governance Guidelines and Nominating and Corporate Governance Committee charter provide that when evaluating proposed director candidates, the Nominating and Corporate Governance Committee (or any search firm acting under the direction of the Nominating and Corporate Governance Committee) shall consider the benefits of diversity, including diversity of thought, educational and professional background, gender, race, age, sexual orientation or ethnic and national background. Our priority in selection of board members is identification of members who will further the interests of our shareholders through consideration of a number of facts and circumstances, including among other things, the skills of the prospective director candidate, his or her depth and breadth of business experience or other background characteristics, his or her independence and the needs of the Board of Directors.Board.
The table below provides certain highlights of the composition of our Board members and nominees as of April 15, 2022.4, 2023. Each of the categories listed in the below table has the meaning as it is used in Nasdaq Rule 5605(f).
| | | | | | | | | | | | | | | | Board Diversity Matrix (As of April 15, 2022) | | Total Number of Directors | 9 | | Female | Male | Non‐Binary | Did Not Disclose Gender | | Part I: Gender Identity | | | Directors | 3 | 6 | | | | Part II: Demographic Background | | | | African American or Black | | 1 | | | | Alaskan Native or Native American | | | | | | Asian | | | | | | Hispanic or Latinx | | | | | | Native Hawaiian or Pacific Islander | | | | | | White | 3 | 5 | | | | Two or More Races or Ethnicities | | | | | | LGBTQ+ | | | Did Not Disclose Demographic Background | |
| | | | | | | | | | | | | | | | Board Diversity Matrix (As of April 4, 2023) | | Total Number of Directors | 9 | | Female | Male | Non‐Binary | Did Not Disclose Gender | | Part I: Gender Identity | | | Directors | 3 | 6 | | | | Part II: Demographic Background | | | | African American or Black | | 1 | | | | Alaskan Native or Native American | | | | | | Asian | | 1 | | | | Hispanic or Latinx | | | | | | Native Hawaiian or Pacific Islander | | | | | | White | 3 | 5 | | | | Two or More Races or Ethnicities | | 1 | | | | LGBTQ+ | | | Did Not Disclose Demographic Background | |
In addition, one director has identified as a military veteran. Shareholder Recommendations and Nominees Our Nominating and Corporate Governance Committee considers both recommendations and nominations for candidates to the Board from shareholders so long as such recommendations and nominations comply with our Articles of Association, Nominating and Corporate Governance Charter and applicable laws, including the rules and regulations of the SEC. Shareholders may recommend director nominees for consideration by the Nominating and Corporate Governance Committee by writing to our Company Secretary at the address below not less than 120 days prior to the date on which the Company’s proxy statement is released to shareholders in connection with the previous year’s annual meeting. Shareholder recommendations for director candidates must include the nominee’s name and address of record, a representation that the shareholder is a holder of the Company’s securities, as well as the nominee’s detailed biographical data and qualifications for board membership, information regarding any arrangements or understandings between the shareholder and the recommended candidate, the consent of the
proposed nominee to be named in the proxy statement and serve as a director if elected and any other information regarding the nominee that is required to be included in a proxy statement. Following verification of the shareholder status of the person submitting the recommendation, all properly submitted recommendations will be promptly brought to the attention of the Nominating and Corporate Governance Committee. Shareholders who desire to nominate persons directly for election to the Board at an annual general meeting of shareholders must meet the deadlines and other requirements set forth under “Additional Information —Shareholder Proposals.” Any vacancies on the Board of Directors occurring between our annual general meetings of shareholders may be filled by persons selected by a majority of the directors then in office, in which case any director so elected will serve until the next annual general meeting of shareholders when such director will offer himself/herself for re-election, or by persons elected by an ordinary resolution of the shareholders of the Company. You may write to the Nominating and Corporate Governance Committee at: c/o Ben Harber Company Secretary COMPASS Pathways plc 3rd Floor 1 Ashley Road, Altrincham Cheshire WA14 2DT United Kingdom Code of Business Conduct and Ethics
We have adopted a Code of Business Conduct and Ethics applicable to all of our directors, officers, employees and certain designated agents. The Code of Business Conduct and Ethics is available on the “Corporate Governance –Documents and Charters” section of our investor relations website at ir.compasspathways.com. We expect that any amendments to this code or any waivers of its requirements will be disclosed on our website. Shareholder Communication with the Board of Directors Our Board of Directors has implemented a process by which our shareholders or any interested parties may communicate with our Board as a whole or with individual members of our Board. Communications directed to our Board as a whole should be addressed to COMPASS Pathways plc 3rd Floor, 1 Ashley Road, Altrincham Cheshire WA14 2DT, United Kingdom Attn: Chair of the Board, of Directors, and communications directed to individual directors, including our Lead Independent Director, should be addressed to the attention of the individual director at the same address. Such communications may be made on an anonymous or confidential basis. All such communications received by the Company shall be delivered initially to the Company’s General Counsel, who shall review and maintain a log of all such communications. Directors may at any time review this log and request copies of any shareholder communication. Communications received will be promptly forwarded to the specified addressees thereof at the Company’s discretion. In general, communications relating to board and chief executive officer succession planning, corporate governance matters, executive compensation matters, general board oversight matters and long-term corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances, and matters as to which we tend to receive repetitive or duplicative communications. Any interested party with concerns about our company may report such concerns to the Board of Directors or the chairman of our Board and Nominating and Corporate Governance Committee by following the procedures described above. A copy of any such written communication may also be forwarded to our legal counsel and a copy of such communication may be retained for a reasonable period of time. The director may discuss the matter with our legal counsel, with independent advisors, with non-management directors, or with our management, or may take other action or no action as the director determines in good faith, using reasonable judgment, and applying his or her own discretion. Communications may be forwarded to other directors if they relate to important substantive matters and include suggestions or comments that may be important for other directors to know. The Audit and Risk Committee oversees the procedures for the receipt, retention, and treatment of complaints received by us regarding accounting, internal accounting controls or audit matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting, internal accounting controls or auditing matters. Any shareholder communications that include concerns or complaints regarding accounting, internal controls or auditing matters or potential violations of the federal securities laws or the Foreign Corrupt Practices Act will be handled in accordance with procedures adopted by the Audit and Risk Committee. We have also established a toll-free telephone number for the reporting of such activity, which is +1 877 306 1965 or +44 (0) 800 032 5911.
DIRECTOR COMPENSATION Under our Directors’ Remuneration Policy for Non-Executive Directors (“Director Compensation Policy”), the Board has the discretion to pay cash and equity fees to our non-executive directors for their Board and committee service. Our compensation arrangements for non-executive directors during 2021,2022, as set forth in our Director Compensation Policy, was comprised of an award of a fixed number of share options plus cash payment. Our Director Compensation Policy in 20212022 provided that each non-executive director will receive the following annual cash retainers for service on our Board: (a) £30,000 ($41,270)37,114) for each member, (b) £15,000 ($20,635)18,557) for the lead independent director, (increased from £10,000 from September 14, 2021), (c) £12,000 ($16,508)14,846) for the chair of the Audit and Risk Committee, (d) £8,000 ($11,005)9,897) for the chair of each of the Compensation and Leadership Development Committee and Innovation and Research Committee Chair, (e) £7,000 ($9,630) for the8,660) chair of the Nominating and Corporate Governance Committee, (increased from £6,000 from September 14, 2021), (f) £6,000 ($8,254)7,423) for each member of the Audit and Risk Committee, (g) £4,000 ($5,503)4,949) for each member of the Compensation and Leadership Development Committee, (h) £3,500 ($4,815)4,330) for each member of the Nominating and Corporate Governance Committee (increased from £3,000 from September 14, 2021) and (i) £4,000 ($5,503)4,949) for each member of the Innovation and Research Committee. Cash fees are paid to directors in GBP. All amounts have been converted from GBP to USD using the 20212022 average FX rate (£1:$1.3757)1.2371). Fees are reviewed on a periodic basis against those in similar sized companies to ensure they remain competitive and adequately reflect the time commitments and scope of the role. Supplemental fees, in addition to the Board member fees, are paid to recognize the additional time commitments and responsibilities of roles on our committees or the additional commitment of our independent director. Directors may receive limited travel or hospitality related benefits in connection with their duties. In addition to cash compensation, each non-executive director is eligible to receive share options under our equity incentive plans. We have historically awarded share options to certain non-executive directors in an amount determined at the discretion of the Board or Compensation and Leadership Development Committee. The value of all equity awards and cash compensation to any non-executive director in any calendar year for services as a non-executive director shall not exceed £750,000. We do not have a formal share ownership guideline policy for non-executive directors.
During 2021,2022, our Director Compensation Policy provided that each new non-executive director elected to our board of directorsBoard was granted an initial one-time equity award of options to purchase 24,00034,000 of our ADS on the date of such director’s initial election or appointment to the boardBoard. On June 16, 2022, the date of directors. In October 2021,our 2022 AGM, each ongoing non-executive director that continued to serve on the board (excluding any non-executive directors appointed in that year) was granted an option to purchase 12,00017,000 of our ADS, except for Mr. Riley who received an option to purchase 21,250 of our ADS. For boththe initial andgrants, options vest in 36 equal monthly installments, subject to continued service on the Board. For the annual grants, options vest 25% onin full upon the earlier to occur of the first anniversary of the date of grant date, with the remainder vesting in 36 equal monthly installments thereafter.
Going forward, annual awards to the non-executive directors will be made onor the date of the next Annual Meeting, subject to continued service on the Board.
Beginning June 2023, our revised Director Compensation Policy will provide for the payment of cash fees in U.S. dollars for all non-executive directors, other than the Board Chair, and to increase the option awards for our non-executive directors. Under the revised Director Compensation Policy, each non-executive director will receive the following cash retainers for service on our Board: (a) £80,000 for our Board Chair, (b) $40,000 for each member, (c) an additional $20,000 for our lead independent director, (d) $16,000 for the chair of the Audit and Risk Committee, (e) $12,000 for the chair of each of the Compensation and Leadership Development Committee and Innovation and Research Committee, (f) $10,000 for the chair of our Nominating and Corporate Governance Committee, (g) $8,000 for each member of our Audit and Risk Committee, (h) $6,000 for each member of the Compensation and Leadership Development Committee and the Innovation and Research Committee, and (i) $5,000 for each member of our Nominating and Corporate Governance Committee. The initial equity award will be increased to 52,000 options and the annual general meeting of shareholders, with the grant guidelines amended, as appropriate, based on market researchequity awards will be increased to 39,000 options for our Board Chair and advice from its compensation consultant.26,000 options for our other non-executive directors. The table below shows the compensation paid to our non-executive directors during the year ended December 31, 2021.2022. Mr. Goldsmith, Mr. Nath and Dr. Malievskaia did not receive compensation for service on the Board and the compensation paid to Mr. Goldsmith, Mr. Nash and Dr. Malievskaia as employees of the Company are set forth under the heading “Named Executive Officer Compensation—Summary Compensation Table” below. As a U.K.-incorporated company, we have received shareholder approval at our AGM in 20212022 for our U.K. statutory directors’ remuneration report, which includes a directors’ remuneration policy for our executive and non-executive directors.
| | | | Fees | | | | | | | Fees | | | | | | | | Earned or | | | | | | | Earned or | | | | | | | | Paid in | | Option | | | | | Paid in | | Option | | | | | | Cash | | Awards | | Total | | | Cash | | Awards | | Total | | Name | Name | | ($) | | ($) (1) (2) | | ($) | Name | | ($) | | ($) (1) (2) | | ($) | | David Norton (4) | | David Norton (4) | | 60,620 | | 112,479 | | 173,099 | Jason Camm (3) | Jason Camm (3) | | — | | — | | — | Jason Camm (3) | | — | | — | | — | Annalisa Jenkins (4) | Annalisa Jenkins (4) | | 66,032 | | 213,201 | | 279,233 | Annalisa Jenkins (4) | | 59,382 | | 112,479 | | 171,861 | | Thomas Lönngren | Thomas Lönngren | | 49,535 | | 213,201 | | 262,736 | Thomas Lönngren | | 45,692 | | 112,479 | | 158,171 | | Robert McQuade | | Robert McQuade | | 54,434 | | 112,479 | | 166,913 | | Linda McGoldrick | Linda McGoldrick | | 62,077 | | 213,201 | | 275,278 | Linda McGoldrick | | 56,290 | | 112,479 | | 168,769 | | Robert McQuade | | 60,529 | | 213,201 | | 273,731 | | David Norton (4) | | 62,249 | | 213,201 | | 275,450 | | Wayne Riley (5) | | 38,531 | | 513,823 | | 552,354 | | Florian Brand (6) | | 13,119 | | 99,374 | | 112,493 | | | Wayne Riley(5) | | Wayne Riley(5) | | 46,393 | | 140,599 | | 186,992 |
(1) The amount reported represents the aggregate grant date fair value of share options awarded to our non-employee directors during the 20212022 fiscal year, calculated in accordance with FASB, ASC Topic 718. Such grant date fair value does not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value of the share option reported in this column are set forth in Note 11 in our annual report on Form 10-K filed with the SEC on February 24, 2022.28, 2023. The amount reported in this column reflects the accounting cost for these share option awards and does not correspond to the actual economic value that may be received by the directors upon the exercise of the share options or any sale of the shares. (2) At December 31, 2021,2022, the Directors owned the following number of outstanding and unexercised share options: Annalisa Jenkins (132,474)(149,475), Thomas Lönngren (72,095)(89,095), Linda McGoldrick (33,584)(50,584) Robert McQuade (33,584)(50,584), David Norton (147,404),(164,404) and Wayne Riley (24,000) and Florian Brand (5,396)(45,250). Jason Camm had no options outstanding and unexercised on December 31, 2021.2022. (3) On February 1, 2021, Mr. Camm permanently waived any and all compensation which he was entitled to receive during the year ended December 31, 2021.2022. Mr. Camm's service on the board ended on June 16, 2022, the date of the 2022 AGM. (4) At December 31, 2021,2022, Annalisa Jenkins held 16,32110,386 unvested restricted share units, or RSUs, and David Norton held 16,32110,386 unvested RSUs. At December 31, 20212022 no other Non-Executive Director held RSUs. (5) WayneMr. Riley was appointed as Director, effectivejoined the Board in March 2021 and received his initial equity award. As he did not receive an annual equity award at our 2021 AGM, his 2022 annual equity award included an additional number of shares covering the three- month period from March 31, 2021.2022 until June 2022 . (6) On May 14, 2021, Florian Brand resigned from his position as a director.
EXECUTIVE OFFICERS OF THE COMPANY Below is a list of our executive officers and their positions and ages as of the date of April 19, 2022.4, 2023. George Goldsmith and Ekaterina Malievskaia are married and serve on our Board. There is no arrangement or understanding between any executive officer and any other person pursuant to which the executive officer was selected. | | | | | | | | | | | | | | | | | Name | | Age | | Position | George GoldsmithKabir Nath | | 6658 | | Chief Executive Officer, Chair of our BoardDirector | | Michael Falvey | | 6364 | | Chief Financial Officer | | Guy Goodwin | | 7475 | | Chief Medical Officer | | Ekaterina Malievskaia | | 5556 | | Chief Innovation Officer, Director | | Matthew Owens | | 4445 | | General Counsel and Chief Legal Officer |
For biographical information regarding Mr. GoldsmithNath and Dr. Malievskaia, see the section titled “Board of Directors and Corporate Governance.” Michael Falvey has served as our Chief Financial Officer since January 2022. Mr. Falvey was the Chief Financial Officer of Karyopharm Therapeutics between September 2017 and January 2019. Prior to Karyopharm Therapeutics, Mr. Falvey served as Chief Financial Officer at several other high-growth companies including Seven Bridges Genomics from August 2016 to June 2017 and Analysis Group from July 2010 to April 2016. Prior to joining Analysis Group, Mr. Falvey served as Chief Financial Officer of Ahura Scientific and Aspect Medical Systems, and as Vice-President, Finance, at Millennium Pharmaceuticals Inc. In addition to his healthcare experience, Mr. Falvey held financial management positions with Fidelity Investments, Digital Equipment Corporation and General Electric. Mr. Falvey earned a Master of Science in Management from the Sloan School of Management at the Massachusetts Institute of Technology and a Bachelor of Science from Georgetown University’s School of Foreign Service. Guy Goodwin has served as our Chief Medical Officer since August 2021. Dr. Goodwin currently serves as Emeritus Professor of Psychiatry at The University of Oxford, where he has been a professor of psychiatry since October 1996. Additionally, Dr. Goodwin served as Medical Director at P1vital, where he worked between April 2018 and July 2021. Dr. Goodwin previously served as WA Handley Chair of Psychiatry and Head of the University of Oxford’s Department of Psychiatry. Dr. Goodwin is a Fellow of the American College of Neuropsychopharmacology, and former President of the British Association for Psychopharmacology and of the European College of Neuropsychopharmacology. Dr. Goodwin received his BA, DPhil, BM, and BCh from the University of Oxford. Matthew Owens has served as our General Counsel and Chief Legal Officer since February 2022. Prior to joining the Company, Mr. Owens served as Global Head Legal, Digital at Novartis International AG, beginning in January 2018. He has served in various positions with Novartis since 2010, also serving as Senior Legal Counsel, and as Head Legal, Strategic Partnerships and Digital. Prior to Novartis, he was Senior Counsel at Solvay Pharmaceuticals, and Corporate Counsel at Mettler-Toledo. He holds a Bachelor of Arts (Pre-Law & Political Science, History & Criminology) from Capital University, Columbus, Ohio, and a Juris Doctorate from Capital University Law School where he was a Presidential Scholar. He ispreviously was a lecturer at the University of Zurich Law School’s Europa Institute.
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS This Executive Compensation Discussion and Analysis (“CD&A”)section describes our executive compensation program and the 20212022 compensation awarded to, earned by, or paid to each individual who served as our principal executive officer for the year ended December 31, 2022, or fiscal year 2022, and our next two most highly compensated executive officers in respect of their service to our company for fiscal year 2022. We refer to these individuals as our named executive officers (“NEOs”).officers. This CD&AExecutive Compensation section should be read with the compensation tables and related disclosures for our NEOs.named executive officers. Our NEOsnamed executive officers for 2021*2022 were as follows: •George Goldsmith, our Chairman and former Chief Executive Officer; •Guy Goodwin,Kabir Nath, our Chief MedicalExecutive Officer (joined August 2021);and a Director; •Ekaterina Malievskaia, our Chief Innovation Officer; •Piers Morgan, our former Chief Financial Officer;Information Officer and a Director; and
•Nate Poulsen,Matthew Owens, our former General Counsel & Chief Legal Officer.Officer and General Counsel. *Nate Poulsen ceased to be an executive officer in October 2021 and left the organization in December 2021. Piers Morgan ceased to be an executive officer upon his departure on December 31, 2021.
This CD&AExecutive Compensation section describes the material elements of our executive compensation program during 2021.2022. It also provides an overview of our executive compensation philosophy and objectives. Finally, it discusses how the Compensation and Leadership Development Committee of our Board of Directors arrived at the specific compensation decisions for our executive officers, including our NEOs,named executive officers, for 2021,2022, including the key factors that our Compensation and Leadership Development Committee considered in determining their compensation. EXECUTIVE SUMMARY Business Overview We are a clinical-stage, mental health care company dedicated to accelerating patient access to evidence-based innovation in mental health. Our initial focus is on treatment-resistant depression, or TRD, a subset of major depressive disorder, or MDD, comprising patients who are inadequately served by the current treatment paradigm. In 2021, we completed a2022, the results from our large-scale randomized, controlled, double-blind Phase IIb2b clinical trial of our COMP360 psilocybin therapy in 233 patients suffering with TRD in 22 sites in 10 countries in North America and Europe. This is the largest psilocybin trial completed to date. We completed our IPO in September 2020. From that time through December 31, 2021, we were a “foreign private issuer” within the meaning of the Exchange Act, and an “emerging growth company” as definedpublished in the Jumpstart Our Business Startups Act New England Journal of 2012, as amended. Effective January 1, 2022, we no longer meet those designations andMedicine. We commenced our Phase 3 clinical program in TRD, consisting of two pivotal trials, which are instead subject to the reporting and other requirements applicable to U.S. domestic issuers and “large accelerated filers” as defined in Rule 12b-2 of the Exchange Act. As a U.S. domestic issuer and large accelerated filer, we have increased U.S. disclosure obligations regarding executive compensation and are required to file for the first timePhase 3 trials of a proxy statement pursuant to Section 14(a) of Exchange Act, including this CD&A, and hold for the first time a non-binding advisory vote on executive compensation.psilocybin agent.
Corporate Performance Highlights We have made substantial progress during 2021,2022, including: Positive results from ground-breaking phase IIb clinical trial ofAdvanced COMP360 psilocybin therapy for TRD, despite the ongoing challenges posed by the COVID-19 pandemic:TRD:
•Positive results from ground-breaking phase IIbPhase 2b clinical trial in TRD were published in the New England Journal of Medicine •Additional data showing patient improvements beyond reduction of depression symptoms •Positive results from open-label study of 25mg COMP360 psilocybin therapy as adjunct to SSRI antidepressants in treatment-resistant depression
•End-of-phase IIHeld end-of-phase 2 meeting scheduled with the U.S. Food and Drug Administration for late April
•Transitioned to a Phase III3 company and launched a Phase 3 program expected to begin in second halfTRD - the first ever Phase 3 program of 2022psilocybin, a unique achievement
Additional COMP360 development programs: •Launched a Phase II trial2 program in post-traumatic stress disorder launched at Kings College Londonanorexia nervosa, an area of critical unmet need with no FDA-approved pharmaceutical treatments available and high mortality rate for patients suffering from anorexia nervosa •Positive results reported from two investigator-led clinical initiatives in severe TRD, anorexia nervosa, bipolar 2 and major depressive disorder one of which has been published in The New England Journal of Medicine •Additional investigator-initiated studies ongoing in multiple indications Significantly strengthened our balance sheet through:Pipeline development:
•CompletedProgressed development of our artificial intelligence model and authored an article titled Psilocybin Therapy for Treatment Resistant Depression: Prediction of Clinical Outcome by Natural Language Processing, which we have shared openly and submitted to a follow-on offering of American Depositary Shares, raising $154.8m Pipeline development:
•Development of new product candidates through exclusive research project with Dr. Matthias Grill of MiHKAL GmbH, complementing work being done at COMPASS's Discovery Center
Commercial exclusivity and intellectual property:
•10 granted patents issued to-date covering composition, formulation, and method of usejournal for publication
•Several additional filings completedOngoing research on prodrug development has led to a number of potential candidate leads being identified that we plan to continue through further research based development Prepare for successful and scalable commercial launch of COMP360 to ensure broad patient access: •Progress towards issuance by the American Medical Association of new CPT III codes, which are a type of reimbursement code assigned to emerging technologies, services and procedures, to facilitate reimbursement for the psychological support that we anticipate would accompany administration of COMP360, if regulatory approval is obtained •Pioneering collaboration with King’s College London and South London and Maudsley NHS Foundation Trust to create The Center for Mental Health Research and Innovation in the U.K.
•Launched retrospective real world evidence studies
OVERVIEW OF EXECUTIVE COMPENSATION PROGRAM Executive Compensation Philosophy Our executive compensation program is guided by our overarching philosophy of paying for performance. Consistent with this philosophy, we have designed our executive compensation program with the following principles in mind: | | | | | | | | | | | | | | • | | Attract, retain, and motivate high caliber executive talent and focus them on the delivery of the Company’s strategic and business objectives; | | • | | Be competitive against appropriate market benchmarks and have a strong link to performance, providing the ability to earn above-market rewards for strong performance; | | • | | Be simple and understandable, both internally and externally; | | • | | Encourage increased equity ownership to motivate executives in the overall interests of shareholders, the Company, employees and customers; and | | • | | Take due account of good governance and promote the long-term success of the Company. |
Executive Compensation Program Design Our executive compensation program is designed to be reasonable and competitive, and balance our goal of attracting, motivating, rewarding and retaining top-performing senior executives with our goal of aligning their interests with those of our shareholders. The Compensation and Leadership Development Committee annually evaluates our executive compensation program to ensure that it is consistent with our short-term and long-term goals and market competitive practices. Our executive compensation program consists of a mix of compensation elements that balance achievement of our short-term goals with our long-term performance. We provide short-term incentive compensation opportunities in the form of annual cash bonuses, which focus on our achievement of annual goals. We also provide long-term incentive compensation opportunities in the form of equity awards. We provide a combination of share options with an exercise price equal to fair market value, or "market-priced" options and full-value awards which have historically primarily been in(in the form of restricted share units for U.S. taxpayers and options with an exercise price equal to the nominal value of a share, or nominal cost options for non-U.S. taxpayers) and which focus executive attention on our long-term performance. We believe that market-priced share options provide a strong reward for growth in the market price of our shares because their entire value depends on future share price appreciation. In connectionWe believe that restricted share units and nominal cost options are important elements of a competitive compensation program from a retention perspective, as the companies with our IPO in 2020,whom we grantedcompete for talent typically offer a combination of share options to our executive team, which were intended to serve as our long-term equity compensation throughout the duration of 2021. As such, we did not issue any additional equity awards to ongoing executives in 2021 and our 2022 awards will serve as the first regular cycle of annual equity grants as a publicly traded company. We did, however, offer a sign-on option award to our newly appointed Chief Medical Officer in the year.
Our executive compensation program is also designed to incorporate sound practices for compensation governance. Below we summarize such practices.
What We Do: | | | | | | | | | | | ✓ | Maintain an Independent Compensation and Leadership Development Committee. The Compensation and Leadership Development Committee consists solely of independent directors. |
| | | | | | | | | | | ✓ | Retain an Independent Compensation Advisor. The Compensation and Leadership Development Committee engages its own compensation advisor to provide information and analysis related to annual executive compensation decisions, including the 20212022 executive compensation decisions, and other advice on executive compensation independent of management. |
| | | | | | | | | | | ✓ | Review Executive Compensation Annually. The Compensation and Leadership Development Committee annually reviews our compensation strategy, including a review and determination of our compensation peer group used for comparative purposes. |
| | | | | | | | | | | ✓ | Design Compensation At-Risk. Our executive compensation program is designed so that a significant portion of our executive officers’ compensation is “at risk” based on our corporate performance, as well as equity-based, to align the interests of our executive officers and shareholders. |
| | | | | | | | | | | ✓ | Use a Pay-for-Performance Philosophy. The majority of ourOur executive officers’ compensation is directly linked to corporate performanceachievement of company goals and includes a significant long-term equity component, thereby making a substantial portion of each executive officer’s total compensation dependent upon our share price. |
What We Don’t Do: | | | | | | | | | | | ✗ | No Executive Retirement Plans. We do not offer pension arrangements or retirement plans or arrangements to our executive officers that are different from or in addition to those offered to our other employees. |
| | | | | | | | | | ✗ | Limited Perquisites. We provide limited perquisites and other personal benefits to our executive officers.
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| | | | | | | | | | ✗ | No Special Health and Welfare Benefits. Our executive officers participate in our health and welfare benefits programs on the same basis as our other employees.
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| | | | | | | | | | | ✗ | No Post-Employment Tax Payment Reimbursement. We do not provide any tax reimbursement payments (including “gross-ups”) on any change-in-control or severance payments or benefits. |
| | | | | | | | | | ✗ | No Hedging or Pledging. Our Insider Trading Policy prohibits our executive officers, the non-employee members of our Board and certain designated employees from hedging or pledging our securities, or engaging in short sales or trading in standardized options related to our securities. |
“Say-on-Pay” Vote on Executive Compensation In prior years,Annually, at our general meeting of shareholders, we were both a “foreign private issuer” and an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended; therefore, we were not required to hold a non-binding advisory vote on the compensation of our NEOs (a “Say-on-Pay” vote). At this AGM, we will hold our first Say-on-Pay vote. Our Board of Directors and Compensation Committee will consider the result of the Say-on-Pay vote, and the related vote on the frequency of whichregarding the compensation of our named executive officers, is submittedwhich we refer to as say-on-pay. The Compensation and Leadership Development Committee has considered and will continue to consider the outcome of such say-on-pay votes, including the percentage of votes cast in favor and against the say-on-pay proposal, when making future compensation decisions for our named executive officers. The Compensation and Leadership Development Committee also relies on advice from its compensation consultants, its evaluation of Company performance against pre-defined corporate goals, its understanding of the challenges facing the Company and its observations of executive officer performance to determine executive officer compensation.
At our 2022 AGM, the non-binding advisory vote of shareholders supported the compensation of the named executive officers identified in our 2022 proxy statement by 99.7% of the votes cast at the meeting. These votes for a vote (a “and against the say-on-pay proposal, together with available feedback from investors, have been and will continue to be considered by the Compensation and Leadership Development Committee Say-on-Frequency” vote), when making compensation decisions for our executive officers in the future because we value the opinions.
As a U.K.-incorporated company, we have received shareholder approval at our AGM in 2021 for our U.K. statutory directors’ remuneration report,Directors’ Remuneration Policy which includes a directors’ remuneration policy forapplies to our executive and non-executive directors. This binding policy is in effect for three years and covers allowable compensation for twoour current and future executive and non-executive directors. Our Directors' Remuneration Policy applies to three of our NEOs,named executive officers, Mr. Goldsmith, our CEO,current Chairperson and former Chief Executive Officer, Mr. Nath, our current Chief Executive Officer, and Dr. Malievskaia our CIO, bothChief Innovation Officer, each of whom were executive directors of the Company
during 20212022 and will continue to serve on our Board of Directors for 2022. In 2021,2023, subject to re-election of Mr. Goldsmith and Mr. Nath at this annual general meeting of shareholders. In 2022, Mr. Goldsmith, Mr. Nath and Dr. Malievskaia did not receive compensation for their service on our Board. Among other things, our directors’ remuneration policyDirectors’ Remuneration Policy sets a cap on the annual bonus payable to an executive director at 125% of the target bonus level and limits the pension contribution or cash supplement payable by the Company to 3% of salary for the U.K.-based executive directors, in line with the wider workforce.workforce, which generally has a 3% pension contribution, but may be up to 8%. Mr. Nath joined us in 2022 and is eligible to participate in our 401(K) retirement plan on the same terms as our U.S. based employees, including the company match of up to 4% of salary, subject to statutory limitations on contributions. Governance of Executive Compensation Program Role of the Compensation and Leadership Development Committee and the Board of Directors Our Compensation and Leadership Development Committee, which is comprised entirely of independent directors, is responsible for discharging our Board of Directors’Board’s responsibilities relating to compensation of our directors and executives, overseeing our overall compensation structure, policies and programs, and reviewing our processes and procedures for the consideration and determination of director and executive compensation. The Compensation and Leadership Development Committee’s approach to remuneration matters is to enable the Company to attract and retain talent, incentivize long-term value generation, and effectively manage the Company’s cash resources. It is the belief of the Compensation and Leadership Development Committee that this is best achieved through a greater emphasis on variable rather than fixed remuneration, comprised of a mix of base salary and benefits, along with the flexibility to appropriately reward and incentivize with variable pay and long-term incentives. Our Compensation and Leadership Development Committee has the authority to retain, at our expense, one or more third-party compensation consultants to assist the Compensation and Leadership Development Committee in performing its responsibilities. At the beginning of the year, the Compensation and Leadership Development Committee reviews and recommends, in the case of our Executive Chair and our Chief Executive Officer, and approves, in the case of our other named executive officers, the primary elements of compensation—base salary increases, cash bonus targets, and annual equity awards—for our NEOs,awards, as authorized by the Board of Directors pursuant to the Compensation and Leadership Development Committee charter. In addition, the Compensation and Leadership Development Committee may deem it advisable to review and approve subsequent compensation opportunities for our executive officers, including our NEOs.named executive officers. Compensation-Setting Factors When reviewing and approving the amount of each compensation element and the target total compensation opportunity for our executive officers, the Compensation and Leadership Development Committee considers the following factors: the Company’s performance during the year, based on business and corporate goals and priorities established by the Chief Executive Officer (“CEO”) and the Board of Directors; each executive officer’s skills, experience and qualifications relative to other similarly-situated executives at the companies in our compensation peer group; the scope of each executive officer’s role compared to other similarly-situated executives at the companies in our compensation peer group; the performance of each individual executive officer, based on an assessment of their contributions to our overall performance, ability to lead their department and work as part of a team, all of which reflect our values;
compensation parity among our executive officers; the dilutive impact of equity awards;
general economic and market conditions and rate of inflation; changes in the size and complexity of the Company as we transitioned to a Phase 3 clinical development company and prepare to transition from a clinical-stage company to a fully integrated biotechnology company in anticipation of our first product launch; the expectations of institutional shareholders and any specific feedback received from shareholders; the recommendations provided by the CEOChief Executive Officer with respect to the compensation of our executive officers, other executive officers.than our Executive Chair and our Chief Executive Officer. These factors provide the framework for compensation decisions for each of our executive officers, including our NEOs.named executive officers. The Compensation and Leadership Development Committee and the Board, of Directors, as applicable, do not assign relative weights or rankings to these factors, and do not consider any single factor as determinative in the compensation of our executive officers. Rather, the Compensation and Leadership Development Committee and the Board, of Directors, as applicable, rely on their own knowledge and judgment in assessing these factors and making compensation decisions. Our CEO doesDuring the time Mr. Goldsmith served as our Executive Chair and Chief Executive Officer, he did not make recommendations to our Compensation and Leadership Development Committee or participate in the Compensation and Leadership Development Committee’s deliberations
concerning his own compensation nor the compensation of Dr. Malievskaia, our CIO,Chief Innovative Officer, because of their spousal relationship. Our Chief Executive Officer, Mr. Nath does not participate in the Compensation and Leadership Development Committee's deliberations concerning his own compensation. Role of Management In discharging its responsibilities, the Compensation and Leadership Development Committee works with management, including our CEO.Chief Executive Officer. Our management assists the Compensation and Leadership Development Committee by providing information on corporate and individual performance, market compensation data and management’s perspective on compensation matters. In addition, at the beginning of each year, our CEOChief Executive Officer reviews the performance of our other executive officers, including our other NEOs (other than our CIO, as discussed above),named executive officers based on our achievement of our corporate goals and each executive officer’s overall performance during that year. The Compensation and Leadership Development Committee solicits and reviews our CEO’sChief Executive Officer’s recommendations for base salary increases, annual cash bonuses, annual equity awards and any other compensation opportunities for our other executive officers, including our other NEOs (other than our CIO),named executive officers, and considers our CEO’sChief Executive Officer’s recommendations in determining such compensation. As discussed above, while Mr. Goldsmith served as our Chief Executive Officer during 2022, he did not review the performance of our Chief Innovation Officer nor recommend any base salary increases, annual cash bonuses, annual equity awards and any other compensation opportunities for our Chief Innovation Officer. Role of Compensation Consultant The Compensation and Leadership Development Committee engages an external compensation consultant to assist it by providing information, analysis and other advice relating to our executive compensation program. For 2021,2022, the Compensation and Leadership Development Committee engaged Aon as its independent compensation consultant to advise on executive compensation matters including: review and analysis of the compensation for our executive officers, including our NEOs;named executive officers; research, development and review of our compensation peer group; and support on other compensation matters as requested throughout the year.
Aon reports directly to the Compensation and Leadership Development Committee and to the Compensation and Leadership Development Committee chair. Aon also coordinates with our management for data collection and job matching for our executive officers. The Compensation and Leadership Development Committee reviewed its relationship with Aon and considered Aon’s independence in light of all relevant factors, including those set forth in the Exchange Act and in applicable Nasdaq listing rules. The Compensation and Leadership Development Committee concluded that the work performed by Aon and Aon’s senior advisors involved in the engagements did not raise any conflict of interest. In reaching these conclusions, our Compensation and Leadership Development Committee considered the factors set forth in the SEC rules and the applicable Nasdaq rules. Role of Market Data For purposes of comparing our executive compensation against the competitive market, the Compensation and Leadership Development Committee reviews and considers the compensation levels and practices of a group of peer companies. This compensation peer group consists of public biotechnology companies that are similar to us in terms of market capitalization, stage of development and number of employees. As a Nasdaq-listed health care company with operations in the United StatesU.S. and Europe, we operate within a global marketplace for talent. Given that the market for experienced health care executive talent is competitive, particularly in the United States,U.S., the Compensation and Leadership Development Committee references the U.S. market as the leading indicator for remuneration levels and practices. The Committee also considers the general U.K. compensation frameworks when making decisions on executive compensation. The Compensation and Leadership Development Committee reviews our compensation peer group annually and makes adjustments to our peer group if necessary, taking into account changes in both our business and our peer companies’ businesses. The Compensation and Leadership Development Committee also uses market data—from our compensation peer group and from a life sciences cut of the Radford Global Compensation Database—as one factor in evaluating whether the compensation for our executive officers is competitive in the market. The Compensation and Leadership Development Committee and the Board, of Directors, as applicable, also rely on their own knowledge and judgment in evaluating market data and making compensation decisions. To determine the composition of the peer group for 2021, which was established in connection with2022, the IPO in July 2020, the Compensation and Leadership Development Committee considered the following criteria: publicly-traded companies listed in the United States (including both U.S.-headquartered and European-headquartered companies), with a preference towards companies with a recent IPO (i.e., within the past five years); companies in the pre-commercial biotechnology or health care technology sectors, with preference towards mental health care and healthcare technology platform companies, as appropriate;
similar market capitalization—within a range of approximately 0.33x to approximately 3.0x our anticipated market capitalization at IPO;in mid-2021; the stage of development of each company’s development candidates;candidates, with a focus on companies with Phase 2 clinical programs (our stage of development in mid-2021); and similar headcount—within a range of 2530 to 250300 employees based on our then headcount of roughly 5090 full-time employees. This analysis led to the selection of the following peer group which was used to make the relevant compensation assessments for 20212022 for purposes of establishing 20212022 annual base salary, and target bonus and equity awards for our NEOs. We alsonamed executive officers and used thethis peer group market data to determine at-IPO equity awards we made tosupport our NEOs in 2020, which served asnegotiations with our long-term incentive compensation for 2021.new executive officers, our Chief Executive Officer and our Chief Legal Officer and General Counsel, who were hired during 2022. 20212022 Compensation Peer Group
| | | | | | | | | | | | | | | AC Immune SA | CareDx, Inc. | Orchard Therapeutics plc | | Adaptimmune Therapeutics plc | Constellation Pharmaceuticals, Inc. | Prothena Corporation plc | | Applied Molecular Transport | Crinetics Pharmaceuticals, Inc. | PureTech Health | | Arcus Biosciences, Inc. | Intra-Cellular Therapies, Inc. | Replimmune Group, Inc. | | ATAI Life Sciences SA | Karuna Therapeutics, Inc. | Rocket Pharmaceuticals, Inc. | | Autolus Therapeutics plc CareDx, Inc.
Constellation Pharmaceuticals, Inc.
Crinetics Pharmaceuticals, Inc.
| | Fulgent Genetics, Inc.
Livongo Health, Inc.
Magenta Therapeutics, Inc. Merus N.V.
Myovant Sciences Ltd.
NantHealth, Inc.
NextCure, Inc.
| | Orchard Therapeutics plc
Replimmune Group
Rocket Pharmaceuticals, Inc.
Scholar Rock Holding Corporation Syros Pharmaceuticals,
| | Axsome Therapeutics, Inc. | Merus N.V. | Translate Bio, Inc. | | Bicycle Therapeutics plc | Myovant Sciences Ltd. | Y-mAbs Therapeutics, Inc; | Fulcrum Therapeutics, Inc. | | | | |
PRIMARY ELEMENTS OF EXECUTIVE COMPENSATION PROGRAM The primary elements of our executive compensation program are:base salary; short-term incentive compensation in the form of annual cash bonuses; and long-term incentive compensation in the form of annual equity awards. Our executive officers, including our NEOs,named executive officers, are also eligible to participate in our standard employee benefit plans, such as our health and welfare benefits plans, and defined contribution retirement plans on the same basis as our other employees.employees in the U.S. or U.K., as applicable. In addition, as described below, our executive officers, including our NEOs,named executive officers, are entitled to certain change-in-control severance payments and benefits pursuant to their employment agreements, described herein. Base Salary We pay base salaries to our executive officers, including our NEOs,named executive officers, to provide a market competitive fixed remuneration that reflects the responsibilities of the role undertaken, the experience of the individual, and their performance in the role over time. At the time of hire, base salaries are determined for our executive officers, including our NEOs,named executive officers, based on the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above. With the exception of 2021 (as described below), typically,Typically, at the beginning of each year, the Compensation and Leadership Development Committee reviews base salaries for our executive officers, including our NEOs,named executive officers, based on such factors to determine if an increase is appropriate. In addition, base salaries may be adjusted in the event of a promotion or significant change in responsibilities. 20212022 Annual Base Salary
In September 2020, upon completion of our IPO,January 2022, the Compensation and Leadership Development Committee implemented market-basedbase salary adjustments to reflect our status as a newly-public company. As competitiveincreases of 2% for the named executive officers, who were employed at that time, after considering rising inflation rates. Each of Mr. Nath's and Mr. Owen's base salaries were implementeddetermined through negotiations when they were hired. | | | | | | | | | | | | Named Executive Officer (1) | 2021 Annual
Base Salary | 2022 Annual
Base Salary | Percentage
Increase | | Kabir Nath(2) | $— | $580,000 | N/A | | George Goldsmith (3) | $525,768 | $536,283 | 2.0% | | Matthew Owens(4) | $— | $371,130 | N/A | | Ekaterina Malievskaia | $371,130 | $378,553 | 2.0% |
(1) All amounts, except those for Mr. Nath, have been converted from GBP to USD using the 2022 average FX rate (£1:$1.2371). (2) Kabir Nath was appointed as our Chief Executive Officer effective August 1, 2022, with his base salary established at that time in the latterU.S. dollars. (3) In connection with his transition to Executive Chair effective August 1, 2022, Mr. Goldsmith's base salary was adjusted to £346,800 ($429,026). (4) Matthew Owens was appointed as our Chief Legal Officer and General Counsel effective February 1, 2022, with his
half of 2020 in connection with the IPO, the Compensation Committee did not approve any additional increases for 2021, with base salaries for the NEOs remaining at the same levels as were approved at IPO.
| | | | | | | | | | | | Named Executive Officer (1) | 2020 Post-
IPO Annual
Base Salary | 2021 Annual
Base Salary | Percentage
Increase | | George Goldsmith | $584,658 | $584,658 | 0.0% | | Piers Morgan | $440,213 | $440,213 | 0.0% | | Ekaterina Malievskaia | $412,700 | $412,700 | 0.0% | | Nate Poulsen | $370,000 | $370,000 | 0.0% | Guy Goodwin (2) | N/A | $446,335 | N/A |
(1) All amounts, except those for Mr. Poulsen, have been converted from GBP to USD using the 2021 average FX rate (£1:$1.3757).
(2) Guy Goodwin was appointed as our Chief Medical Officer in July 2021, with an August 2021 start date, and his base salary was established at that time.
The actual base salaries paid to our NEOsnamed executive officers in 20212022 are set forth in the “Summary Compensation Table” below. Short-Term Incentive Compensation Annual Cash Bonuses We provide short-term incentive compensation opportunities to our executive officers, including our NEOs,named executive officers, in the form of annual cash bonuses to incentivize and award delivery of the Company’s strategy and corporate objectives on an annual basis. For 2021,2022, we focuseddetermined annual cash bonuses based on a review of our overall corporate performance to determine the cash incentives of our CEO and after discussion with management, other NEOs, with some discretion applied based on individual achievements in the year. Going forward, for 2022, we will incorporate a distinct individual performance assessment for each of the NEOs beyond the CEOnamed executive officers to recognize their individual and team objectives within their respective functional areas. Performance Goals At the beginning of each year, the Board of Directors discusses with the CEOChief Executive Officer the annual corporate performance objectives that are intended to be the most significant drivers of our short-term and long-term success. After the end of the relevant financial year, the Compensation and Leadership Development Committee assesses the results of the corporate goals, reviews management’s self-assessment, evaluates specific achievements that advanced the prior year’s corporate objectives, and determines our overall success in the prior year. The Compensation and Leadership Development Committee considers our CEO’sChief Executive Officer’s recommendations, and independently reviews and approves the total percentage achievement level for each of the other NEOs.named executive officers. Target Annual Bonuses At the time of hire, the target annual bonus is determined for each of our NEOs,named executive officers, and at the beginning of each year, the Compensation and Leadership Development Committee reviews and determines whether to change the target annual bonus for each such individual. The Compensation and Leadership Development Committee considers the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above, with an emphasis on market data from our compensation peer group for comparable positions. Target annual bonuses represent a specific percentage of annual base salary. At the time of our IPO, we adjusted our targets based on a review of peer public companies. Each year, we evaluate our target annual bonuses relative to our executive peer group and adjust the targets, as appropriate, to stay aligned with our compensation philosophy. The last undertaking of this analysis occurred around the time of our IPO in September 2020, whenIn January 2022, we adjusted Mr. Goldsmith’s target from 50%55% to 55%,60%. Dr. Malievskaia’s target from 40% toremained at 45%,. Each of Mr. Morgan’s target from 50% to 45%,Nath's and Mr. Poulsen’sOwen's target from 33% to 35%. We expect to undertake a further analysis this year.bonus for 2022 (60% and 40% of base salary, respectively) was established through negotiations when they were hired.
20212022 Annual Cash Bonuses
The 20212022 corporate goals and achievements are set forth below. The Compensation and Leadership Development Committee determines the range of our corporate performance from a threshold of 50% to a maximum of 125%. No bonus is paid to any executive officer unless 50% of the corporate goals are achieved. Corporate Goals and Achievements
Advance COMP360 for TRD: Prepare for a successful end-of-phase 2b meeting and a prompt launchTRD into Phase 3 trials – In November 2022, The New England Journal of phase 3 – Results ofMedicine, the world’s leading peer-reviewed medical journal, published the positive results from our Phase 2b study were delivered on timetrial of COMP360 psilocybin therapy for treatment resistant depression, or TRD. We transitioned to a Phase 3 company and as planned, despitelaunched a Phase 3 program in TRD, the uncertainties linked tofirst ever Phase 3 program of psilocybin, a unique achievement. We received Innovative Licensing and Access Pathway (ILAP) designation in the pandemic. We conducted a comprehensive regulatory engagement with the FDA and various European agencies, while ensuring operational readiness for Phase 3.U.K.
Build outAdvance Phase 2 trials of COMP360 for Anorexia Nervosa and PTSD – We launched our Phase 2 trial in anorexia nervosa, an area of critical unmet need with no FDA-approved pharmaceutical treatments available and high mortality rate for patients suffering from anorexia nervosa. We commenced patient recruitment in our Phase 2 trials in anorexia nervosa and PTSD.
Develop a portfoliopipeline of new indications for COMP360, new compoundsdrug and technologies thattechnology assets to increase the value of COMPASS while demonstrating commitment to transforming mental health – We have strengthened the potential to improve the safety, efficacy, and accessibilityintegration of our therapies – Clinical development programs for PTSDinternal and anorexia were initiated. We strengthened our drugexternal discovery capabilities throughand prioritized our Discovery Centercompound portfolio. We have identified potential prodrug lead candidates. We have continued development of our artificial intelligence model and other partnerships, successfully filing three PCT patents. In the areahave authored an article titled Psilocybin Therapy for Treatment Resistant Depression: Prediction of researching technologiesClinical Outcome by Natural Language Processing, which we have shared openly and submitted to improve safety, efficacya journal for publication. We deployed improved versions of our MyPathfinder app and efficiency, we developed a prototypeour Therapist COMPanion app, which are able to transcribe our patient session recordings, which is more cost efficient than externally available tools. We developed a secure and compliant centralised data storage repository and additional computational tools, including a proprietary web application allowing for confidential and secure recording reviews.support multiple clinical studies in different disease areas. Position COMPASS as a leading mental health care company, drive and fund future plansshape the narrative of mental health care transformation across all stakeholders and secure additional equity financing – We raised $165mconducted an intensive investor relations program and communications strategy, culminating in a secondary offeringour first Capital Markets Day event. However, conditions in the equity markets in the U.S. remain challenging, particularly in the biotechnology industry. We had cash and cash equivalents of American Depository Shares, above our target$143.2 million as of $140m, and have prepared for other fundraising opportunities.the end of 2022, which enable us to fund operations into 2024. COMP360 for TRD: Prepare for a successful and scalable commercial launch, should COMP360 receive regulatory approval, that will ensure access for as many patients as possible – We developed our commercial and patient access model at launch, including reimbursement codes, real world data and payer partnerships, services and a go-to-market model. We developed and tested the first version of a scalable therapist training platform, as well as a scalable patient support platform, in accordance with regulatory requirements. | | | | | | | | | | | | | • | | Develop a talented team and an organisation that makes rapid growth sustainable for employees – We strengthened talent hiring and people development capabilities and processes, including recruitment, onboarding, performance management, learning and development and equity, diversity and inclusion. We managed strong headcount growth, strengthened our People and IT capabilities, and maintained a score >85% on the engagement dimensions of our People survey.Develop a high-performing, mission-driven organization – We deployed our first career performance management system and developed our first management training curriculum. We managed strong headcount growth, growing by 59% during 2022, and maintained a very strong 39% net promoter score (according to Qualtrics XM Institute, a score of between 10 to 30% is good and a score of 30% or more is excellent). In 2022, we were certified a Most Loved Workplace by Best Practice Institute (BPI) and its Most Loved Workplaces® operation, which is a company that assesses and certifies a company as a workplace employees love based on internal surveys, external public ratings and interviews with corporate officials, ranking number 31 in the U.K.
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In January 2022,2023, the Compensation and Leadership Development Committee evaluated our achievement of the 20212022 corporate objectives. Based on our 20212022 results, the Compensation and Leadership Development Committee determined that we had not only achieved eachmost of our performancethe above corporate goals at target but had also achievedoverachieved certain stretch goals, in particular aroundelements related to developing technology assets under our above-described goal of "Develop a pipeline of new drug and technology assets to increase the continued developmentvalue of COMPASS while demonstrating commitment to transforming mental health" and commercial preparations for COMP360 for TRD and the extensionunderachieved our above-described goal of COMP360 to different indications.securing additional equity financing. Based on this assessment, the Compensation and Leadership Development Committee determined to fund the annual bonus pool at 110%100%, a percentage reached as a weighted average of scores against our corporate goals as applied to a maximum bonus of 125% and which reflected our above-target corporate performance.goals. The Compensation and Leadership Development Committee awarded bonuses at this funding level for the CEOChief Executive Officer and other NEOs,named executive officers, after evaluating each person’s contributions in light of company goals, with adjustments to award sizes for named executive officers other than each of our Chief Executive Officers, based on corporate achievement in applicable function and individual performance in the year. While all of our NEOs met their targets, exceptional performance was rewarded with payouts above 110%.
The table below sets forth the 20212022 annual base salaries, target annual cash bonuses, and the 20212022 annual cash bonuses earned by our NEOs.named executive officers. | | | | | | | | | | | | | | | | | | | | Named Executive Officer (1) | 2021 Annual Base Salary | Target Annual Cash Bonus (% of Annual Base Salary) | 2021 Payout (% of Target) | 2021
Annual
Cash Bonus | | George Goldsmith | $584,658 | 55% | 100% | $321,562 | | Ekaterina Malievskaia | $412,700 | 45% | 125% | $231,800 | Guy Goodwin (2) | $167,716 | 35% | 110% | $64,572 | Piers Morgan (3) | $440,213 | 45% | N/A (4) | $137,567 | | Nate Poulsen | $370,000 | 35% | 104% | $134,472 |
| | | | | | | | | | | | | | | | | | | | Named Executive Officer (1) | 2022 Annual Base Salary | Target Annual Cash Bonus (% of Annual Base Salary) | 2022 Payout (% of Target) | 2022 Annual Cash Bonus | Kabir Nath(2) | $580,000 | 60% | 100% | $145,000 | George Goldsmith(3) | $491,337 | 60% | 100% | $294,964 | Matthew Owens(4) | $371,130 | 40% | 96% | $133,131 | | Ekaterina Malievskaia | $378,563 | 45% | 96% | $163,539 |
(1) All amounts, except those for Mr. Poulsen,Nath, have been converted from GBP to USD using the 20212022 average FX rate (£1:$1.3757)1.2371). (2) Mr. GoodwinNath was appointed as our Chief MedicalExecutive Officer in July 2021, with aneffective August 2021 start date,1, 2022, and his target bonus was calculated based on a pro-rated salary from his point of hire to year-end. (3) A discretionary 2021 bonus payment of £100,000 ($137,567) was made to Mr. Morgan in connection with his continued fulfillment of his functionGoldsmith served as Chief FinancialExecutive Officer until the endAugust 1, 2022 and as Executive Chair between August 1, and December 31, 2022. His target bonus was calculated based on a pro-rated salary for each of 2021.these roles during 2022. (4) Mr. Morgan ceasedOwens was appointed as our Chief Legal Officer and General Counsel effective February 1, 2022 and his target bonus was calculated based on a pro-rated salary from his point of hire to be an employee of the Company on December 31, 2021 and was not entitled to his annual bonus.year-end.
Long-Term Incentive Compensation Long-term incentive compensation in the form of equity incentives aligns the interests of our executive officers, including our NEOs,named executive officers, with long-term shareholder interests and allows us to attract, incentivize, and retain staff in a competitive market. As a form of compensation, share-based incentives also enable us to more effectively manage the Company’s cash resources. In connection with the IPO, we adopted the COMPASS Pathways plc 2020 Share Option and Incentive Plan (the “2020 Plan”). The 2020 Plan allows for the grant of options, restricted share awards, restricted share unit awards (“RSUs”), other share or cash-based awards and dividend equivalent awards to employees, non-employee directors and consultants. At the time of hire, equity awards are granted to our executive officers, including our NEOs,named executive officers, based on the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above. WithMr. Nath and Mr. Owens joined us during 2022 and their equity awards were negotiated during the exceptionhiring process. The below table reflects the new hire grants negotiated with each of 2021 (as discussed above), typically,Mr. Nath and Mr. Owens.
| | | | | | | | | | | | | Named Executive Officer | New Hire Option Award | New Hire Restricted Share Unit Award | | Kabir Nath | 600,000 | 50,000 | | Matthew Owens | 100,000 | 12,400 |
Typically, at the beginning of each year, the Compensation and Leadership Development Committee determines the size and relative weighting of the annual equity awards for our executive officers, including our NEOs,named executive officers, it deems reasonable and appropriate based on such factors. The size and relative weighting is the same for each of our executive officers, including our NEOs,named executive officers, who are at the same level. In addition, the Compensation and Leadership Development Committee may deem it advisable to grant subsequent equity awards to our executive officers, including our NEOs,named executive officers, and may adjust their equity awards in the event of a promotion or significant change in responsibilities. As the Company made share option grants to executive officers, including our NEOs, at the time of IPO in September 2020 under the 2020 Plan, no additional equity grants were issued to Named Executive Officers during 2021, barring our Chief Medical Officer, who received a sign-on equity grant of 100,000 options that vest 25% on the one-year anniversary of the grant date and over 36 equal installments over the subsequent 36 months, subject to his continued service. With the help of our compensation consultant, we determine whether to grant additional equity awards, the mix of RSUs and options and the amount of equity awards to give to our executive officers based on benchmarking the position of each executive officer against the compensation paid to people in similar positions in our peer group.
In February 2022, the Compensation and Leadership Development Committee approved the following annual equity grants to our named executive officers employed at that time. | | | | | | | | | | | | | Named Executive Officer | Annual Option Award | Annual Restricted Share Unit Award | | George Goldsmith | 173,000 | 29,000 | | Ekaterina Malievskaia | 75,000 | 13,000 |
Employment Arrangements with our Named Executive Officers In connection with our IPO, the Compensation and Leadership Development Committee reviewed the employment agreements with our executive officers, including our NEOs,Mr. Goldsmith and Dr. Malievskaia, with a focus on public market practices and severance arrangements in the event of involuntary termination not in connection with a change in control and involuntary termination or good reason termination in connection with a change in control, and determined to revise the terms of employment agreements with our executive officers in line with prevailing market practice for our peer companies and prevailing practices in the NEO’snamed executive officer's jurisdiction of employment, providing similar terms to executives hired since the IPO.IPO, such as Mr. Nath and Mr. Owens. We engage our NEOsnamed executive officers using standard terms as set out in our executive employment agreements. These agreements set forth the
individual’s base salary and bonus target based on a percentage of annual base salary and entitle the executive officer to participate in our equity incentive plans, with the amount of such equity participation to be determined at the Compensation and Leadership Development Committee’s sole discretion, and other employee benefits generally available to our employees. If an executive officer is based outside the U.K., additional benefits and assistance with relocation may be provided which reflect local market norms or legislation. The agreements also prohibit our NEOsnamed executive officers from engaging directly or indirectly in competition with us, recruiting or soliciting our employees, diverting our customers to a competitor, or disclosing our confidential information or business practices. Our post-employment compensation arrangements set forth in the employment agreements are designed to provide reasonable compensation to executive officers who leave the Company under certain circumstances to facilitate their transition to new employment. Further, we seek to mitigate any potential employer liability and avoid future disputes or litigation by requiring a departing executive officer to sign a separation and release agreement acceptable to us as a condition to receiving post-employment compensation payments or benefits. Mr. Poulsen received severance payments consistent with the terms of his employment agreement in connection with his departure from the Company on December 31, 2021. Our Compensation and Leadership Development Committee and the Board of Directors do not consider specific amounts payable under these post-employment compensation arrangements when establishing annual compensation. It does believe, however, that these arrangements are necessary to offer compensation packages that are competitive. For more information on the service and employment agreements with our NEOsnamed executive officers and post-employment compensation arrangements, see the discussion under the headings “Employment Agreements, Change of Control and Severance Arrangements with Named Executive Officers” and “Potential Payments upon Termination or Change in Control” later in this Proxy Statement. Other Elements of Compensation Retirement Plans We currently maintain a 401(k) retirement savings plan for our U.S.-based employees, including any U.S.-based NEOs,named executive officers, who satisfy certain eligibility requirements. The U.S. Internal Revenue Code (the “Code”) allows eligible employees to defer a portion of their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k) plan. We currently contribute a 4% safe harbor match on employee contributions up to the statutory limit. We also maintain a defined contribution plan for U.K. employees, including any U.K.-based NEOs,named executive officers, who satisfy certain eligibility requirements. All employees who participate in the plan receive aan employer contribution, which is generally 3% contribution. Mr. Morgan received ancontribution and in some cases may be up to 8% contribution in line with the terms of his employment agreement. 2020 Share Option and Incentive Plan
In September 2020, we adopted the 2020 Plan. The 2020 Plan allows the Compensation Committee to make equity-based and cash-based incentive awards to our officers, employees, directors and other key persons (including consultants). The 2020 Plan is more fully described below, see “Grants of Plan Based Awards for Fiscal Year 2021.”
The 2020 Plan permits the granting of both options to purchase ordinary shares intended to qualify as incentive share options under Section 422 of the Code, and options that do not so qualify. The option exercise price of each option will be determined by our Compensation Committee but may not be less than 100% of the fair market value of our ordinary shares on the date of grant. The term of each option will be fixed by our Compensation Committee and may not exceed ten years from the date of grant. Our Compensation Committee development committee will determine at what time or times each option may be exercised.
Our Compensation Committee may award share appreciation rights subject to such conditions and restrictions as it may determine. Share appreciation rights entitle the recipient to ordinary shares, or cash, equal to the value of the appreciation in our share price over the exercise price. The exercise price of each share appreciation right may not be less than 100% of the fair market value of the ordinary shares on the date of grant.
Other Compensation Policies and Practices Policy Prohibiting Hedging and Pledging Our Insider Trading Policy prohibits our executive officers, the non-employee members of our Board of Directors and certain designated employees who in the course of the performance of their duties have access to material, non-public information regarding the Company from engaging in the following transactions: selling any of our securities that they do not own at the time of the sale (a “short sale”); buying or selling puts, calls, other derivative securities of the Company or any derivative securities that provide the economic equivalent of ownership of any of our securities or an opportunity, direct or indirect, to profit from any change in the value of our securities or engaging in any other hedging transaction with respect to our securities at any time; using our securities as collateral in a margin account; and pledging our securities as collateral for a loan (or modifying an existing pledge) unless the pledge has been approved by the Audit and Risk Committee of the Board of Directors. Tax and Accounting Considerations Taxation of “Parachute” Payments Sections 280G and 4999 of the U.S. Code provide that executive officers and directors who hold significant equity interests and certain other service providers may be subject to significant additional taxes if they receive payments or benefits in connection with a change in control of the company that exceeds certain prescribed limits, and that the company (or a successor) may forfeit a deduction on the amounts subject to this additional tax. We have not agreed to provide any executive officer, including any NEO,named executive officer, with a “gross-up” or other reimbursement payment for any tax liability that the executive officer might owe as a result of the application of Sections 280G or 4999 of the U.S. Code. Risk Assessment
Our Compensation Committee annually assesses our compensation plans, policies and practices for NEOs and other employees, including whether the policies and practices are reasonably likely to have a material adverse effect on us. We believe that the mix and design of our executive compensation plans and policies do not encourage management to assume excessive risks and are not reasonably likely to have a material adverse effect on us for the following reasons: we offer an appropriate balance of short and long-term incentives and fixed and variable amounts; our variable compensation provides enhanced incentives for executives to outperform and strong disincentives for executives to underperform against our Company goals and is based on a balanced mix of Company performance criteria; and the Board and compensation committee have the authority to adjust variable compensation as appropriate.
COMPENSATION & LEADERSHIP DEVELOPMENT COMMITTEE REPORT
The Compensation and Leadership Development Committee of our Board has reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K and contained in this proxy statement. Based on this review and discussion, the Compensation Committee has recommended to our Board that the Compensation Discussion and Analysis be included in this proxy statement.
The COMPASS Pathways plc Compensation and Leadership Development Committee
Annalisa Jenkins (Chair)
Jason Camm
David Norton
Wayne Riley
The information contained in this Compensation and Leadership Development Committee report shall not be deemed to be “soliciting material,” “filed” with the SEC, subject to Regulations 14A or 14C of the Exchange Act, or subject to the liabilities of Section 18 of the Exchange Act. No portion of this Compensation and Leadership Development Committee report shall be deemed to be incorporated by reference into any filing under the Securities Act, or the Exchange Act, through any general statement incorporating by reference in its entirety the proxy statement in which this report appears, except to the extent that we specifically incorporate this report or a portion of it by reference. In addition, this Compensation and Leadership Development Committee report shall not be deemed filed under either the Securities Act or the Exchange Act.
NAMED EXECUTIVE OFFICER COMPENSATION
SUMMARY COMPENSATION TABLE The following table provides information regardingshows the total compensation for services rendered in all capacities that was earnedpaid or accrued during the last two fiscal year indicated.years ended December 31, 2022 and 2021 to each individual who served as our principal executive officer during fiscal 2022 and our two next most highly compensated executive officers were serving as executive officers as of December 31, 2022. These individuals are our named executive officers. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Non-Equity | | | | | | | | | | | | | | | Incentive | | | | | | | | | | | | | | Option | Plan | | All Other | | | | | | | Salary | | Bonus | | | Awards | Compensation | | Compensation | | Total | Name and Principal Position (1) | | Year | | ($) | | ($) | | | ($) (2) | ($) | | ($) | | ($) | | George Goldsmith | | 2021 | | 584,658 | | | | | — | 321,562 | | 37,304 (3) | | 943,523 | | Chief Executive Officer | | 2020 | | 453,936 | | | | | 1,707,007 | 234,743 | | 34,113 | | 2,429,800 | | | 2019 | | 346,782 | | | | | — | — | | 28,752 | | 375,534 | Piers Morgan (4) | | 2021 | | 440,213 | | 137,567 (5) | | | 123,260 (6) | | | 35,217 (7) | | 736,256 | | Former Chief Financial Officer | | 2020 | | 262,523 | | | | | 1,377,094 | 149,207 | | 19,643 | | 1,808,467 | Guy Goodwin (8) | | 2021 | | 167,719 | | | | | 1,817,184 | 64,572 | | — | | 2,049,475 | | Chief Medical Officer | | — | | — | | | | | — | — | | — | | — | | Ekaterina Malievskaia | | 2021 | | 412,700 | | | | | — | 231,800 | | 24,635 (3) | | 669,134 | | Chief Innovation Officer | | 2020 | | 362,287 | | | | | 1,401,736 | 150,403 | | 23,708 | | 1,938,134 | | | 2019 | | 306,659 | | | | | — | — | | 21,027 | | 327,686 | Nate Poulsen (9) | | 2021 | | 370,000 | | | | | — | 134,472 | | 900,748 (10) | | 1,405,220 | | Former GC and Chief Legal Officer | | 2020 | | 370,000 | | | | | 722,133 | 107,250 | | 2,000 | | 1,201,383 | | 2019 | | 325,000 | | | | | 330,664 | — | | — | | 655,664 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Stock | | Option | | | | All Other | | | | | | | Salary | | Bonus | | Awards | | Awards | | | | Compensation | | Total | | Name and Principal Position(1) | | Year | | ($) | | ($) (2) | | ($) (3) | | ($) (3) | | | | ($) | | ($) | | Kabir Nath (4) | | 2022 | | 243,123 | | 145,000 | | 754,668 | | 6,422,963 | | | | 77,822 (5) | | 7,643,576 | | Chief Executive Officer | | 2021 | | — | | — | | — | | — | | | | — | | — | | George Goldsmith (6) | | 2022 | | 491,337 | | 294,964 | | 418,629 | | 1,732,031 | | | | 40,070 (7) | | 2,977,030 | | Former Chief Executive Officer | | 2021 | | 584,658 | | 321,562 | | — | | — | | | | 37,304 (7) | | 943,524 | | Matthew Owens(8) | | 2022 | | 339,619 | | 133,131 | | 179,000 | | 1,004,560 | | | | 155,879 (9) | | 1,812,188 | | General Counsel and Chief Legal Officer | | 2021 | | — | | — | | — | | — | | | | — | | — | | Ekaterina Malievskaia | | 2022 | | 378,563 | | 163,549 | | 187,661 | | 750,880 | | | | 25,802 (10) | | 1,506,456 | | Chief Innovation Officer | | 2021 | | 412,700 | | 231,800 | | — | | — | | | | 24,635 (10) | | 669,135 |
(1) All 2022 amounts, except those for Mr. Poulsen,Nath, have been converted from GBP to USD using the 2022 average FX rate (£1:$1.2371). All 2021 amounts have been converted from GBP to USD using the 2021 average FX rate (£1:$1.3757). (2) The amounts reported in this column represent bonuses paid to each named executive officer based on the Compensation and Leadership Development Committee’s determination of performance against 2022 goals in its discretion. (3) The amount reported in the Stock Awards and Option Awards column represents the aggregate grant date fair value of time-based RSUs and time-based share options granted to each of the NEOsnamed executive officers in the applicable year, calculated in
accordance with the provisions of FASB ASC Topic 718. The assumptions we used in calculating these amounts are included in Note 10 of our audited consolidated financial statements for the year ended December 31, 20212022 included in our Annual Report on Form 10-K, filed with the SEC on February 24, 2022.28, 2023. The amounts reported in the Summary Compensation Table for these time-based option awardsRSUs and options may not represent the amounts that the NEOsnamed executive officers will actually realize from the awards. Whether, and to what extent, a NEOnamed executive officer realizes value will depend on our actual operating performance, share price fluctuations and the NEO’snamed executive officer’s continued employment. (3)(4) Effective August 1, 2022, Mr. Nath was appointed as our Chief Executive Officer and a member of our Board. The amount reported for salary represents the amount earned following his commencement of employment, and the amount of his annual bonus was prorated to reflect his partial year of employment.
(5) All other compensation received byfor Mr. Nath consists of (i) housing allowance of £60,000 ($74,228), (ii) 401(k) company contributions of $1,794 and (iii) health savings account contributions of $1,800. (6) Effective August 1, 2022, Mr. Goldsmith transitioned to the role of Executive Chair, a position he held until December 31, 2022. The amount reported for salary represents the amount earned in his role as Chief Executive Officer until August 1, 2022 and Dr. Malievskaia relates tothe amount earned in his role as Executive Chair between August 1, 2022 and December 31, 2022. (7) All other compensation for Mr. Goldsmith consists of health insurance premiums paid under a separate policy than what is applicable to all other employees. (4) On December 31, 2021,(8) Effective February 1, 2022, Mr. Morgan’s resignation from the position ofOwens was appointed as our Chief FinancialLegal Officer became effective.
(5)A discretionary 2021 bonus payment of $137,567 was made to Mr. Morgan in connection with his continued fulfillment of his function as Chief Financial Officer until the end of 2021.
(6) As part of Mr. Morgan’s separation agreement with the Company, there were two modifications in relation to his previously granted options. This amount represented the additional charges the Company recognized as part of these modifications calculated in accordance with FASB ASC Topic 718.
(7) All other compensation received by Mr. Morgan relates to Company pension contributions of 8%.
(8) Dr. Goodwin joined us in July 2021 (with an August 2021 start date).and General Counsel. The amount reported for salary represents the amount earningearned following his commencement of employment, and the amount of his non-equity incentive compensationannual bonus was prorated to reflect his partial year of employment.
(9) On December 31, 2021,All other compensation for Mr. Poulsen employment termination with the Company became effective.Owens consists of (i) housing allowance of £110,000 ($136,085) and (ii) employer pension contributions of £16,000 ($19,794). (10) This amount represents the severance equalAll other compensation for Dr Malievskaia consists of health insurance premiums paid under a separate policy than what is applicable to nine months of his base salary ($277,500) plus an additional $615,000 paid to Mr. Poulsen upon termination of employment consistent with the terms of his employment agreement entered into in September 2020. This amount also includes $8,248 in 401(k) matching contributions by the Company.
GRANTS OF PLAN BASED AWARDS FOR FISCAL YEAR 2021
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | All Other | | | | Grant Date | | | | | Estimated Future Payouts | | Option Awards: | | | | Fair Value | | | | | Under Non-Equity Incentive | | Number of | | Exercise or | | Of Stock | | | | | Plan Awards (1) | | Securities | | Base Price of | | and Option | | | | | Threshold | | Target | | Maximum | | Underlying Options (3) | | Option Awards | | Awards (4) | | Name | | Grant Date | | ($) | | ($) | | ($) (2) | | (#) | | ($/Sh) | | ($) | George Goldsmith (5) | | — | | 160,781 | | 321,562 | | 401,952 | | — | | — | | — | Piers Morgan (5) | | — | | 99,048 | | 198,096 | | 247,620 | | — | | — | | — | Guy Goodwin (5) | | 8/16/2021 | | — | | — | | — | | 100,000 | | 30.27 | | 1,817,184 | | | — | | 29,351 | | 58,702 | | 73,377 | | — | | — | | — | Ekaterina Malievskaia (5) | | — | | 92,857 | | 185,715 | | 232,144 | | — | | — | | — | | Nate Poulsen | | — | | 64,750 | | 129,500 | | 161,875 | | — | | — | | — |
(1) The amounts shown reflect the target annual cash bonus for our NEOs, which are disclosed in the “2021 Annual Cash Bonuses” section of the above “Compensation Discussion and Analysis.” The actual amounts paid for 2021 are disclosed in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.
(2) The non-equity incentive plan award maximum can be modified by an individual performance modifier up to 125%.
(3) The amounts shown represent time-based share options granted pursuant to our 2020 Plan.
(4) The amount reported represents the aggregate grant date fair value of share options awarded to our NEOs during 2021, calculated in accordance with FASB, ASC Topic 718. Such grant date fair value does not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value of the share option reported in this column are set forth in Note 11 in our Annual Report on Form 10-K. The amount reported in this column reflects the accounting cost for these share option awards and does not correspond to the actual economic value that may be received by the NEOs upon the exercise of the share options or any sale of the shares.
(5)All amounts, except those for Mr. Poulsen, have been converted from GBP to USD using the 2021 average FX rate (£1:$1.3757).
2020 Share Option and Incentive Plan
In September 2020, we adopted the 2020 Plan. The 2020 Plan allows the Compensation Committee to make equity-based and cash-based incentive awards to our officers, employees, directors and other key persons (including consultants).
We have initially reserved 2,074,325 ordinary shares (the “Initial Limit”) for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by four percent of the outstanding number of ordinary shares on the immediately preceding December 31, or such lesser number of shares as determined by ourCompensation Committee (the “Annual Increase”). This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. The ordinary shares underlying any awards that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by us prior to vesting, satisfied without any issuance of shares, expire or are otherwise terminated (other than by exercise) under the 2020 Plan will be added back to the ordinary shares available for issuance under the 2020 Plan.
The maximum aggregate number of shares that may be issued in the form of incentive share options shall not exceed the Initial Limit cumulatively increased on January 1, 2022 and on each January 1 thereafter by the lesser of the Annual Increase for such year or 2,074,325 ordinary shares.
The 2020 Plan is administered by our Compensation Committee. Our Compensation Committee has full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants, and to determine the specific terms and conditions of each award, subject to the provisions of the 2020 Plan. Persons eligible to participate in the 2020 Plan will be those full or part-time officers, employees, non-employee directors and other key persons (including consultants) as selected from time to time by our Compensation Committee in its discretion.
The 2020 Plan permits the granting of both options to purchase ordinary shares intended to qualify as incentive share options under Section 422 of the Code, and options that do not so qualify. The option exercise price of each option will be determined by our Compensation Committee but may not be less than 100% of the fair market value of our ordinary shares on the date of grant. The term of each option will be fixed by our Compensation Committee and may not exceed 10 years from the date of grant. Our Compensation Committee will determine at what time or times each option may be exercised.
Our Compensation Committee may award share appreciation rights subject to such conditions and restrictions as it may determine. Share appreciation rights entitle the recipient to ordinary shares, or cash, equal to the value of the appreciation in our share price over the exercise price. The exercise price of each share appreciation right may not be less than 100% of the fair market value of the ordinary shares on the date of grant.
Our Compensation Committee may award restricted shares and restricted share units to participants subject to such conditions and restrictions as it may determine. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with us through a specified vesting period. Our Compensation Committee may also grant ordinary shares that are free from any restrictions under the 2020 Plan. Unrestricted shares may be granted to participants in recognition of past services or other valid consideration and may be issued in lieu of cash compensation due to such participant. Our Compensation Committee may grant cash bonuses under the 2020 Plan to participants, subject to the achievement of certain performance goals.
The 2020 Plan provides that in the case of, and subject to, the consummation of a “sale event” as defined in the 2020 Plan, all outstanding awards may be assumed, substituted or otherwise continued by the successor entity. To the extent that the successor entity does not assume, substitute or otherwise continue such awards, then (i) all share options and share appreciation rights will automatically become fully exercisable and the restrictions and conditions on all other awards with time-based conditions will automatically be deemed waived, and awards with conditions and restrictions relating to the attainment of performance goals may become vested and non-forfeitable in connection with a sale event in the Compensation Committee’s discretion and (ii) upon the effectiveness of the sale event, the 2020 Plan and all awards will automatically terminate. In the event of such termination, (i) individuals holding options and share appreciation rights will be permitted to exercise such options and share appreciation rights (to the extent exercisable) prior to the sale event, or (ii) we may make or provide for a cash payment to participants holding options and share appreciation rights equal to the difference between the per share cash consideration payable to shareholders in the sale event and the exercise price of the options or share appreciation rights (to the extent then exercisable).
Our Board of Directors may amend or discontinue the 2020 Plan and our Compensation Committee may amend the exercise price of options and amend or cancel outstanding awards for purposes of satisfying changes in law or any other lawful purpose but no such action may adversely affect rights under an award without the holder’s consent. Certain amendments to the 2020 Plan require the approval of our shareholders. No awards may be granted under the 2020 Plan after the date that is ten years from the date of shareholder approval.
OUTSTANDING EQUITY AWARDS AT 2021 FISCAL YEAR-END
The following table summarizes the options and restricted share units that we granted to our executive officers pursuant to the terms of our equity program established in our 2017 Equity Incentive Plan (the “2017 Plan”) and the 2020 Plan and were outstanding as of December 31, 2021:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | | | | | | | | | | | | | | | | | | | | | | | | | Market | | | | | | | | | | | Number of | | Value of | | | Number of Securities | | | | | | Shares or | | Shares or | | | Underlying Unexercised | | Option | | | | Units That | | Units That | | | Options | | Exercise | | Option | | Have Not | | Have Not | | | Exercisable | | Unexercisable | | Price | | Expiration | | Vested | | Vested | | Name | | (#) | | (#) | | ($) | | Date | | (#) | | ($) (1) | George Goldsmith (2) | | 35,500 | | 78,100 | | 17.00 | | 9/18/2030 | | | | | | (3) | | | | | | | | | | 30,739 | | 679,332 | Piers Morgan (4) | | 73,280 | | — | | 4.72 | | 3/30/2030 | | | | | | (5) | | 27,990 | | — | | 0.01 | | 6/30/2030 | | | | | | (6) | | 28,000 | | — | | 17.00 | | 9/18/2030 | | | | | Guy Goodwin (7) | | — | | 100,000 | | 30.27 | | 8/15/2031 | | | | | Ekaterina Malievskaia (8) | | 26,625 | | 58,575 | | 17.00 | | 9/18/2030 | | | | | | (9) | | | | | | | | | | 30,739 | | 679,332 | Nate Poulsen (10) | | 111,178 | | — | | 1.37 | | 7/20/2029 | | | | | | (11) | | 30,466 | | — | | 2.32 | | 3/30/2030 | | | | | | (12) | | 12,247 | | — | | 17.00 | | 9/18/2030 | | | | |
(1) Market value has been computed in accordance with SEC rules as the number of unvested shares or units multiplied by the closing price per share of our ADSs on The Nasdaq Global Select Market as of 12/31/2021 ($22.10).
(2) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is September 18, 2020. This grant was made under the 2020 Plan.
(3) The restricted share units are subject to 25% vesting upon the earlier of (i) the one year anniversary of the date of grant, or (ii) the first day following the six-month anniversary of the listing of the Company’s ordinary shares on any stock exchange on which the closing price of the shares is 20% higher than the listing price for at least five consecutive trading days. They vest quarterly thereafter over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is August 12, 2020. This grant was made under the 2017 Plan.
(4) Nominal options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is March 23, 2020. This grant was made under the 2017 Plan.
(5) Nominal options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is 30 June 2020. This grant was made under the 2017 Plan.
(6) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is September 18, 2020. This grant was made under the 2020 Plan.
(7) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is August 16, 2021. This grant was made under the 2020 Plan.
(8) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is September 18, 2020. This grant was made under the 2020 Plan.
(9) The restricted share units are subject to 25% vesting upon the earlier of (i) the one year anniversary of the date of grant, or (ii) the first day following the six-month anniversary of the listing of the Company’s ordinary shares on any stock exchange on which the closing price of the shares is 20% higher than the listing price for at least five consecutive trading days. They vest quarterly thereafter for three years, subject to continued service through each applicable vesting date. The vesting commencement date is August 12, 2020. This grant was made under the 2017 Plan.
(10) Nominal options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is June 5, 2019. This grant was made under the 2017 Plan.
(11) Nominal options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is June 5, 2019. This grant was made under the 2017 Plan.
(12) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is September 18, 2020. This grant was made under the 2020 Plan.
OPTION EXERCISES AND STOCK VESTED IN FISCAL YEAR 2021
The following table sets forth the number of shares acquired and the value realized upon exercises of share options and vesting of RSUs during the fiscal year ended December 31, 2021 by each of our NEOs.
| | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | | | | | | | | | | | Number of Shares | | Value Realized | | Number of Shares | | Value Realized | | | Acquired on Exercise | | on Exercise | | Acquired on Vesting | | on Vesting | | Name | | (#) | | ($) (1) | | (#) | | ($) (2) | | George Goldsmith | | — | | — | | 13,971 | | 463,891 | | Piers Morgan | | 94,229 | | 1,690,293 | | — | | — | | Guy Goodwin | | — | | — | | — | | — | | Ekaterina Malievskaia | | — | | — | | 13,971 | | 463,891 | | Nate Poulsen | | 92,195 | | 2,867,112 | | 12,570 | | 417,374 |
(1) The value realized upon the exercise of share options is calculated by (a) subtracting the share option exercise price from the market price on the date of exercise to get the realized value per share, and (b) multiplying the realized value per share by the number of shares underlying the share options exercised.
(2) The value realized upon vesting of RSUs is calculated by multiplying the number of shares of RSUs vested by the market price on the vest date.employees.
EMPLOYMENT AGREEMENTS, CHANGE OF CONTROL AND SEVERANCE ARRANGEMENTS WITH NAMED EXECUTIVE OFFICERS George Goldsmith GeneralCEO Terms. In September 2020, we entered into an employment agreement with Mr. Goldsmith in connection with his continued employment as our Chief Executive Officer. This agreement was amended effective August 1, 2022 in connection with Mr. Goldsmith's transition to Executive Chair to, among other things, adjust his salary and eliminate the notice and payment upon termination provisions in his employment agreement.
Mr. Goldsmith’s employment agreement providesprovided for an initial base salary of £425,000 ($584,658)525,768), which is subject to annual review and redetermination. This salary was increased to £433,500 ($596,351)536,283), effective January 1, 2022. In addition, Mr. Goldsmith iswas entitled to participate in our executive variable cash compensation program. In his employment agreement, Mr. Goldsmith is eligible to earn an annual incentive bonus, with a target bonus amount of 55% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances) as determined by our Board of Directors in its discretion. Mr. Goldsmith iswas only entitled to payment of a bonus payment if he is in the Company’s employment and not under notice, given or received, on the date that the bonus is paid and iswas not eligible for a bonus payment if he iswas subject to any disciplinary action or investigation at the date any bonus is being considered or paid. Mr. Goldsmith iswas also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time. Executive Chair Terms. In connection with his appointment as Executive Chair, Mr. Goldsmith's employment agreement was amended. Pursuant to the terms of the amended employment agreement, Mr. Goldsmith served as Executive Chairman until December 31, 2022, at which time his employment ended, without the need for notice by either party. Between August 1, 2022 and December 31, 2022, Mr. Goldsmith was entitled to an annual base salary of £346,800 (approximately $414,200). He was eligible to receive an annual incentive bonus for the year ending December 31, 2022, with a target bonus amount of 60% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances), notwithstanding the termination of his employment prior to the date of the bonus payment, provided, however, that such bonus amount was pro-rated to reflect his reduced salary for the period from August 1, 2022 to December 31, 2022. During this time, Mr. Goldsmith received no additional compensation for his services as a director of the Company. Kabir Nath General Terms. Effective August 1, 2022, we entered into an employment agreement with Mr. Nath in connection with his appointment as our Chief Executive Officer. The Employment Agreement has an initial term through the earlier to occur of (i) the date Mr. Nath relocates to the United Kingdom or (ii) December 31, 2023. On or before
December 31, 2023, Mr. Nath will re-locate to the United Kingdom and will enter into a new agreement on substantially similar terms to his current employment agreement and those of our other U.K.-based executives. Mr. Nath's employment agreement provides for an annual base salary of $580,000 (upon Mr. Nath's relocation to the United Kingdom, such salary will be paid in pound sterling (“GBP”) and be equal to the greater of (i) £431,000 GBP or (ii) the GBP equivalent of $580,000 U.S. dollars calculated at the then-prevailing exchange rate), which is subject to annual review and redetermination. Pursuant to his employment agreement, Mr. Nath is eligible to earn an annual incentive bonus, with a target bonus amount of 60% of his then-current annual base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances) as determined by our Board in its discretion. In addition, Mr. Nath will receive (i) a housing stipend of £12,000 per month through August 2023; (ii) a one-time reimbursement payment of up to $5,000 for attorneys’ fees; and (iii) a one-time cash payment of $250,000 when Mr. Nath relocates to the United Kingdom. Mr. Nath will receive no additional compensation for his services as a director of the Company. Mr. Nath is also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time. Payments Upon Termination. Either party may terminate the employment agreement upon ninety (90) days’ written notice. The Company may terminate the Employment Agreement at any time for “cause” (as such term is defined in the employment agreement). Mr. Nath may terminate the Employment Agreement upon thirty (30) days’ written notice for “good reason” (as such term is defined in the Employment Agreement), subject to Company’s right to cure the deficiency. In the event we terminate Mr. Nath’s employment without “cause” or Mr. Nath terminates his employment for “good reason”, Mr. Nath is entitled to a cash severance payment equal to one year’s annual salary plus the target annual bonus amount for the year in which such termination occurs. Matthew Owens General Terms. Effective February 1, 2022, we entered into an employment agreement with Mr. Owens in connection with his appointment as our Chief Legal Officer and General Counsel. Mr. Owens’ employment agreement provides for an initial base salary of £300,000 ($371,130), which is subject to annual review and redetermination. In addition, Mr. Owens is entitled to participate in our executive variable cash compensation program. Pursuant to his employment agreement, Mr. Owens is eligible to earn an annual incentive bonus, with a target bonus amount of 40% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances). To assist with his relocation to the U.K., we agreed to pay a cash contribution towards housing costs of £10,000 ($12,371) per month through August 2023 and to provide tax advisory services in connection with the preparation and filing of tax returns for the first two tax years of his employment. Mr. Owens is also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time. His employment agreement also provides for a pension contribution equivalent to 8% of his monthly base salary. Payments upon Termination.The Company may, in its discretion, terminate Mr. Goldsmith’sOwens' employment at any time with immediate effect by providing notice to Mr. GoldsmithOwens that it is exercising its right and will make a a payment in lieu of notice (“PILON”). Such PILON is equal to the base salary which Mr. GoldsmithOwens would be entitled to receive during the notice period of nine months less deductions required by law and will be paid within 28 days. Mr. Goldsmith is subject to immediate termination and is not entitled to any further payment, including any PILON which the Company is entitled to recover if payment was already made, other than amounts accrued as of the
termination date in the event he is terminated for certain reasons for cause, including gross misconduct, serious breach of his employment agreement, gross negligence or incompetence and certain other requirements, as set forth in his employment agreement. In the event Mr. Goldsmith is terminated for any reason, under most circumstances, the Company is required to reimburse him for any unused holiday entitlements.
Following service of notice to terminate the employment by either party, which is required to be given with not less than nine months’ prior written notice, the Company may place Mr. Goldsmith on garden leave for the whole or part of the remainder of his employment. Under garden leave, Mr. Goldsmith would receive his base salary for the period, but would not be entitled to receive any bonus or other incentive in respect of the period of garden leave.
If Mr. Goldsmith is terminated other than for misconduct, lack of capability or poor performance, or if Mr. Goldsmith terminates employment in response to a fundamental breach of contract by the Company within 12 months following a change of control of the Company (as defined in the employment agreement), subject to certain conditions, Mr. Goldsmith is entitled to (a) 18 months’ base salary, (b) the pro rata bonus Mr. Goldsmith would have received for the year in which his employment is terminated had he not been dismissed, but not including any pro rata bonus for a notice period which is not worked and (c) an amount equivalent to the cost to the Company of providing Mr. Goldsmith with his other employment benefits for 18 months.
Piers Morgan
General Terms. In September 2020, we entered into an employment agreement with Mr. Morgan in connection with his continued employment as our Chief Financial Officer.
Mr. Morgan’s employment agreement provided for an initial base salary of £320,000 ($440,224), which is subject to annual review and redetermination. In addition, Mr. Morgan was entitled to participate in our executive variable cash compensation program. Mr. Morgan was eligible to earn an annual incentive bonus, with a target bonus amount of 45% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances).A discretionary 2021 bonus payment of £100,000 ($137,570) was awarded to Mr. Morgan in connection with the continued fulfillment of his function as Chief Financial Officer until December 31, 2021. Mr. Morgan was also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time.
Settlement Agreement. On July 29, 2021, we entered into a settlement agreement with Mr. Morgan, which provided, among other things, that Mr. Morgan would receive (i) his salary up to his termination date of December 31, 2021, (ii) compensation for any outstanding holiday accrued and unused as of the termination date and (iii) his contractual benefits up to his termination date of December 31, 2021. Mr. Morgan did not receive any additional payments in connection with his voluntary termination with the Company.
As part of Mr. Morgan’s settlement agreement with the Company, there were two modifications in relation to his previously granted options regarding vesting condition accelerating some options to be vested by December 31, 2021 and expected terms changing from 90 days to 6 months after final employment date, which resulted in an additional charge of $123,260 for the Company under FASB ASC Topic 718.
Guy Goodwin
General Terms. In July 2021, we entered into an employment agreement with Dr. Goodwin in connection with his appointment as our Chief Medical Officer.
Dr. Goodwin’s employment agreement provides for a base salary of £324,450 ($446,346), which is subject to annual review and redetermination. In addition, Dr. Goodwin is entitled to participate in our executive variable cash compensation program. In his employment agreement, Dr. Goodwin is eligible to earn an annual incentive bonus, with a target bonus amount of 35% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances) as determined by our Board of Directors in its discretion. Dr. Goodwin is only entitled to payment of a bonus payment if he is in the Company’s employment on the date that the bonus is paid and is not eligible for a bonus payment if he is subject to any disciplinary action or investigation at the date any bonus is being considered or paid. Dr. Goodwin is also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time.
Payments upon Termination. The Company may, in its discretion, terminate Dr. Goodwin’s employment at any time with immediate effect by providing notice to Dr. Goodwin that it is exercising its right and will make a PILON. Such PILON is equal to the base salary which Dr. Goodwin would be entitled to receive during the notice period of three months less deductions required by law and will be paid within 28 days.
Dr. GoodwinOwens is subject to immediate termination and is not entitled to any further payment, including any PILON which the Company is entitled to recover if payment was already made, other than amounts accrued as of the termination date in the event he is terminated for certain reasons for cause, including gross misconduct, serious breach of hisher employment agreement, gross negligence or incompetence and certain other requirements, as set forth in hisher employment agreement. In the event Dr. GoodwinMr. Owens is terminated for any reason, under most circumstances, the Company is required to reimburse him for any unused holiday entitlements.
Following service of notice to terminate the employment by either party, which is required to be given with not less than threenine months’ prior written notice, the Company may place Dr. GoodwinMr. Owens on garden leave for the whole or part of the remainder of hisher employment. Under garden leave, Dr. GoodwinMr. Owens would receive his base salary for the period, but would not be entitled to receive any bonus or other incentive in respect of the period of garden leave. If Dr. GoodwinMr. Owens is terminated other than for misconduct, lack of capability or poor performance, or if Dr. GoodwinMr. Owens terminates employment in response to a fundamental breach of contract by the Company within 12 months following a change of control of the Company (as defined in the employment agreement), subject to certain conditions, Dr. GoodwinMr. Owens is entitled to (a) 12 months’ base salary, (b) the pro rata bonus Dr. GoodwinMr. Owens would have received for the year in which his employment is terminated had he not been dismissed, but not including any pro
rata bonus for a notice period which is not worked and (c) an amount equivalent to the cost to the Company of providing Dr. GoodwinMr. Owens with his other employment benefits for 12 months. Ekaterina Malievskaia General Terms. In September 2020, we entered into an employment agreement with Dr. Malievskaia in connection with her continued employment as our Chief Innovation Officer. Dr. Malievskaia’s employment agreement provides for an initial base salary of £300,000 ($412,710)371,130), which is subject to annual review and redetermination. This salary was increased to £306,000 ($420,964)378,563), effective January 1, 2022. In addition, Dr. Malievskaia is entitled to participate in our executive variable cash compensation program. In her employment agreement, Dr. Malievskaia is eligible to earn an annual incentive bonus, with a target bonus amount of 45% of her base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances). Dr. Malievskaia is also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time. Payments upon Termination. The Company may, in its discretion, terminate Dr. Malievskaia’s employment at any time with immediate effect by providing notice to Dr. Malievskaia that it is exercising its right and will make a PILON. Such PILON is equal to the base salary which Dr. Malievskaia would be entitled to receive during the notice period of nine months less deductions required by law and will be paid within 28 days. Dr. Malievskaia is subject to immediate termination and is not entitled to any further payment, including any PILON which the Company is entitled to recover if payment was already made, other than amounts accrued as of the termination date in the event he is terminated for certain reasons for cause, including gross misconduct, serious breach of her employment agreement, gross negligence or incompetence and certain other requirements, as set forth in her employment agreement. In the event Dr. Malievskaia is terminated for any reason, under most circumstances, the Company is required to reimburse him for any unused holiday entitlements. Following service of notice to terminate the employment by either party, which is required to be given with not less than nine months’ prior written notice, the Company may place Dr. Malievskaia on garden leave for the whole or part of the remainder of her employment. Under garden leave, Dr. Malievskaia would receive her base salary for the period, but would not be entitled to receive any bonus or other incentive in respect of the period of garden leave. If Dr. Malievskaia is terminated other than for misconduct, lack of capability or poor performance, or if Dr. Malievskaia terminates employment in response to a fundamental breach of contract by the Company within 12 months following a change of control of the Company (as defined in the employment agreement), subject to certain conditions, Dr. Malievskaia is entitled to (a) 12 months’ base salary, (b) the pro rata bonus Dr. Malievskaia would have received for the year in which his employment is terminated had she not been dismissed, but not including any pro rata bonus for a notice period which is not worked and (c) an amount equivalent to the cost to the Company of providing Dr. Malievskaia with her other employment benefits for 12 months.
2020 Share Option and Incentive Plan In September 2020, we adopted the 2020 Plan. The 2020 Plan allows the Compensation and Leadership Development Committee to make equity-based and cash-based incentive awards to our officers, employees, directors and other key persons (including consultants). We have initially reserved 2,074,325 ordinary shares (the “Initial Limit”) for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by four percent of the outstanding number of ordinary shares on the immediately preceding December 31, or such lesser number of shares as determined by ourCompensation and Leadership Development Committee (the “Annual Increase”). This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. The ordinary shares underlying any awards that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by us prior to vesting, satisfied without any issuance of shares, expire or are otherwise terminated (other than by exercise) under the 2020 Plan will be added back to the ordinary shares available for issuance under the 2020 Plan.
Nate PoulsenThe maximum aggregate number of shares that may be issued in the form of incentive share options shall not exceed the Initial Limit cumulatively increased on January 1, 2022 and on each January 1 thereafter by the lesser of the Annual Increase for such year or 2,074,325 ordinary shares.
General Terms. In SeptemberThe 2020 we entered into an employment agreement with Mr. Poulsen in connection with his continued employment asPlan is administered by our General CounselCompensation and Chief Legal Officer.
Mr. Poulsen’s employment agreement providedLeadership Development Committee. Our Compensation and Leadership Development Committee has full power to select, from among the individuals eligible for an initial base salaryawards, the individuals to whom awards will be granted, to make any combination of $370,000. In addition, Mr. Poulsen was entitledawards to participate in our executive variable cash compensation program. In his employment agreement, Mr. Poulsen was eligibleparticipants, and to earn an annual incentive bonus, with a target bonus amountdetermine the specific terms and conditions of 35%each award, subject to the provisions of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances). Mr. Poulsen was also2020 Plan. Persons eligible to participate in allthe 2020 Plan will be those full or part-time officers, employees, non-employee directors and other key persons (including consultants) as selected from time to time by our generally-available employee benefit plansCompensation and programs.Leadership Development Committee in its discretion.
Transition Agreement. On September 29, 2021, we entered into a transition agreement with Mr. Poulsen.UnderThe 2020 Plan permits the termsgranting of options to purchase ordinary shares intended to qualify as incentive share options under Section 422 of the transition agreement, Mr. Poulsen ceasedCode, options intended to servequalify as U.K. tax advantaged options under our company share option plan, or CSOP, which is a sub-plan under the General Counsel2020 Plan and Chief Legal Officeroptions that do not so qualify for any tax advantages. Other than the nominal cost options granted to non-U.S. tax persons in lieu of restricted share units, the option exercise price of each option will be determined by our Compensation and tookLeadership Development Committee but may not be less than 100% of the fair market value of our ordinary shares on the role of Chief Legal Officer, IP until his termination date. The transition agreement also provided, among other things, that Mr. Poulsen would receive (i) his salary up to his termination date of December 31, 2021, (ii) his contractual benefits up to his terminationgrant. The term of each option will be fixed by our Compensation and Leadership Development Committee and may not exceed ten years from the date of December 31, 2021,grant. Our Compensation and (iii)Leadership Development Committee development committee will determine at what time or times each option may be exercised.
Our Compensation and Leadership Development Committee may award share appreciation rights subject to such conditions and restrictions as it may determine. Share appreciation rights entitle the continued vestingrecipient to ordinary shares, or cash, equal to the value of his outstanding equity awards through his terminationthe appreciation in our share price over the exercise price. The exercise price of each share appreciation right may not be less than 100% of the fair market value of the ordinary shares on the date of December 31, 2021.grant. UnderOur Compensation and Leadership Development Committee may award restricted shares and restricted share units to participants subject to such conditions and restrictions as it may determine. These conditions and restrictions may include the termsachievement of hiscertain performance goals and/or continued employment agreementwith us through a specified vesting period. Our Compensation and transition agreement,Leadership Development Committee may also grant ordinary shares that are free from any restrictions under the 2020 Plan. Unrestricted shares may be granted to participants in recognition of past services or other valid consideration and may be issued in lieu of cash compensation due to such participant. Our Compensation and Leadership Development Committee may grant cash bonuses under the 2020 Plan to participants, subject to the achievement of certain performance goals.
The 2020 Plan provides that in the case of, and subject to, the consummation of a “sale event” as defined in the 2020 Plan, all outstanding awards may be assumed, substituted or otherwise continued by the successor entity. To the extent that the successor entity does not assume, substitute or otherwise continue such awards, then (i) all share options and share appreciation rights will automatically become fully exercisable and the restrictions and conditions on all other awards with time-based conditions will automatically be deemed waived, and awards with conditions and restrictions relating to the attainment of performance goals may become vested and non-forfeitable in connection with his departurea sale event in the Compensation and Leadership Development Committee’s discretion and (ii) upon the effectiveness of the sale event, the 2020 Plan and all awards will automatically terminate. In the event of such termination, (i) individuals holding options and share appreciation rights will be permitted to exercise such options and share appreciation rights (to the extent exercisable) prior to the sale event, or (ii) we may make or provide for a cash payment to participants holding options and share appreciation rights equal to the difference between the per share cash consideration payable to shareholders in the sale event and the exercise price of the options or share appreciation rights (to the extent then exercisable). Our Board may amend or discontinue the 2020 Plan and our Compensation and Leadership Development Committee may amend the exercise price of options and amend or cancel outstanding awards for purposes of satisfying changes in law or any other lawful purpose but no such action may adversely affect rights under an award without the holder’s consent. Certain amendments to the 2020 Plan require the approval of our shareholders. No awards may be granted under the 2020 Plan after the date that is ten years from employment with the Company and subject to certain other conditions, Mr. Poulsen was entitled to nine months of his base pay and an additional $615,000 as severance. Mr. Poulsen was also entitled to his earned base salary, any unused vacation time, unpaid expense reimbursements and any vested benefits through the termination date. Since Mr. Poulsen did not breach any of his continuing obligations through his termination date of December 31, 2021, he received $892,500 (an amount equal to nine months of his base salary plus an additional $615,000) as severance and $134,472 for his 2021 annual incentive compensation. Potential Payments upon Termination or Change in Control
The following table sets forth the estimated payments payable to our NEOs upon termination of employment under various circumstances. Payments and benefits are estimated assuming that the triggering event took place on December 31, 2021. There can be no assurance that a triggering event would produce the same or similar results as those estimated below if such event occurs on any other date or at any other price, of if any other assumption used to estimate potential payments and benefits is not correct. Due to the number of factors that affect the nature and amount of any potential payments or benefits, any actual payments and benefits may be different. GBP amounts have been converted to USD using the 2021 average FX rate (£1:$1.3757).shareholder approval.
| | | | | | | | | | | | | | | | | | | Name | Triggering Event (1) | Cash based on Base Salary ($)(2) | Pro Rated Annual Bonus ($) | Benefits ($)(3) | Accrued Vacation ($)(4) | | George Goldsmith | Notice of immediate termination by the Company without cause | 438,504 | — | — | 59,637 | | Notice by the Company or employee to termination and the employee is on garden leave | 438,504 | — | — | — | | Termination by the Company or by the employee in response to a fundamental breach of contract by the Company within 12 months following a Change in Control (5) | 877,009 | 321,570 | 55,956 | 59,637 | | Termination for cause | — | — | — | 58,637 | | Guy Goodwin | Notice of immediate termination by the Company without cause | 111,584 | — | — | 44,633 | | Notice by the Company or employee to terminate and the employee is on garden leave | 111,584 | — | — | — | | Termination by the Company or by the employee in response to a fundamental breach of contract by the Company within 12 months following a Change in Control(5) | 446,335 | 64,572 | — | 44,633 | | Termination for cause | — | — | — | 44,633 | | Ekaterina Malievskaia | Notice of immediate termination by the Company without cause | 309,525 | — | — | 41,270 | | Notice by the Company or employee to terminate and the employee is on garden leave | 309,525 | — | — | — | | Termination by the Company or by the employee in response to a fundamental breach of contract by the Company within 12 months following a Change in Control(5) | 412,700 | 231,800 | 24,635 | 41,270 | | Termination for cause | — | — | — | 41,270 |
(1) The vesting offollowing table sets forth information concerning the outstanding equity awards is only accelerated in the event of termination at the discretionheld by each of the administrator.named executive officers as of December 31, 2022:
(2) In | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | Stock Awards | | | | | | | | | | | Market | | | | | | | | | Number of | | Value of | | Number of Securities | | | | | Shares or | | Shares or | | Underlying Unexercised | | Option | | | Units That | | Units That | | Options | | Exercise | | Option | Have Not | | Have Not | | Exercisable | | Unexercisable | | Price | | Expiration | Vested | | Vested | | Name | (#) | | (#) | | ($) | | Date | (#) | | ($) (1) | | Kabir Nath (2) | — | | 600,000 | | 14.94 | | 7/31/2032 | | | | | (5) | | | | | | | | 50,000 | | 401,500 | | George Goldsmith (3) | 63,900 | | 49,700 | | 17.00 | | 9/18/2030 | | | | | (4) | 36,042 | | 136,958 | | 15.75 | | 1/31/2032 | | | | | (6) | | | | | | | | 19,561 | | 157,075 | | (7) | | | | | | | | 29,000 | | 232,870 | | Matthew Owens (8) | — | | 100,000 | | 15.75 | | 1/31/2032 | | | | | (9) | | | | | | | | 12,400 | | 99,572 | | Ekaterina Malievskaia (3) | 47,925 | | 37,275 | | 17.00 | | 9/18/2030 | | | | | (4) | 15,625 | | 59,375 | | 15.75 | | 1/31/2032 | | | | | (6) | | | | | | | | 19,561 | | 157,075 | | (7) | | | | | | | | 13,000 | | 104,390 |
(1) Market value has been computed in accordance with SEC rules as the eventnumber of immediate termination without causeunvested shares or units multiplied by the Company,closing price per share of our ADSs on The Nasdaq Global Select Market as of December 30, 2022 ($8.03). (2) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is August 1, 2022. This grant was awarded outside the 2020 Plan pursuant to the inducement grant exception under Nasdaq Listing Rule 5635(c). (3) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is September 18, 2020. This grant was made under the 2020 Plan. (4) Options vest over a 4 year service period in 48 equal monthly installments, subject to continued service through each applicable vesting date. The vesting commencement date is February 1, 2022. This grant was made under the 2020 Plan. (5) The restricted share units vest in four equal annual installments, subject to continued service through each applicable vesting date. The vesting commencement date is August 1, 2022. This grant was made under the 2020 Plan. (6) The restricted share units are subject to 25% vesting upon the earlier of (i) the one year anniversary of the date of grant, or if(ii) the executive orfirst day following the six-month anniversary of the listing of the Company terminate’s ordinary shares on any stock exchange on which the executive’s employment,closing price of the shares is 20% higher than the listing price for at least five consecutive trading days. They vest quarterly thereafter over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is August 12, 2021. This grant was made under the 2017 Plan. (7) The restricted share units vest in four equal annual installments, subject to continued service through each applicable vesting date. The vesting commencement date is February 1, 2022. This grant was made under the 2020 Plan. (8) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and assuming the executivebalance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is placed on garden leave forFebruary 1, 2021. This grant was made under the full2020 Plan. (9) The restricted share units vest in four equal annual installments, subject to continued service through each applicable notice period, (i) Mr. Goldsmith and Dr. Malievskaia are each entitled to nine months’ salary and (ii) Dr. Goodwinvesting date. The vesting commencement date is entitled to three months salary.February 1, 2022. This grant was made under the 2020 Plan.
(3) Benefits received byPAY VERSUS PERFORMANCE
The following table shows the total compensation for each of our principal executive officers (each a "PEO") and the average compensation for our other named executive officers during the last two fiscal years ended December 31, 2022 and 2021 compared to our net income and total shareholder return for the last two fiscal years.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Year | Summary Compensation Table Total for First PEO(1) | Summary Compensation Table Total for Second PEO(2) | Compensation Actually Paid to First PEO(1)(4) | Compensation Actually Paid to Second PEO(2)(5) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers(3) | Average Compensation Actually Paid to Non-PEO Named Executive Officers(3)(6) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return | Net Income | | (a) | (b) | (b) | (c) | (c) | (d) | (e) | (f) | (g) | | 2022 | 2,977,030 | 7,643,576 | 786,153 (4) | 3,848,172 (4) | 1,659,322 | 639,499 (4) | 47 | (91,505,000) | | 2021 | 943,524 | — | (2,553,688) (5) | — | 1,215,021 | (1,893,965) (5) | 130 | (71,742,000) |
(1) Mr. Goldsmith served as our PEO throughout 2021 and Dr.during 2022 until July 31, 2022. (2) Mr. Nath served as our PEO beginning on August 1, 2022.
(3) For fiscal 2022, our non-PEO named executive officers were Matthew Owens and Ekaterina Malievskaia. For fiscal 2021, our non-PEO named executive officers were Ekaterina Malievskaia, upon termination relates to health insurance. Dr.Guy Goodwin, does not participate in our benefits plan.Piers Morgan (our former Chief Financial Officer) and Nate Poulsen (our former General Counsel).
(4) Assumes each Named Executive Officer has 26 accrued but untaken holidays. InThe 2022 compensation actually paid to our PEO and the event any Named Executive Officer ceasesaverage compensation actually paid to be an employeeour non-PEO named executives reflects the following adjustments from total compensation reported in the Summary Compensation Table:
| | | | | | | | | | | | | First PEO | Second PEO | Average of Non-PEO's | | Total compensation reported in the Summary Compensation Table | 2,977,030 | 7,643,576 | 1,659,322 | | Deduct the equity compensation reported in the Summary Compensation Table in column (Stock Awards) and column (Option Awards), | (2,150,660) | (7,177,631) | (1,061,051) | | Add year end fair value all awards granted during 2022 that are outstanding and unvested as of the end of the fiscal year; | 881,954 | 3,382,227 | 476,050 | | Add change in fair value (from prior year-end) of prior year equity awards that are unvested and outstanding | (854,742) | — | (354,936) | | Add for awards that were granted and vested in 2022, the fair value as of the vesting date | 264,337 | — | 57,296 | | Add the change in fair value (from prior year-end to vesting date) of prior year equity awards that vested in the 2022 | (331,766) | — | (137,183) | | Compensation Actually Paid for Fiscal Year 2022 | 786,153 | 3,848,172 | 639,498 |
(5) The 2021 compensation actually paid to our first PEO and the average compensation actually paid of our non-PEO named executives reflects the following adjustments from total compensation reported in the Summary Compensation Table:
| | | | | | | | | | First PEO | Average of Non-PEO's | | Total compensation reported in the Summary Compensation Table | 943,524 | 1,215,022 | | Deduct the equity compensation reported in the Summary Compensation Table in column (Stock Awards) and column (Option Awards), | — | (485,111) | | Add year end fair value all awards granted during 2021 that are outstanding and unvested as of the end of the fiscal year; | — | 353,522 | | Add change in fair value (from prior year-end) of prior year equity awards that are unvested and outstanding | (2,691,551) | (1,331,837) | | Add for awards that were granted and vested in 2021, the fair value as of the vesting date | — | — | | Add the change in fair value (from prior year-end to vesting date) of prior year equity awards that vested in 2021 | (785,661) | (385,451) | | Subtract for any awards granted in any prior fiscal year that fail to meet the applicable vesting conditions during 2021, the amount equal to the fair value at the end of the prior fiscal year | — | (1,260,109) | | Compensation Actually Paid for Fiscal Year 2021 | (2,533,688) | (1,893,964) |
Analysis of the Company, regardlessInformation Presented in the Pay Versus Performance Table
We generally seek to incentivize long-term performance, and therefore do not specifically align our performance goals with “compensation actually paid” (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the reason,relationships between information presented in the Pay Versus Performance table. Since our second PEO was not employed during 2021, he or she would be entitledis not included in either of the below comparisons.
Compensation Actually Paid and Net Loss
As a clinical-stage company primarily focused on research and development of novel therapies to paymenttreat series mental health conditions, our company has not historically utilized net income (loss) as a performance measure for any accrued but untaken holiday equalour executive compensation program. From 2021 to 1/260th of his or her salary for each day. If either party has served notice2022, our net loss increased and the compensation actually paid to terminate, the Company may require theour first PEO and named executive to take any accrued but unused holiday entitlement during the notice period. Any accrued but unused holiday entitlement shall be deemed to be taken during any period of garden leave. (5) In the event the executive’s employment is terminated by the Company or by the employee in response toofficers as a fundamental breach of contract by the Company within 12 months following a change in control, (a) Mr. Goldsmith is entitled to 18 months salary, his pro rated bonus and an amount equivalent to the cost to the Company of providing Mr. Goldsmith with 18 months of employment benefits, (b) Dr. Goodwin is entitled to 12 months’ salary, his pro rated bonus and an amount equivalent to the cost to the Company of providing Mr. Goldsmith with 12 months of employment benefits, and (c) Dr. Malievskaia is entitled to 12 months’ salary, her pro rata bonus, and (c) an amount equivalent to the cost to the Company of providing Dr. Malievskaia with her other employment benefits for 12 months.group (excluding our PEOs) also increased between those years.
Each
Compensation Actually Paid and TSR
As shown in the following graph, the compensation actually paid to our first PEO and the average amount of Mr. Poulsen and Mr. Morgan were no longer servingcompensation actually paid to our named executive officers as a group (excluding our First PEO) during the periods presented are negatively correlated. As discussed above in "Executive Compensation - Primary Elements of Compensation Program" we use a combination of short-term cash incentive compensation opportunities for our named executive officerofficers, in the form of annual cash bonuses to incentivize and award delivery of the Company atCompany’s strategy and corporate objectives, and long-term equity incentive compensation consisting of share options, which provide value only if the endmarket price of fiscal year 2021. Additionally, since Mr. Poulsen did not breach anyour shares increases and if the executive officer continues in our employment over the vesting period, and restricted share units, which provide value only if the executive officer continues in our employment over the vesting period. These equity awards strongly align our executive officers’ interests with those of hisour shareholders by providing a continuing obligations through his termination date, he received $892,500 (an amount equalfinancial incentive to nine monthsmaximize long-term value for our shareholders and by encouraging our executive officers to continue in our employment for the long-term.
Mr. Morgan did not receive any termination related payments in connection with his voluntary termination of employment with the Company.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS Equity Compensation Plans Table The following table sets forth information as of December 31, 20212022 regarding ordinary shares that may be issued under our equity compensation plans: | | Plan Category | Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (#) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights ($) (1) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column) (3) | Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (#) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights ($) (1) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column) (3)(4) | Equity Compensation Plans Approved by Security Holders (2) | Equity Compensation Plans Approved by Security Holders (2) | 3,195,503 (4) | 13.53 | 1,260,865 | Equity Compensation Plans Approved by Security Holders (2) | 4,492,732 | $12.08 | 1,390,436 | Equity Compensation Plans not Approved by Security Holders | Equity Compensation Plans not Approved by Security Holders | — | — | Equity Compensation Plans not Approved by Security Holders | 600,000 | $1.78 | — | | Total | Total | 3,915,503 | 13.53 | 1,260,865 | Total | 5,092,732 | $13.85 | 1,390,436 |
(1) The weighted average exercise price is calculated based solely on outstanding share options. (2) Includes the following plans: our 2020 Plan, our 2017 Plan and our Employee Stock Purchase Plan (“ESPP”). (3) The Company initially reserved 2,074,325 of its ordinary shares for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by up to 4% of the outstanding number of ordinary shares on the immediately preceding December 31, or such lesser number of shares as determined by our Compensation and Leadership Development Committee. This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. The total number of ordinary shares that may be issued under the 2020 Plan was 2,074,3253,755,120 shares as of December 31, 2021,2022, of which 406,737 667,802shares remained available for future grant. As of December 31, 2021, the Company was authorized under the shareholder agreements to issue a total of 13,601,246 ordinary shares, including shares underlying options granted pursuant to the 2017 Plan. Forfeitures are accounted for as they occur. As of December 31, 2021, there were 514,075 shares available for issuance as incentives to the Company’s employees and directors, which includes shares underlying options that may be granted from time to time subsequent to December 31, 2021 under the terms of the 2017 Plan.
The ESPP initially reserves and authorizes the issuance of up to a total of 340,053 ordinary shares to participating employees. The ESPP provides that the number of shares reserved and
available for issuance will automatically increase each January 1, beginning on January 1, 2022 and each January 1 thereafter through January 1, 2022, by the lesser of (i) 1% of the outstanding number of ordinary shares on the immediately preceding December 31 or (ii) 510,058 ordinary shares. The number of shares reserved under the ESPP is subject to change in the event of a share split, share dividend or other change in our capitalization. On October 1, 2021, the Company launched the Share Incentive Plan and the ESPP, through which employees can purchase shares at a discounted price. At the end of each six months,month purchase period, shares will automatically be purchased at the lower of the opening and closing price of the shares for the savingpurchase period minus a 15% discount.
(4) Amount does not include any purchase rights accruing under the ESPP during the current purchase period, which commenced on OctoberNovember 1, 2021,2022, because the purchase right (and therefore the number of shares to be purchased) will not be determined until the end of the purchase period on March 31, 2022.April 30, 2023.
(5) On August 1, 2022, we granted a non-qualified share option to purchase an aggregate of 600,000 shares to Mr. Nath in connection with his appointment as Chief Executive Officer. In accordance with Nasdaq Listing Rule 5635(c)(4), the non-qualified share option award was approved by Compensation and Leadership Development Committee and made as a material inducement to Mr. Nath’s entry into employment as our new Chief Executive Officer. The non-qualified share option has a 10-year term and vests as to one-fourth on August 1, 2023 (the first anniversary of his employment commencement date) and as to the remaining three-fourths in equal monthly installments over the following 36 months, subject to Mr. Nath remaining an employee on the applicable vesting dates. The non-qualified share option has other terms that mirror those of non-qualified share options granted under our 2020 Plan and the standard form of non-qualified share option agreement.
AUDIT AND RISK COMMITTEE REPORT The Audit and Risk Committee oversees the accounting and financial reporting processes of COMPASS Pathways plc (the “Company”) and the audits of the Company’s financial statements, evaluates auditor performance, manages relations with the Company’s independent registered public accounting firm and evaluates policies and procedures relating to internal control systems. The Audit and Risk Committee operates under a written Audit and Risk Committee charter that has been adopted by the Board of Directors of the Company (the “Board”). All members of the Audit and Risk Committee currently meet the independence and qualification standards for audit committee membership set forth in the listing standards provided by Nasdaq and the U.S. Securities and Exchange Commission (“SEC”), and the Board has determined that Annalisa Jenkins and Linda McGoldrick are “audit committee financial experts,” as the SEC has defined that term in Item 407 of Regulation S-K. The Audit and Risk Committee members are not professional accountants or auditors. The members’ functions are not intended to duplicate or to certify the activities of management and the independent registered public accounting firm. The Audit and Risk Committee serves a board-level oversight role in which it provides advice, counsel and direction to management and the auditors on the basis of the information it receives, discussions with management and the auditors, and the experience of the Audit and Risk Committee’s members in business, financial and accounting matters. The Audit and Risk Committee oversees the Company’s financial reporting process on behalf of the Board. The Company’s management has the primary responsibility for the financial statements and reporting process, including the Company’s system of internal controls. In fulfilling its oversight responsibilities, the Audit and Risk Committee reviewed with management the audited financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021.2022. This review included a discussion of the quality and the acceptability of the Company’s financial reporting, including the nature and extent of disclosures in the financial statements and the accompanying notes. The Audit and Risk Committee also reviewed the progress and results of the testing of the design and effectiveness of its internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002. The Audit and Risk Committee also reviewed with PricewaterhouseCoopers LLP (“PwC”), our independent registered public accounting firm, which is responsible for expressing an opinion on the conformity of the audited financial statements with accounting principles generally accepted in the United States of America, their judgments as to the quality and the acceptability of the Company’s financial reporting and such other matters as are required to be discussed with the Committee by Public Company Accounting Oversight Board (“PCAOB”) AU 380, Communications with Audit Committees, and SEC Regulation S-X Rule 207, Communication with Audit Committees. The Audit and Risk Committee has received the written disclosures and the letter from PwC required by the applicable requirements of the PCAOB regarding PwC’s communications with the audit committee concerning independence. The Audit and Risk Committee has discussed with PwC its independence from management and the Company. In addition to the matters specified above, the Audit and Risk Committee discussed with PwC the overall scope, plans and estimated costs of their audit. The Audit and Risk Committee met with PwC periodically, with and without management present, to discuss the results of PwC’s examinations, the overall quality of the Company’s financial reporting and PwC’s reviews of the quarterly financial statements, and drafts of the quarterly and annual reports. Based on the reviews and discussions referred to above, and subject to the limitations of the Audit and Risk Committee’s role and responsibilities referred to above and in the Audit and Risk Committee charter, Audit and Risk Committee recommended to the Board that the Company’s audited financial statements should be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 20212022 for filing with the SEC.
| | | | | The Audit and Risk Committee of the Board | | Linda McGoldrick, Chair Annalisa Jenkins Robert McQuade |
The information contained in this Audit and Risk Committee report shall not be deemed to be “soliciting material,” “filed” with the SEC, subject to Regulations 14A or 14C of the Exchange Act, or subject to the liabilities of Section 18 of the Exchange Act. No portion of this audit and risk committee report shall be deemed to be incorporated by reference into any filing under the Securities Act, or the Exchange Act, through any general statement incorporating by reference in its entirety the proxy statement in which this report appears, except to the extent that we specifically incorporate this report or a portion of it by reference. In addition, this Audit and Risk Committee report shall not be deemed filed under either the Securities Act or the Exchange Act.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table and related footnotes set forth information with respect to the beneficial ownership of our ordinary shares, as of April 19, 2022,4, 2023, by: •each beneficial owner of more than 5% of our ordinary shares; •each of our named executive officers and directors; and •all of our current executive officers and directors as a group. Beneficial ownership is determined in accordance with the rules and regulations of the SEC. Under these rules, beneficial ownership includes any shares as to which a person has sole or shared voting power or investment power. In computing the number of ordinary shares beneficially owned by a person and the percentage ownership of that person, ordinary shares subject to options, or other rights held by such person that are currently exercisable or will become exercisable within 60 days of April 19, 20224, 2023 are considered outstanding. These ordinary shares, however, are not included in the computation of the percentage ownership of any other person. Applicable percentage ownership is based on 42,511,35745,343687 ordinary shares outstanding as of April 19, 2022.4, 2023. Unless otherwise indicated, addresses of the directors, executive officers and named beneficial owners are in care of COMPASS Pathways plc, 3rd Floor, 1 Ashley Road, Altrincham, Cheshire WA14 2DT, United Kingdom.
| | | Ordinary Shares Beneficially Owned | | Ordinary Shares Beneficially Owned | | Name of Beneficial Owner | Name of Beneficial Owner | | Number | | Percent | Name of Beneficial Owner | | Number | | Percent | | Greater than 5% Shareholders | Greater than 5% Shareholders | | | | | Greater than 5% Shareholders | | | | | ATAI Life Sciences AG(1) | ATAI Life Sciences AG(1) | | 9,435,758 | | 19.74% | ATAI Life Sciences AG(1) | | 9,435,758 | | 20.81% | George Goldsmith(2) | George Goldsmith(2) | | 4,345,249 | | 10.20% | George Goldsmith(2) | | 4,419,691 | | 9.72% | Ekaterina Malievskaia(3) | Ekaterina Malievskaia(3) | | 4,324,653 | | 10.16% | Ekaterina Malievskaia(3) | | 4,371,525 | | 9.62% | | Named Executive Officers and Directors | Named Executive Officers and Directors | | Named Executive Officers and Directors | | George Goldsmith(2) | George Goldsmith(2) | | 4,345,249 | | 10.20% | George Goldsmith(2) | | 4,419,691 | | 9.72% | Piers Morgan(4) | | 206,382 | | * | | Nate Poulsen(5) | | 12,570 | | * | | Kabir Nath(4) | | Kabir Nath(4) | | 12,825 | | * | Michael Falvey(5) | | Michael Falvey(5) | | 56,875 | | * | Guy Goodwin(6) | Guy Goodwin(6) | | 3,750 | | * | Guy Goodwin(6) | | 3,750 | | * | Ekaterina Malievskaia(3) | Ekaterina Malievskaia(3) | | 4,324,653 | | 10.16% | Ekaterina Malievskaia(3) | | 4,371,525 | | 9.62% | | Jason Camm | | — | | * | | Matthew Owens(7) | | Matthew Owens(7) | | 40,063 | | * | Annalisa Jenkins(7)(8) | Annalisa Jenkins(7)(8) | | 118,720 | | * | Annalisa Jenkins(7)(8) | | 138,217 | | * | Thomas Lönngren(8)(9) | Thomas Lönngren(8)(9) | | 124,584 | | * | Thomas Lönngren(8)(9) | | 151,970 | | * | David Norton(9) | | 133,650 | | * | | Linda McGoldrick(10) | | 9,443 | | * | | Robert McQuade(11) | | 1,602,771 | | 3.77% | | Wayne Riley(12) | | 7,000 | | * | | All Current Executive Officers and Directors as a Group (12 persons)(13) | | 10,669,820 | | 24.85% | | David Norton(10) | | David Norton(10) | | 153,147 | | * | Linda McGoldrick(11) | | Linda McGoldrick(11) | | 26,389 | | * | Robert McQuade(12) | | Robert McQuade(12) | | 1,620,167 | | 3.57% | Wayne Riley(13) | | Wayne Riley(13) | | 13,000 | | * | All Current Executive Officers and Directors as a Group (12 persons)(14) | | All Current Executive Officers and Directors as a Group (12 persons)(14) | | 11,072,004 | | 23.99% |
* Represents beneficial ownership of less than one percent.
(1) Based solely on a Schedule 13G/13D/A filed with the SEC by ATAI Life Sciences AG (“ATAI AG”) and ATAI Life Sciences N.V. (“ATAI N.V.”) on December 1, 2021. Consists of 9,435,758 ordinary shares owned by ATAI AG, a wholly-owned subsidiary of ATAI N.V. ATAI Life Sciences N.V. and ATAI Life Sciences AG both hold shared voting and dispositive power over 9,435,758 shares. ATAI Life Sciences AG is a German public limited company. Its address is Barer Straße 7, 80333 München, Germany. (2) Represents (i) 4,278,3394,280,702 ordinary shares, (ii) 2,7942,795 ordinary shares issuable upon the settlementvesting of RSUs releasable within 60 days of April 19, 20224, 2023 and (ii) 64,116136,194 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 4, 2023. Mr. Goldsmith and Dr. Malievskaia are married
but they expressly disclaim beneficial ownership of each other’s shares in the Company. Pursuant to the terms of call option agreements dated May 19, 2022.2020, as amended and restated on July 21, 2020, as further amended and restated on September 9, 2020, and as further amended effective February 15, 2023, Lars Christian Wilde, a former co-founder of the Company, has an option to purchase 776,565 of our ordinary shares for an exercise price of less than £0.01 per share from each of Mr. Goldsmith and Dr. Malievskaia, exercisable at any time following our initial public offering until September 9, 2033. (3) Represents (i) 4,278,512 ordinary shares, (ii) 2,795 ordinary shares issuable upon vesting of RSUs within 60 days of April 4, 2023 and (iii) 90,218 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 4, 2023. Mr. Goldsmith and Dr. Malievskaia are married but they expressly disclaim beneficial ownership of each other’s shares in the Company.
(3) Represents (i) 4,278,335call option agreements dated May 19, 2020, as amended and restated on July 21, 2020, as further amended and restated on September 9, 2020, and as further amended effective February 15, 2023, Lars Christian Wilde, a former co-founder of the Company, has an option to purchase 776,565 of our ordinary shares (ii) 2,794 ordinary shares issuable upon the settlementfor an exercise price of RSUs releasable within 60 daysless than £0.01 per share from each of April 19, 2022Mr. Goldsmith and (iii) 43,524Dr. Malievskaia, exercisable at any time following our initial public offering until September 9, 2033.
(4) Represents 12,825 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022. Mr. Goldsmith and Dr. Malievskaia are married but they expressly disclaim beneficial ownership of each other’s shares in the Company.4, 2023. (4)
(5) Represents (i) 150,382 ordinary shares and (ii) 56,00056,875 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022.4, 2023. (5) Represents 12,570 ordinary shares.
(6) Represents 3,750(i) 2,062 ordinary shares and (ii) 66,073 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022.4, 2023.
(7) Represents (i) 8,9031,407 ordinary shares and (ii) 38,656 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 4, 2023.
(8) Represents (i) 9,970 ordinary shares, (ii) 1,484 ordinary shares issuable upon vesting of RSUs within 60 days of April 4, 2023 and (iii) 126,763 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 4, 2023. (9) Represents (i) 89,049 ordinary shares and (ii) 62,921 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 4, 2023. (10) Represents (i) 9,970 ordinary shares, (ii) 1,484 ordinary shares issuable upon the settlement of RSUs releasable within 60 days of April 19, 20224, 2023 and (iii) 108,333141,693 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022.4, 2023. (8)
(11) Represents (i) 84,049 ordinary shares and (ii) 40,53526,389 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022.4, 2023. (9)(12) Represents (i) 8,9031,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC and (ii) 1,484 ordinary shares issuable upon the settlement of RSUs releasable within 60 days of April 19, 2022 and (iii) 123,26325,490 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022.
(10) Represents 9,443 ordinary shares underlying4, 2023 held by Dr. McQuade. Dr. McQuade holds the share options to purchase ordinary shares fromfor the Company exercisable within 60 days after April 19, 2022.
(11) Represents (i) 1,594,677 ordinary shares held bybenefit of the McQuade Center for Strategic Research and Development LLC and (ii) 8,094 ordinarydisclaims beneficial ownership of any shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022 held by Dr. McQuade.such share options. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares.
(12)(13) Represents 7,00013,000 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022.4, 2023.
(13)(14) Represents (i) 10,253,20610,266,349 ordinary shares, (ii) 8,5568,558 ordinary shares issuable upon the settlement of RSUs releasable within 60 days of April 19, 20224, 2023 and (iii) 408,058797,097 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 20224, 2023 held by our current officers and directors.
DELINQUENT SECTION 16(a) REPORTS
Under Section 16(a) of the Exchange Act, directors, executive officers, our principal accounting officer and beneficial owners of 10% or more of our common stock, or reporting persons, are required to report to the SEC on a timely basis the initiation of their status as a reporting person and any changes with respect to their beneficial ownership of our common stock. Based solely on our review of copies of such forms that have been filed with the SEC, or written representations from reporting persons, we believe that during the fiscal year ended December 31, 2022, all reporting persons complied with all applicable filing requirements, except with respect to (i) a Form 4 filing made on February 15, 2022 to report grants of share options and restricted share units to Mr. Owens on February 1, 2022, (ii) a Form 3 filing made on February 28, 2022 by ATAI Life Sciences N.V. to report initiation of their status as a reporting person on January 1, 2023, (iii) Form 4 filings made on March 31, 2022 to report grants of restricted share units to each of Mr. Goldsmith and Dr. Malievskaia on February 1, 2022, (iv) a Form 4 filing made on April 6, 2022 to report grants of share options to Mr. Goodwin on February 1, 2022, (v) Form 4 filings made on April 19, 2022 to report grants of share options to each of Mr. Goldsmith and Dr. Malievskaia on February 1, 2022, and (vi) Form 4 filings made on February 3, 2023 to report net withholding of shares to settle taxes upon vesting of restricted stock units held by each of Mr. Goldsmith and Dr. Malievskaia on December 20, 2022.
CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH RELATED PERSONS Other than the compensation arrangements described above under the sections “Director Compensation” and “Executive Compensation Discussion and Analysis” and the transactions described below, in the period from January 1, 2021 through the date of this Proxy Statement, we have engaged in the following transactions with our directors, executive officers or holders of more than 5% of our outstanding share capital and their affiliates, which we refer to as our related parties. AGREEMENTS WITH OUR EXECUTIVE OFFICERS AND DIRECTORS We have entered into employment agreements with our executive officers and service agreements with our non-executive directors. These agreements contain customary provisions and representations, including confidentiality, non-competition, non-solicitation and inventions assignment undertakings by the executive officers. However, the enforceability of the non-competition provisions may be limited under applicable law. FAMILY RELATIONSHIPS George Goldsmith, our Chief Executive Officer and Chairman of our Board Chair, is married to Ekaterina Malievskaia, our Chief Innovation Officer and a member of our Board. On October 5, 2020, Dr. Malievskaia’s son began work with us as Stakeholder Engagement and Operations Associate, and subsequently resigned effective April 16, 2021. As of the date of this Proxy Statement, there were no other family relationships between our executive officers and any of our directors. INSURANCE AND INDEMNIFICATION To the extent permitted by the Companies Act 2006 and in accordance with our Articles of Association, we are empowered to indemnify our directors against any liability they incur by reason of their directorship. Prior to the completion of our IPO, we obtained andWe maintain directors’ and officers’ insurance to insure such persons against certain liabilities. We enteredalso enter into a deed of indemnity with each of our directors and executive officers prior to the completion of our IPO.officers. These agreements and our Articles of Association require us to indemnify our directors and executive officers to the fullest extent permitted by law. RELATED PARTY TRANSACTION POLICY We have adopted a related party transaction policy. This policy became effective on September 17, 2020, the date on which our registration statement on Form F-1 in connection with our IPO was declared effective by the SEC. Pursuant to this policy, the Audit and Risk Committee has the primary responsibility for reviewing and approving or disapproving “related party transactions,” which are transactions between us and related parties in which the related party has a direct or indirect material interest. For purposes of this policy, a related party is defined as a director, executive director, nominee for director, or greater than 5% beneficial owner of any class of our voting securities, and their immediate family members.
DELIVERY OF PROXY MATERIALS Our 2022 Annual Report, on Form 10-K, including audited financial statements, accompanies this Proxy Statement. Copies of our Annual Report on Form 10-K and the exhibits thereto are available from the Company without charge upon written request of a shareholder. Copies of these materials are also available online through the SEC at www.sec.gov. The Company may satisfy SEC rules regarding delivery of proxy materials, including this Proxy Statement and our 2022 Annual Report, by delivering a single set of proxy materials to an address shared by two or more Company shareholders or ADS holders. This delivery method can result in meaningful cost savings for the Company. In order to take advantage of this opportunity, the Company may deliver only a single set of proxy materials to multiple shareholders or ADS holders who share an address, unless contrary instructions are received prior to the mailing date. Similarly, if you share an address with another shareholder or ADS holder and have received multiple copies of our proxy materials, you may write or call us at the address and phone number below to request delivery of a single copy of the proxy materials in the future. We undertake to deliver promptly upon written or oral request a separate copy of the proxy materials, as requested, to a shareholder or ADS holders at a shared address to which a single copy of the proxy materials was delivered. If you are an ordinary shareholder of record and prefer to receive separate copies of proxy materials either now or in the future, please contact Ben Harber, Company Secretary, COMPASS Pathways plc, 3rd Floor, 1 Ashley Road, Altrincham, Cheshire, WA14 2DT, United Kingdom or by telephone at +1 (646) 905-3974. If you hold ADSs and you prefer to receive separate copies of proxy materials either now or in the future, please contact the Depositary, your brokerage firm or bank, as applicable. EACH ORDINARY SHAREHOLDER IS URGED TO COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY FORM. EACH ADS HOLDER IS URGED TO COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ADS PROXY CARD TO CITIBANK, N.A., THE DEPOSITARY FOR THE ADSs.
ADDITIONAL INFORMATION U.K. STATUTORY ANNUAL ACCOUNT AND REPORTS OF THE BOARD OF DIRECTORS AND AUDITORS OF COMPASS PATHWAYS PLC FOR THE YEAR ENDED DECEMBER 31, 20212022 Consistent with its obligations under the U.K. Companies Act 2006, our Board will present at the AGM our U.K. statutory annual accounts and reports for the year ended December 31, 2021,2022, which have been approved by and, where appropriate, signed on behalf of our Board and will be delivered to the Registrar of Companies in the United Kingdom following the AGM. A copy of our U.K. statutory directors’ remuneration report, including the annual report on remuneration, is included as Annex A to this Proxy Statement. A complete copy of our U.K. statutory annual accounts and reports, including the statutory Board of Directors report, strategic report, and auditor’s report on our U.K. accounts will be sent separately to you no less than 21 days prior to the AGM. You will be provided an opportunity to raise questions in relation to such accounts and reports at the AGM. Full accounts and reports will be available for inspection prior to and during the AGM. SHAREHOLDERS' RIGHT TO CALL A GENERAL MEETING Our shareholders have the right to call a meeting of our shareholders. The U.K. Companies Act 2006 generally requires the directors to call a general meeting once we have received requests to do so from shareholders representing at least 5% of our paid-up shares entitled to vote at a general meeting. The U.K. Companies Act 2006 generally prohibits shareholders of a U.K. public limited company from passing written resolutions. However, significant shareholders would, in any case, still have the power to call a general meeting and propose resolutions. These provisions are mandatory under the U.K. Companies Act 2006 and cannot be waived by our shareholders. SHAREHOLDER PROPOSALS Pursuant to Rule 14a-8 under the Exchange Act, in order to be considered for inclusion in our proxy statement for our 20232024 annual general meeting of shareholders, shareholder proposals must be received by the Company at the Office of the Company Secretary, 3rd Floor, 1 Ashley Road, Altrincham, Cheshire, WA14 2DT, United Kingdom no later than 120 days before the anniversary of the date on which we sent our proxy materials for the AGM, or January 11,December 30, 2023. However, if the date of such annual general meeting is more than 30 calendar days from the date of the anniversary of the AGM, then the notice must be received by our Company Secretary a reasonable time before we begin to print and send our proxy materials. To comply with the universal proxy rules, (once effective), shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice at our principal executive offices that sets forth the information required by Rule 14a-19 under the Exchange Act no later than April 17, 2023.3, 2024. We also encourage anyone sending in a shareholder proposal to additionally send such proposals via email AGM@compasspathways.com. Under Section 338 of the U.K. Companies Act 2006, shareholders representing at least 5% of holders entitled to vote on a resolution at an annual general meeting may require the Company to include such resolution in its notice of an annual general meeting. Provided the applicable thresholds are met, notice of the resolution must be received by the Company at the Office of the Company Secretary, 3rd Floor, 1 Ashley Road, Altrincham, Cheshire, WA14 2DT, United Kingdom at least six weeks prior to the date of the annual general meeting, or, if later, at the time notice of the annual general meeting is delivered to shareholders. QUESTIONS? If you have any questions or need more information about the AGM please write to us at: Ben Harber Company Secretary COMPASS Pathways plc 3rd Floor 1 Ashley Road Altrincham Cheshire WA14 2DT United Kingdom
Annex A DIRECTORS’ REMUNERATION REPORT
This part of the Remuneration Report sets out the remuneration policy for the Company. The current Directors’ Remuneration Policy (the “Policy”“Policy”) was approved by shareholders in a binding vote at the AGM held on 22 June 2021. It took effect from the date of approval and applies for a period of three years until 2024. At the 2022 annual general meeting of shareholders, 88.1% of shareholders voted in favour of the proposal to receive and approve, as a non-binding advisory resolution, the U.K. statutory Directors’ Remuneration Report for the year ended 31 December 2021, with 0.1% voted against and 11.8% withheld from such proposal. Key considerations when determining the Policy The Policy was designed by the Committee with a number of specific principles in mind: •attract, retain and motivate high calibre Senior Management and focus them on the delivery of the Company’s strategic and business objectives; •encourage a corporate culture that promotes the highest level of integrity, teamwork and ethical standards; •be competitive against appropriate market benchmarks (being predominantly the US biotech sector) and have a strong link to performance, providing the ability to earn above-market rewards for strong performance; •be simple and understandable, both internally and externally; •encourage increased equity ownership to motivate executives in the overall interests of shareholders, the Company, employees and customers; and •take due account of good governance and promote the long-term success of the Company. In seeking to achieve the above objectives, the Committee is mindful of the views of a broad range of stakeholders in the business and accordingly takes account of a number of factors when setting remuneration including: market conditions; pay and benefits in relevant comparator organizations;organisations; terms and conditions of employment across the Company; the Company’s risk appetite; the expectations of institutional shareholders; and any specific feedback received from shareholders and other stakeholders. During 2020, associated with the Company’s IPO, the Committee determined that it was appropriate to benchmark the salary, bonus and option levels of Senior Management and make necessary adjustments to ensure these remain competitive with UK and US benchmarks. In 2021, the Committee reviewed the peer groups used to benchmark remuneration for Senior Management.
In 2022, the Committee reviewed and updated the peer group used to benchmark remuneration for Senior Management. The directorsDirectors identify any conflicts of interest at the beginning of each boardBoard meeting and the beginning of each Committee meeting. Currently theMr. Goldsmith who served as Chairman and Chief Executive Mr Goldsmith, is alsountil August 2022 and continues to serve as Chairman of the Board, and is married to the Chief Innovation Officer and Executive Director, Dr Malievskaia. The Senior Independent Director, Mr Norton and the Chair of the Compensation and Leadership Development Committee, Dr Jenkins, have assumed the governance role for all matters pertaining to the compensation of Mr Goldsmith and Dr Malievskaia. No conflicts of interest relevant to remuneration have been identified to date. The Policy for Executive Directors CurrentlyDuring 2022 the Company has only twohad three Executive Directors, but the Policy will apply equally to any additional Executive Directors who may be appointed in the future. The Committee annually reviews the operation of the remuneration packages to ensure they are operating within an acceptable risk profile and that they do not inadvertently encourage any economic, social or governance issues.
The total remuneration for the Executive Directors is made up of the following elements: •salary; •benefits; •annual bonus; •long-term incentive awards; and •pension.Pension/401k contribution. Long term incentive awards: The Company adopted the 2020 Share Option Plan, or the 2020 plan and Employee Share Purchase Plan, orthe ESPP, on completion of its Nasdaq IPO in September 2020. On 1 October 2021, the Company launched the Share Incentive Plan (the “SIP”) and the ESPP. The companySince the completion of the Nasdaq IPO, the Company has only issued equity under these two plans since completionand has issued an inducement grant, on such terms as are defined under applicable NASDAQ listing rules, in connection with hiring of its Nasdaq IPO.Mr. Nath as our Chief Executive Officer in 2022. In the period 1 January 2020 to 18 September 2020, the Company granted options under the 2017 Plan.
| | | | | | | Purpose and link to strategy | | Salary | Provides market competitive fixed remuneration that reflects the responsibilities of the role undertaken, the experience of the individual and performance in the role over
time. | | Benefits | Provides market competitive, yet cost-effective employment benefits. | | Annual bonus | To incentivizeincentivise and award delivery of the Company's strategy and corporate objectives
on an annual basis. | | Equity Incentives | To align the interests of Executive Directors and management with long-term shareholder interests and to attract, incentivizeincentivise and retain staff. To incentivizeincentivise and recognizerecognise achievement of longer term corporate objectives and sustained
shareholder value creation. To effectively manage the Group's cash resources. | | Pension | To provide a competitive and tax-efficient pension savings plan which complies with
at least the minimum contributions requirements of the applicable jurisdiction. |
| | | | | | | Operation | | Salary | Reviewed annually taking into account individual responsibilities, experience, performance, inflation and market rates. The Committee will also consider the pay and employment conditions in the wider workforce when determining Executive Directors’ salaries. Where there has been a change in role, or the individual is new to the role, increases could be higher. Salary increases are normally effective from 1 January each year. Salaries are periodically benchmarked against a relevant peer group of biotech companies, most of which are listed on Nasdaq, with others listed on European stock exchanges, with a similar stage of clinical development, and similar
market capitalizationcapitalisation or net assets. | | Benefits | For Executive Directors this includes private medical insurance and life insurance. Other employment benefits may be provided from time to time on similar terms as those of other employees. If an Executive Director is based outside the UK additional benefits and assistance with relocation may be provided which reflect local market norms or legislation. Any reasonable business-related expenses can be reimbursed, including tax there-on. | | Annual bonus | Annual bonus performance targets are set at the start of the year by the Board and performance against objectives is assessed by the Compensation and Leadership Development Committee after the end of the relevant financial year. Bonuses are paid in cash after the award has been approved by the Committee.Committee and, as applicable for the Chief Executive Officer, the Board. | | Equity Incentives | ConditionalLong-term equity incentive awards are granted annually under the 2020 Plan. The awards have time-based vesting conditions and vest over a period of at least three years and may include a mix of share options, restricted share units, performance shares and other awards available for issuance under the 2020 Plan. Awards vest in accordance with the vesting schedule set for the relevant award in its equity agreement.
Under
Executive Directors are eligible to participate in the SIP and ESPP under the same conditions as other employees. The SIP and ESPP generally allow employees to save a portion (up to a specified maximum) of their salary over a six-month savings period and at the end of six months,the savings period, shares will automatically be purchased at the lower of the opening and closing price of the shares for the saving period minus a 15% discount.
The Committee maintains discretion over the types and terms of equity awards granted.
| PensionPension/401(k) | Executive Directors are eligible to join a defined contribution pension scheme. Only base salary is pensionable. Current Executive DirectorsDr Malievskaia and Mr Goldsmith have opted out of pension arrangements.arrangements while Mr Nath receives company 401k contributions. |
| | | | | | | Maximum potential value | | Salary | The current base salary of the Executive Directors is set out in the application of policy section of the Remuneration Report. Whilst there is no prescribed formulaic maximum, any increases will take into account prevailing market and economic conditions and the approach to employee pay throughout the organisation. Base salary increases are awarded at the discretion of the Committee; however, salary increases will normally be no greater than the general increase awarded to the wider workforce, in percentage of salary terms. However, a higher increase may be made where an individual had been appointed to a new role at below-market salary while gaining experience. Subsequent demonstration of strong performance may result in a salary increase which is higher than that awarded to the wider workforce. | | Benefits | The value of each benefit is not predetermined and is typically based upon the cost to the Company of providing said benefit which will vary from year to year based on the cost from third-party providers. | | Annual bonus | The maximum payable to an Executive Director is 125% of the target bonus level for each Executive Director. The target bonus level for the Chief Executive Officer is 60% of base salary (55% in 2021) and Chief Innovation Officer is 55%45% (45% in 2021) of base salary and planned to increase to 60% of base salary in 2022.salary. | | Equity Incentives | The Company initially reserved 2,074,325 of its ordinary shares for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each 1 January, beginning on 1 January 2022, by up to 4% of the outstanding number of ordinary shares on the immediately preceding 31 December, or such lesser number of shares as determined by our Compensation and Leadership Development Committee. This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. capitalisation.
The total number of ordinary shares that may be issued under the 2020 Plan was 2,074,3253,755,120 shares as of 31 December 2021,2022, of which 406,737667,802 shares remained available for future grant.
During the years ended 31 December 31,2022 and 2021, and 2020, the Company granted options to purchase 1,043,7022,120,783 and 3,405,4901,043,702 ordinary shares under the 2020 Plan to employees and non-employees, respectively.
During the year ended 31 December 2022, the Company granted options to purchase 600,000 shares to the Company’s new Chief Executive Officer as an inducement grant, as such term is defined under applicable NASDAQ listing rules. | PensionPension/401(k) | TheFor the pension, the maximum contribution, cash supplement (or combination thereof) payable by the Company is 3% of salary, which is at the same level as the general workforce. For the 401(k) defined contribution plan available to employees, including Executive Directors, in the United States, the Company match is equal to 100% of the amount an employee contributes to the 401(k) plan for each payroll period up to a maximum of 4% of cash compensation earned by such employee. |
| | | | | | | Performance metrics | | Salary | The overall performance of the individual and Company, including against individual performance objectives, is a key determinant for salary increases. | | Benefits | None. | | Annual bonus | ResearchOperational targets related to research and development, business development, financial goals and commercial targetsgoals are discussed with the Compensation and Leadership Development Committee and set at the start of the year by the Board. Details of the performance measures for the current year are provided in the Remuneration Report, subject to any nondisclosure on the basis of commercially-sensitive information. The payment of any bonus is at the absolute discretion of the Committee which has the discretion to override out-turn of the bonus if appropriate to do so, including but not limited to factors such as the underlying financial and operational performance of the Company and individual performance. | | Equity Incentives | Vesting may be on a time-phased basis or subject to performance conditions, as determined at the discretion of the Committee. During the years ended 31 December 2022 and 2021, the Company granted equity awards with time-phased vesting. | PensionPension/401(k) | None. |
The Committee operates the annual bonus and 2020 Plan, in accordance with their rules, and where relevant, the rules and regulations of the U.S. Securities and Exchange Commission and U.S. federal securities laws.NASDAQ listing rules. To maintain an efficient administrative process, the Committee retains the following discretion relating to remuneration: a.the eligibility to participate in the plans; b.the timing of grant of awards and any payments; c.the size of awards and payments (subject to the maximum limits set out in the Policy table above and the respective plan rules); d.the determination of whether any performance conditions have been met; and e.the annual review of performance objectives for the annual bonus plan. In certain exceptional circumstances, such as a material acquisition/divestment of a Group business or a change in the broader business environment, which mean the original performance conditions are no longer appropriate, the Committee may adjust the objectives, alter weightings or set different measures as necessary, to ensure the conditions achieve their original purpose and are not materially less difficult to satisfy. The Directors' service contracts and letters of appointment are kept for inspection at the Company's registered office.Non-Executive Directors are subject to fixed term contracts The Company has a classified Board with each Director serving a three-year term; each Director must seek re-election at the annual general meeting of one, twoshareholders at the end of his or three years. Executive Directors have contracts of indefinite duration.her three-year term.
Historical equity incentive awards Awards which were granted prior to 18 September 18, 2020 are disclosed separately in this Remuneration Report in the Long Term Incentive AwardsStatement of Directors’ Shareholding and Share Interests section. These awards remain eligible to vest, based on their original terms which are described separately in the Directors' Report on Remuneration.Remuneration Report. Annual bonus
The annual bonus is designed to drive the achievement of the Company’s strategic and corporate objectives. These targets are agreed by the Board and selected because of their importance in value creation for shareholders. Objectives are weighted for Executive Directors in proportion to the degree of importance of that objective for the Company. The weightings are agreed by the Committee. Remuneration on recruitment The remuneration package for any new Executive Director will be determined by the Committee in accordance with the terms of the Policy at the time of appointment (including salary, benefits, annual bonus, long-term incentive awards and pension). It is recognised that in order to attract and recruit talented individuals the Policy needs to allow sufficient flexibility with respect to remuneration on recruitment. The following policies apply to the remuneration on recruitment of new Executive Directors: Salary: Base salary will be determined based on the responsibilities of the role, experience of the individual and current market rates. It may be considered necessary to appoint a new Executive Director on or below market rates (e.g. to reflect limited boardBoard experience). In such circumstances, phased increases above those of the wider workforce may be required over an appropriate time period, to bring the salary to the desired market level, subject to the continued development in the role. Annual bonus: The ongoing annual bonus maximum will be in line with that outlined in the policy table for existing Executive Directors, pro-rated to reflect the period of service. Depending on the timing or nature of an appointment it may be necessary to set different initial performance measures and targets for the first year of appointment. Long-term incentive awards: 2020 Plan awards are granted in line with the policy outlined for existing Executive Directors. An award may be made shortly following an appointment. For internal appointments, existing awards will continue on their original terms.
Benefits:Benefits: Benefits provided should be in line with those of existing Executive Directors. For external and internal appointments, where required to meet business needs, reasonable relocation support will be provided. In addition, if it becomes necessary to appoint a new Executive Director from outside the UK, additional benefits may be provided to reflect local market norms or legislation.
Pension:Pension/401k: A company contribution or cash supplement up to the maximum as outlined for existing Executive Directors. Current Executive DirectorsOur Chair and Chief Innovation Officer have opted out of pension arrangements.arrangements while our current Chief Executive Officer receives a company contribution to his 401(k). Any new executives will be offered a pension or 401(k), as applicable, at the same level as the general workforce.
Sign-on payments and buy-out awards:awards: To enable the recruitment of exceptional talent, the Committee may offer additional cash and/or share-based remuneration to take account of and compensate for remuneration that the Executive Director is required to relinquish when leaving a former employer. The Committee will seek to structure any such replacement awards to be no more generous overall in terms of quantum or vesting than the award to be forfeited from the previous employer and will take into account the timing, form and performance requirements of the awards forgone. Where appropriate, any long-term incentive awards will be granted under the 2020 Plan, however, the Committee will have discretion to make use of the flexibility to make awards under any relevant exemptions in the SEC Rules.NASDAQ listing rules. For an internal Executive Director appointment, any variable pay element awarded in respect of the prior role will be allowed to pay out according to its terms. In addition, any other contractual remuneration obligations existing prior to appointment may continue. The fees for any new Chairman and non-Executive Director appointments will be set in accordance with the prevailing policy and at a level that is consistent with those of the existing Chairman and non-Executivenon- Executive Directors. Policy for payments on loss of office
The companyCompany does not have a policy of fixed term employment contracts, however, the Directors are required to retire and are entitled to put themselves forward for re-election at the AGM in accordance with their respective directorDirector class, as prescribed by the Company’s articles of association (“Articles of Association”Association”). The notice period for the existingcurrent Chief Executive Officer’s employment contract is 12 months, for90 days, provided however, that if the Chief Innovation Officer is 9 months, and three months forCompany terminates his employment contract without cause, the existing non-Executive Directors.Chief
Executive Officer is entitled to a cash severance payment equal to one year’s annual salary plus the target annual bonus amount for the year in which such termination occurs, for the Chief Innovation Officer is 9 months, and one months for the existing non- Executive Directors. The Committee’s approach to payments in the event that an Executive Director’s employment is terminated is to take account of the individual circumstances including the reason for termination, individual performance, contractual obligations, potential claims the Executive Director might have against the companyCompany and the terms of the equity incentive plans in which the Executive Director participates. Termination by notice from the Company: up to 12 months’ notice, with the discretion for the Committee to make a payment in lieu of notice for base salary, pension and other benefits that would otherwise have been paid during the notice period. Annual bonus: except for the current Chief Executive Officer who is entitled to his target annual bonus,: there is no automatic contractual entitlement to bonus or pro-rata bonus on termination, although this may be considered at the discretion of the Committee. Long-term incentives:incentives: whether any long-term incentive awards would vest and be exercisable upon loss of office would be subject to the relevant plan rules under which such award was granted. The 2020 Plan allows vesting and exercise of awards in the event of death, retirement, ill-health, injury, redundancy and any other reason at the discretion of the Committee. The Committee retains discretion to determine the extent to which the award will vest, taking into consideration the circumstances. Unvested awards normally lapse, although the Committee retains the power to determine, in accordance with the “good leaver” provisions of the relevant plan rules, what proportion of unvested awards will be retained and what proportion will lapse. In determining this, the Committee will give consideration to the reason for leaving, the extent of achievement of performance objectives at the date of leaving and may decide to pro-rate awards. Change of Control:Control: on a change of control, all unvested awards vest on the date of change of control. Change of control provisions in the Executive Directors’Chief Innovation Officer’s service agreementsagreement provide for a lump sum payment equal to the value of salary, bonus and contractual benefits for 12 months (or 18 months in the case of Mr. Goldsmith) if, within 12 months of the change of control, their employment by the Company is terminated (other than for reason of misconduct and certain other grounds, but including by way of constructive dismissal) less any sums paid by way of notice or payment in lieu of notice.
Additional payments:payments: the Committee reserves the right to make payments it considers reasonable under a settlement agreement, including payment or reimbursement of reasonable legal and professional fees, untaken holiday and any payment for the settlement of potential claims against the Company in the UK or other jurisdictions. Payment or reimbursement of reasonable outplacement fees may also be provided.
The Directors' service contracts are available for inspection at the Company's principal place of business: Fora - Soho 33 Broadwick Street Soho London W1F 0DQ
The Policy forfor the Chairman The Board approves fees payable to the Chairman. The Chairman (who also occupiesoccupied the role of Chief Executive Officer)Officer until August 2022) does not participate in discussions in respect of his own fees. The Policy for the Chief Executive Officer (CEO) The Board approves any compensation paid to the Chief Executive Officer and the Chief Executive Officer does not participate in any discussions relating to his own compensation. The Policy for Non-Executive Directors The Board approves the fees payable to the Company’s non-Executive Directors.
| | | | | | | | | | | | | Remuneration Element | Purpose and link to strategy | Operation and Maximum | Performance Related | | Chair’s fee | To attract and retain a high calibre individual with the requisite experience and knowledge. | The now Chair of the Board, Mr Goldsmith, served part of the year as Chief Executive Officer, is, as noted above, the current Chair of the Board; the Chief Executive Officer doesand did not receive any additional remuneration in respect of his duties as Chair. Executive Chair in 2022. His fee for 2023 was agreed by the Compensation Committee without his participation. Any fees payable in the future will be reviewed by the Committee on a periodic basis against those in similar sized companies to ensure they remain competitive and adequately reflect the time commitments and scope of the role. Any increase in fee levels may be above that of the wider workforce in a particular year to reflect the periodic nature of any review and/or any change in responsibilities/time commitments. The Chair may also receive limited travel and/or hospitality related benefits in connection with the role. The Chair may not receive any consultancy or other payments outside his fee.
| No | | Non-Executive Director fee | To attract and retain high calibre individuals with the requisite experience and knowledge. | The current fee levels are set out in the Non-ExecutiveNon- Executive Director cash fees section of the Remuneration Report. Fees are reviewed on a periodic basis against those in similar sized companies to ensure they remain competitive and adequately reflect the time commitments and scope of the role. A Board fee is paid to each non-Executivenon- Executive Director. Supplemental fees may be paid to the Senior Independent Director and for chairmanship and membership of Committees to recognizerecognise the additional time commitments and responsibilities of these roles. Any increase in fee levels may be above that of the wider workforce in a particular year to reflect the periodic nature of any review and/or any change in responsibilities/time commitments. If business needs arise, non-Executivenon- Executive Directors may also be engaged to provide limited consulting services outside their director responsibilities and receive fees for those services. Non-Executive Directors may also receive limited travel and/or hospitality related benefits in connection with the role. | No | | Non-Executive Director long-term incentive awards | To provide alignment with the interest of shareholders. | The Company has historically awarded share options to all employees and certain Non-Executive Directors in order to align long-term employee interests with those of shareholders, and this will be the case going forward for any new Non-Executive Directors. Notwithstanding anything to the contrary in the 2020 Plan, the value of all Awards awarded under this Plan and all other cash compensation paid by the Company to any Non-Employee Director in any calendar year for services as a Non-Employee Director shall not exceed £750,000. For the purpose of this limitation, the value of any Award shall be its grant date fair value, as determined in accordance with the Accounting Standards Codification (ACS) 718 Compensation – Stock Compensation or successor provision but excluding the impact of estimated forfeitures related to service-based vesting provisions. | No |
Statement of consideration of employees’ pay and remuneration conditions elsewhere in the Group
The Company does not formally consult with employees when drawing up the Policy. However, the Committee is made aware of employment conditions in the wider Group. The same broad principles apply to the Policy both for the Executive Directors and the wider employee population. However, the remuneration for the Executive Directors has a stronger emphasis on variable pay than for other employees. In particular, the following approach is used for the wider employee population in the Group: •Salaries, benefits and pensions are compared to appropriate market rates and set at approximately midmarketmid market level with allowance for role, responsibilities and experience. •When setting salary levels for the Executive Directors, the Committee considers the salary increases provided to other employees. •An annual bonus plan is available to all employees and is based on business and individual performance. Payments under the bonus plan are entirely discretionary.
ANNUAL REPORT ON REMUNERATION Single total figure of remuneration of each Director (audited). The Directors received the following remuneration for the years ended 31 December 31, 20202021 and 2021;2022;
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Base Salary | Bonus | Share-based payments | Other* | Total variable | Total fixed | Total | | | US $ | US $ | US $ | US $ | US $ | US $ | US $ | | George Goldsmith | 2021 | 584,658 | 321,562 | 415,538 | 37,304 | 321,562 | 1,037,500 | 1,359,062 | | 2020 | 453,936 | 234,743 | 567,911 | 34,113 | 234,743 | 1,055,960 | 1,290,703 | | Ekaterina Malievskaia | 2021 | 412,700 | 231,800 | 339,273 | 24,635 | 231,800 | 776,608 | 1,008,408 | | 2020 | 362,287 | 150,403 | 547,627 | 23,708 | 150,403 | 933,622 | 1,084,025 | | David York Norton | 2021 | 62,249 | — | 169,783 | — | — | 232,032 | 232,032 | | 2020 | 16,052 | — | 173,219 | — | — | 189,271 | 189,271 | | Florian Brand1 | 2021 | 13,119 | — | 87,609 | — | — | 100,728 | 100,728 | | 2020 | 10,944 | — | 11,119 | — | — | 22,063 | 22,063 | | Jason Camm2 | 2021 | — | — | (11,764) | — | — | (11,764) | (11,764) | | 2020 | 14,957 | — | 11,119 | — | — | 26,076 | 26,076 | | Annalisa Jenkins | 2021 | 66,032 | — | 169,835 | — | — | 235,867 | 235,867 | | 2020 | 17,511 | — | 176,835 | — | — | 194,346 | 194,346 | | Thomas Lönngren | 2021 | 49,535 | — | 205,092 | — | — | 254,627 | 254,627 | | 2020 | 13,133 | — | 248,321 | — | — | 261,454 | 261,454 | | Robert McQuade | 2021 | 60,529 | — | 166,155 | — | — | 226,684 | 226,684 | | 2020 | 16,052 | — | 11,119 | — | — | 27,171 | 27,171 | | Linda McGoldrick | 2021 | 62,077 | — | 111,116 | — | — | 173,193 | 173,193 | | 2020 | 16,417 | — | 15,609 | — | — | 32,026 | 32,026 | | Wayne Riley3 | 2021 | 38,531 | — | 96,716 | — | — | 135,247 | 135,247 | | 2020 | — | — | — | — | — | — | — | | Total | 2021 | 1,349,430 | 553,362 | 1,749,353 | 61,939 | 553,362 | 3,160,722 | 3,714,084 | | 2020 | 921,289 | 385,146 | 1,762,879 | 57,821 | 385,146 | 2,741,988 | 3,127,135 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Base Salary | Bonus | Share-based payments | Other* | Total variable remuneration | Total fixed remuneration | Total remuneration | | | US $ | US $ | US $ | US $ | US $ | US $ | US $ | | Kabir Nath | 2022 | 243,123 | 145,000 | — | — | 145,000 | 243,123 | 388,123 | | 2021 | — | — | — | — | — | — | — | | George Goldsmith (Executive Chairman) | 2022 | 179,843 | 123,642 | 37,355 | 17,994 | 123,642 | 235,192 | 358,834 | | George Goldsmith (CEO) | 2022 | 311,494 | 171,321 | 52,296 | 22,076 | 171,321 | 385,866 | 557,187 | | 2021 | 584,658 | 321,562 | 846,545 | 37,304 | 321,562 | 1,468,507 | 1,790,069 | | Ekaterina Malievskaia | 2022 | 378,563 | 163,549 | 89,651 | 25,802 | 163,549 | 494,016 | 657,565 | | 2021 | 412,700 | 231,800 | 739,056 | 24,635 | 231,800 | 1,176,391 | 1,408,191 | | David Norton | 2022 | 60,620 | — | 20,426 | — | — | 81,046 | 81,046 | | 2021 | 62,249 | — | 265,031 | — | — | 327,280 | 327,280 | | Florian Brand | 2022 | — | — | — | — | — | — | — | | 2021 | 13,119 | — | — | — | — | 13,119 | 13,119 | | Jason Camm | 2022 | — | — | — | — | — | — | — | | 2021 | — | — | — | — | — | — | — | | Annalisa Jenkins | 2022 | 59,382 | — | 47,601 | — | — | 106,983 | 106,983 | | 2021 | 66,032 | — | 302,913 | — | — | 368,945 | 368,945 | | Thomas Lonngren | 2022 | 45,692 | — | 47,601 | — | — | 93,293 | 93,293 | | 2021 | 49,535 | — | 258,663 | — | — | 308,198 | 308,198 | | Robert McQuade | 2022 | 54,434 | — | — | — | — | 54,434 | 54,434 | | 2021 | 60,529 | — | — | — | — | 60,529 | 60,529 | | Linda McGoldrick | 2022 | 56,290 | — | — | — | — | 56,290 | 56,290 | | 2021 | 62,077 | — | 81,691 | — | — | 143,768 | 143,768 | | Wayne Riley | 2022 | 46,393 | — | — | — | — | 46,393 | 46,393 | | 2021 | 38,531 | — | — | — | — | 38,531 | 38,531 | | Total | 2022 | 1,435,834 | 603,512 | 294,930 | 65,872 | 603,512 | 1,796,636 | 2,400,148 | | 2021 | 1,349,430 | 553,362 | 2,493,899 | 61,939 | 553,362 | 3,905,268 | 4,458,630 |
*Relates to health insurance, life assurance and income protection insurance i) The value of share-based payment awards to Directors is defined as the fairintrinsic value of the shares on the date of grant. For equity awards that vest based on a service condition, the share-based compensation expense is recognized on a straight-line basis over the requisite service period. This was a weighted average value of $18.43 per share in the year (2020: $10.75), meaningshares. The table reflects the total fair value of the options issuedshare-based expense recognised in 2021 was $2 million (2020: 1On May 14, 2021, Florian Brand resigned from the position of Director.
2On February 1, 2021, Jason Camm permanently waived any and all compensation which he was entitled to receive. Shares issued in 2020 were subsequently cancelled in 2021.
3Wayne Riley was appointed as Director, effective from March 31, 2021.2022.
$6 million). Note: the vesting of certain options accelerated upon completion of the IPO in accordance with the option grant terms which resulted in the recognition of a higher share-based compensation expense in 2020.
ii) No Director is currently in receipt of a pension contribution. Each Director is either not entitled to a pension payment or has opted out of receiving it. There are no payments made in lieu of pension entitlement. Illustrations of Base Case, Expected, and Maximum remuneration for the Executive Directors Scenarios (unaudited) The charts set out for illustrative purposes only, what annual remuneration the Company expects the Executive Directors to obtain as a base case, expected and maximum achievement of performance targets with respect to the year ending 31 December 2022.2023. The assumptions used in the calculations are set out below: | | 2022 | Chief Executive Officer | Chief Innovation Officer | | | 2023 | | 2023 | Chief Executive Officer | Chairman | Chief Innovation Officer | | | US $ | US $ | | US $ | US $ | | Base salary | Base salary | 585,108 | 413,017 | Base salary | 594,500 | 96,824 | 370,352 | | Benefits | Benefits | 37,304 | 24,635 | Benefits | — | 40,070 | 25,802 | | FV of RSU's (granted on February 1, 2022) | 456,750 | 204,750 | | | Fair value of restricted share units (granted on 2 February 2023) | | Fair value of restricted share units (granted on 2 February 2023) | 273,420 | — | 126,945 | | Base case | Base case | 1,079,162 | 642,402 | Base case | 867,920 | 136,894 | 523,099 | | Expected bonus (assumed at 100% of target) | Expected bonus (assumed at 100% of target) | 351,065 | 185,858 | Expected bonus (assumed at 100% of target) | 356,700 | — | 166,658 | | Expected case | Expected case | 1,430,227 | 828,260 | Expected case | 1,224,620 | 136,894 | 689,757 | | Maximum bonus (paid at 125% of target) | Maximum bonus (paid at 125% of target) | 438,831 | 232,322 | Maximum bonus (paid at 125% of target) | 445,875 | — | 208,323 | | Maximum bonus case | Maximum bonus case | 1,517,993 | 874,724 | Maximum bonus case | 1,313,795 | 136,894 | 731,422 | | Effect of 50% share price appreciation on share options (granted on February 1, 2022) | 1,362,375 | 590,625 | | | 50% share price appreciation case | 2,880,368 | 1,465,349 | |
i)Base case: this illustration assumes fixed base case, as set out above. This illustration assumes no annual bonus; ii)Expected case: this illustration assumes the base case remuneration set out above, plus an annual bonus. We make the assumption that each Executive Director will receive the target annual bonus of 60% (2021: 55%) in the case of the Chief Executive Officer (2021: 60%) and 45% (2021: 45%) in the case of the Chief Innovation Officer of base salary, being $1,430,227$356,700 and $828,260$166,658 respectively; and
iii)Maximum bonus case: this illustration assumes the base case remuneration set out above, plus the maximum annual bonus of 125% x the target bonus percentage of base salary, being $1,517,993
$445,875 for the year in respect of the Chief Executive Officer and $874,724$208,323 for the year in respect of the Chief Innovation Officer. iv)50% share price appreciation case: this illustration assumes the base case remuneration set out above, plus the change in value of share options granted on 1 February 2022, if the share price appreciated by 50%, being $2,880,368 for the year in respect of the Chief Executive Officer and $1,465,349 for the year in respect of the Chief Innovation Officer.
The Group has used the exchange rate $0.7409:$0.8262:£1.00, the rate at 31 December 2021. 
Annual performance bonus
In 20212022 the CEO, Executive Chairman (who served as CEO until 1 August 2022) and CIO’s annual bonus outcome of 100% of target for each, resulted in a total bonus pay out for the financial year ended 31 December 20212022 of 55%60% of the CEO’s base salary, 60% of the Executive Chair’s base salary and 45% of the
CIO’s base salary in each case for the period. The CIO was also awarded an additional bonus to increase the effective bonus percentage to 125% of the target. During a series of meetings in January and February 2022,2023, the Compensation and Leadership Development Committee evaluated achievement of the 20212022 corporate objectives and each Executive Director’s individual performance. The Compensation and Leadership Development Committee reviewed the following corporate goals and based on the results approved an overall average 100% achievement level of the 20212022 corporate objectives as the Company achieved its target goals. The goals were as follows: Corporate Goals and Achievements
•COMP360 for TRD: PrepareLaunched a phase III programme in TRD and phase II programmes in PTSD and anorexia nervosa; •Established a robust pipeline of new drug and technology assets to increase the value of COMPASS while demonstrating commitment to transforming mental health; •Prepared for a successful End of Phase IIb meeting and a promptscalable commercial launch of Phase III •Build out a portfolio of new indications for COMP360 new compounds, and technologies that have the potential to improve the safety, efficacy and accessibility of our therapies
•Position COMPASS as a leading mental health care company and fund future plans
•COMP360 for TRD: Prepare for a successful commercial launchtherapy that will ensure access for as many patients as possiblepossible; and
•DevelopDeveloped a talentedhigh-performing team and ana mission-driven organisation that makes rapid growth sustainable for employeescommitted to the highest standards of quality and compliance. Long term incentive awards during the year ended 31 December 2021.2022. During the 20212022 performance year, the Executive DirectorsMr Goldsmith and Ms Malievskaia were not awarded any furtheroptions and restricted share options or RSUs above whatunits ("RSUs") grants on 1 February 2022. Mr Nath was awarded in 2020.options and RSUs upon his hire date 1 August 2022. Payments to past Directors (audited) There were no payments to past Directors made during the financial year ending 31 December 2021 (2020:2022 (2021: nil). Payments for Loss of Office (audited)
There were no payments made to Directors for Loss of Office during the financial year ending 31 December 2021 (2020:2022 (2021: nil) and no such payments have been made in the period between 31 December 20212022 and the date of this report.
Statement of Directors’ Shareholding and Share Interests (audited) The Company does not have a formal policy on Executive or Non-Executive Director shareholdings. The table below details the total number of shares owned (including their beneficial interests), the total number of share options held, the number of share options vested but not yet exercised and the total number of restricted share units ("RSUs") held as at 31 December 20202021 and 31 December 2021,2022, respectively: | | | | | | | | | | | | | | | | | | | | | | | | | Shares | Share options | RSUs | | 2021 | Beneficially owned shares at 31 December 2021 | Total share options at 31 December 2021 | Unvested without performance conditions | Vested but unexercised | Total RSUs at 31 December 2021 | Unvested without performance conditions | Vested but unexercised | | Executive Directors | | George Goldsmith | 4,318,572 | 113,600 | 78,100 | 35,500 | 44,710 | 30,739 | — | | Ekaterina Malievskaia | 4,308,510 | 85,200 | 58,575 | 26,625 | 44,710 | 30,739 | — | | Non-Executive Directors | | David Norton | 127,984 | 147,404 | 26,839 | 120,565 | 23,740 | 16,321 | — | | Florian Brand | — | 5,396 | — | 5,396 | — | — | — | | Jason Camm | — | — | — | — | — | — | — | | Annalisa Jenkins | 113,054 | 132,474 | 26,839 | 105,635 | 23,740 | 16,321 | — | | Thomas Lonngren | 123,919 | 72,095 | 37,225 | 34,870 | — | — | — | | Robert McQuade | 1,600,523* | 33,584 | 27,738 | 5,846 | — | — | — | | Linda McGoldrick | 6,745 | 33,584 | 26,839 | 6,745 | — | — | — | | Wayne Riley | — | 24,000 | 24,000 | — | — | — | — |
*
| | | | | | | | | | | | | | | | | | | | | | | | | Shares | Share options | RSUs | | 2020 | Beneficially owned shares at 31 December 2020 | Total share options at 31 December 2020 | Unvested without performance conditions | Vested but unexercised | Total RSUs at 31 December 2020 | Unvested without performance conditions | Vested but unexercised | | Executive Directors | | George Goldsmith | 4,521,571 | 113,600 | 113,600 | | 44,710 | 44,710 | — | | Ekaterina Malievskaia | 4,521,571 | 85,200 | 85,200 | | 44,710 | 44,710 | — | | Non-Executive Directors | | David York Norton | 113,820 | 135,404 | 21,584 | 113,820 | 23,740 | 23,740 | — | | Florian Brand | — | 21,584 | 21,584 | — | — | — | — | | Jason Camm | 1,300 | 21,584 | 21,584 | — | — | — | — | | Annalisa Jenkins | 113,820 | 135,404 | 21,584 | 113,820 | 23,740 | 23,740 | — | | Thomas Lönngren | 122,227 | 60,095 | 37,906 | 22,189 | — | — | — | | Robert McQuade | — | 21,584 | 21,584 | — | — | — | — | | Linda McGoldrick | — | 21,584 | 21,584 | — | — | — | — |
| | | | | | | | | | | | | | | | | | | | | | | | | Shares | Share options | RSUs | | 2021 | Beneficially owned shares at 31 December 2021 | Total share options at 31 December 2021 | Unvested without performance conditions | Vested but unexercised | Total RSUs at 31 December 2021 | Unvested without performance conditions | Vested but unexercised | | Executive Directors | | George Goldsmith | 4,318,572 | 113,600 | 78,100 | 35,500 | 44,710 | 30,739 | — | | Ekaterina Malievskaia | 4,308,510 | 85,200 | 58,575 | 26,625 | 44,710 | 30,739 | — | | Non-Executive Directors | | David York Norton | 127,984 | 147,404 | 26,839 | 120,565 | 23,740 | 16,321 | — | | Florian Brand | — | 5,396 | — | 5,396 | — | — | — | | Jason Camm | — | — | — | — | — | — | — | | Annalisa Jenkins | 113,054 | 132,474 | 26,839 | 105,635 | 23,740 | 16,321 | — | | Thomas Lönngren | 123,919 | 72,095 | 37,225 | 34,870 | — | — | — | | Robert McQuade | 5,846 | 33,584 | 27,738 | 5,846 | — | — | — | | Linda McGoldrick | 6,745 | 33,584 | 26,839 | 6,745 | — | — | — | | Wayne Riley | — | 24,000 | 24,000 | — | — | — | — |
Includes 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Shares | Share options | RSUs | | | 2022 | Beneficially owned shares at 31 December 2022 | Total share options at 31 December 2022 | Unvested without performance conditions | Vested but unexercised | Total RSUs at 31 December 2022 | Unvested without performance conditions | Vested but unexercised | | | Executive Directors | | | Kabir Nath | — | 600,000 | 600,000 | — | 50,000 | 50,000 | — | | | George Goldsmith | 4,397,499 | 286,600 | 186,658 | 99,942 | 73,710 | 48,561 | — | | | Ekaterina Malievskaia | 4,349,794 | 160,200 | 96,650 | 63,550 | 57,710 | 32,561 | — | | | Non-Executive Directors | | | David Norton | 150,314 | 164,404 | 26,443 | 137,961 | 23,740 | 10,386 | — | | | Annalisa Jenkins | 135,384 | 149,474 | 26,443 | 123,031 | 23,740 | 10,386 | — | | | Thomas Lonngren | 149,137 | 89,095 | 30,894 | 58,201 | — | — | — | | | Robert McQuade | 1,618,818* | 50,584 | 27,342 | 23,242 | — | — | — | | | Linda McGoldrick | 25,040 | 50,584 | 26,443 | 24,141 | — | — | — | | | Wayne Riley | 11,500 | 45,250 | 34,750 | 10,500 | — | — | — | |
*Includes 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares.
The interests of the Directors in the Company’s share options and RSUs as at 31 December 20212022 is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Director | Date of grant | Price per Share ($) | Type | 01/01/2022 | Granted during the year | Exercised during the year | Vested in year | Cancelled during the period | 31/12/2022 | Date from which exercisable | Expiry date | | | Kabir Nath | 01/08/2022 | 14.94 | Option | — | 600,000 | — | — | — | 600,000 | 01/08/2022 | 31/07/2032 | | | 01/08/2022 | 0.01 | RSU | — | 50,000 | — | — | — | 50,000 | 01/08/2022 | 01/08/2026 | | | George Goldsmith | 18/09/2020 | 16.85 | Option | 113,600 | — | — | 28,400 | — | 113,600 | 18/09/2020 | 18/09/2030 | | | 01/02/2022 | 15.75 | Option | — | 173,000 | — | 36,042 | — | 173,000 | 01/02/2022 | 31/01/2032 | | | 30/06/2020 | 0.01 | RSU | 30,739 | — | — | 11,178 | — | 19,561 | 12/08/2020 | 01/08/2024 | | | 01/02/2022 | 0.01 | RSU | — | 29,000 | — | — | — | 29,000 | 01/02/2022 | 01/02/2026 | | | Ekaterina Malievskaia | 18/09/2020 | 16.85 | Option | 85,200 | — | — | 21,300 | — | 85,200 | 18/09/2020 | 18/09/2030 | | | 01/02/2022 | 15.75 | Option | — | 75,000 | — | 15,625 | — | 75,000 | 01/02/2022 | 31/01/2032 | | | 30/06/2020 | 0.01 | RSU | 30,739 | — | — | 11,178 | — | 19,561 | 12/08/2020 | 01/08/2024 | | | 01/02/2022 | 0.01 | RSU | — | 13,000 | — | — | — | 13,000 | 01/02/2022 | 01/02/2026 | | | David Norton | 20/07/2019 | 1.40 | Option | 99,049 | — | — | — | — | 99,049 | 05/05/2018 | 20/07/2029 | | | 30/03/2020 | 2.40 | Option | 14,771 | — | — | — | — | 14,771 | 05/05/2018 | 30/03/2030 | | | 18/09/2020 | 16.85 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 18/09/2020 | 18/09/2030 | | | 01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | | | 16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | | | 30/06/2020 | 0.01 | RSU | 16,321 | — | — | 5,935 | — | 10,386 | 12/08/2020 | 01/08/2024 | | | Annalisa Jenkins | 20/07/2019 | 1.40 | Option | 84,119 | — | — | — | — | 84,119 | 01/06/2018 | 20/07/2029 | | | 30/03/2020 | 2.40 | Option | 14,771 | — | — | — | — | 14,771 | 01/06/2018 | 30/03/2030 | | | 18/09/2020 | 16.85 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 18/09/2020 | 18/09/2030 | | | 01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | | | 16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | | | 30/06/2020 | 0.01 | RSU | 16,321 | — | — | 5,935 | — | 10,386 | 12/08/2020 | 01/08/2024 | | | Thomas Lonngren | 30/03/2020 | 0.01 | Option | 14,771 | — | — | — | — | 14,771 | 18/05/2018 | 30/03/2030 | | | 30/06/2020 | 0.01 | Option | 23,740 | — | — | 5,935 | — | 23,740 | 30/06/2020 | 30/06/2030 | | | 18/09/2020 | 16.85 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 18/09/2020 | 18/09/2030 | | | 01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | | | 16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | | | Robert McQuade | 23/11/2020 | 32.66 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 23/11/2020 | 22/11/2030 | | | 01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | | | 16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | | | Linda McGoldrick | 18/09/2020 | 17.05 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 18/09/2020 | 18/09/2030 | | | 01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | | | 16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | | | Wayne Riley | 31/03/2021 | 35.25 | Option | 24,000 | — | — | 10,500 | — | 24,000 | 31/03/2021 | 30/03/2031 | | | 16/06/2022 | 9.44 | Option | — | 21,250 | — | — | — | 21,250 | 16/06/2022 | 15/06/2032 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Director | Date of grant | Price Per Share ($) | Type | 01/01/2021 | Granted during the year | Exercised during the year | Vested in year | Cancelled during the period | 31/12/2021 | Date from which exercisable | Expiry date | | George Goldsmith | 18/09/2020 | 10.03 | Option | 113,600 | — | — | 35,500 | — | 113,600 | 18/09/2020 | 18/09/2030 | | 30/06/2020 | 10.15 | RSU | 44,710 | — | — | 13,971 | — | 30,739 | 12/08/2020 | 01/08/2024 | | Ekaterina Malievskaia | 18/09/2020 | 10.03 | Option | 85,200 | — | — | 26,625 | — | 85,200 | 18/09/2020 | 18/09/2030 | | 30/06/2020 | 10.15 | RSU | 44,710 | — | — | 13,971 | — | 30,739 | 12/08/2020 | 01/08/2024 | | David York Norton | 20/07/2019 | 1.50 | Option | 99,049 | — | — | — | — | 99,049 | 05/05/2018 | 20/07/2029 | | 30/03/2020 | 4.11 | Option | 14,771 | — | — | — | — | 14,771 | 05/05/2018 | 30/03/2030 | | 18/09/2020 | 10.03 | Option | 21,584 | — | — | 6,745 | — | 21,584 | 18/09/2020 | 18/09/2030 | | 01/10/2021 | 17.43 | Option | — | 12,000 | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | | 30/06/2020 | 10.15 | RSU | 23,740 | — | — | 7,419 | — | 16,321 | 12/08/2020 | 01/08/2024 | | Florian Brand | 23/11/2020 | 19.56 | Option | 21,584 | — | — | — | 21,584 | — | 23/11/2020 | 22/11/2030 | | 14/05/2021 | 18.83 | Option | — | 5,396 | — | 5,396 | — | 5,396 | 14/05/2021 | 22/11/2030 | | Jason Camm | 23/11/2020 | 19.56 | Option | 21,584 | — | — | — | 21,584 | — | 23/11/2020 | 22/11/2030 | | Annalisa Jenkins | 20/07/2019 | 1.50 | Option | 99,049 | — | 14,930 | — | — | 84,119 | 01/06/2018 | 20/07/2029 | | 30/03/2020 | 4.11 | Option | 14,771 | — | — | — | — | 14,771 | 01/06/2018 | 30/03/2030 | | 18/09/2020 | 10.03 | Option | 21,584 | — | — | 6,745 | — | 21,584 | 18/09/2020 | 18/09/2030 | | 01/10/2021 | 17.43 | Option | — | 12,000 | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | | 30/06/2020 | 10.15 | RSU | 23,740 | — | — | 7,419 | — | 16,321 | 12/08/2020 | 01/08/2024 | | Thomas Lönngren | 30/03/2020 | 5.56 | Option | 14,771 | — | — | — | — | 14,771 | 18/05/2018 | 30/03/2030 | | 30/06/2020 | 10.15 | Option | 23,740 | — | — | 5,935 | — | 23,740 | 30/06/2020 | 30/06/2030 | | 18/09/2020 | 10.03 | Option | 21,584 | — | — | 6,745 | — | 21,584 | 18/09/2020 | 18/09/2030 | | 01/10/2021 | 17.43 | Option | — | 12,000 | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | | Robert McQuade | 23/11/2020 | 19.56 | Option | 21,584 | — | — | 5,846 | — | 21,584 | 23/11/2020 | 22/11/2030 | | 01/10/2021 | 17.43 | Option | — | 12,000 | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | | Linda McGoldrick | 18/09/2020 | 10.15 | Option | 21,584 | — | — | 6,745 | — | 21,584 | 18/09/2020 | 18/09/2030 | | 01/10/2021 | 17.43 | Option | — | 12,000 | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | | Wayne Riley | 31/03/2021 | 21.45 | Option | — | 24,000 | — | — | — | 24,000 | 31/03/2021 | 30/03/2031 |
All options are subject to service rather than performance conditions. The options vestedvest monthly over 4 years with a 1 year 25% cliff for those granted after September 2020 and with a 25% cliff on the earlier of 1 year and IPO for the June 2020 grants. Awards granted in March 2020 vested fully upon IPO.
Awards granted prior to March 2020 had fully vested prior to IPO. RSU awards granted in February 2022 vest 25% per year for 4 years, and the options granted at that time vest monthly over 4 years. Mr Nath’s option grant awards vest over 4 years with a 1 year 25% cliff and his RSU awards vest 25% per year for 4 years. For the Non-Executive Officers, the options awarded on 1 October 2021 vested 100% after one year and the options awarded on 16 June 2022 vest upon the earlier of the one-year anniversary of the date of grant or the date of the 2023 annual general meeting of shareholders.
The beneficial and non-beneficial interests in the Company’s shares of the Directors and their families were as follows: | | NAME OF BENEFICIAL OWNER | NAME OF BENEFICIAL OWNER | ORDINARY SHARES BENEFICIALLY OWNED AT 31 December 2021 | NAME OF BENEFICIAL OWNER | ORDINARY SHARES BENEFICIALLY OWNED AT 31 DECEMBER 2022 | | NUMBER | PERCENT | NUMBER | PERCENT | Directors | | George Goldsmith | George Goldsmith | 4,318,572 | 10.3% | George Goldsmith | 4,397,499 | 10.3% | | Ekaterina Malievskaia | Ekaterina Malievskaia | 4,308,510 | 10.3% | Ekaterina Malievskaia | 4,349,794 | 10.2% | Non-Executive Directors | | David York Norton | 127,984 | * | | | | Jason Camm | — | — | | | David Norton | | David Norton | 150,314 | * | | Annalisa Jenkins | Annalisa Jenkins | 113,054 | * | Annalisa Jenkins | 135,384 | * | | Thomas Lönngren | 123,919 | * | | | Thomas Lonngren | | Thomas Lonngren | 149,137 | * | | Robert McQuade | Robert McQuade | 5,846 | * | Robert McQuade | 1,618,818** | 3.8% | | Linda McGoldrick | Linda McGoldrick | 6,745 | * | Linda McGoldrick | 25,040 | * | | Wayne Riley | Wayne Riley | — | — | Wayne Riley | 11,500 | * |
*Represents beneficial ownership of less than one percent.
**Includes 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission, or SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities and include ordinary shares that can be acquired within 60 days of 31 December 2021.2022. *Represents beneficial ownership of less than one percent.
Total Shareholder Return
The graph below shows the Company’s performance, measured by total shareholder return, for the Company’s American Depositary Shares (“ADSs”ADSs”), which are listed on Nasdaq and each representing one of the Company’s ordinary shares against the Nasdaq Composite Index (Nasdaq: CMPS vs NBI). TheNCI) and the Nasdaq Biotech Index has been(Nasdaq: CMPS vs NBI). We have selected these indices for this comparison because the Company has been admitted to trading on the Nasdaq exchange and it is consideredoperates as a Biotech and we consider them to be the most suitable comparator index.
indices.
Chief Executive Officer total remuneration history
2020 was the first year that the Company prepared a Remuneration Report. We have taken the exemption not to disclose 5 years of history of remuneration and have chosen to disclose remuneration history for 2020 onwards. Percentage change in remuneration of the Executive and Non-Executive Directors
The year on year movement to 31 December 2021 of CEO, CIO and Non-Executive Directors pay versus that of employees is disclosed in the table below. | | | | | | | | | | | | | Change in pay between 31 December 2021 and 31 December 2020 | | Salary | Annual Bonus | Benefits | | CEO % change | 29 | % | 37 | % | 9 | % | | CIO % change | 14 | % | 54 | % | 4 | % | | David Norton | 288 | % | n/a | n/a | | Jason Camm | n/a | n/a | n/a | | Annalisa Jenkins | 277 | % | n/a | n/a | | Thomas Lonngren | 277 | % | n/a | n/a | | Robert McQuade | 277 | % | n/a | n/a | | Linda McGoldrick | 278 | % | n/a | n/a | | Wayne Riley | n/a | n/a | n/a | | Employees % change | 17 | % | 29 | % | 36 | % | | | | |
| | | | | | | | | | | | | Salary | Annual Bonus (1) | Benefits (1) | | CEO % change | 29 | % | 37 | % | 9 | % | | CIO % change | 14 | % | 54 | % | 4 | % | | David Norton (2) | 288 | % | n/a | n/a | | Jason Camm (3) | n/a | n/a | n/a | | Annalisa Jenkins (2) | 277 | % | n/a | n/a | | Thomas Lonngren (2) | 277 | % | n/a | n/a | | Robert McQuade (2) | 277 | % | n/a | n/a | | Linda McGoldrick (2) | 278 | % | n/a | n/a | | Wayne Riley (4) | n/a | n/a | n/a | | Employees % change | 17 | % | 29 | % | 36 | % |
(1)
The year on year movement to 31 December 2022 of CEO, Executive Chairman, CIO and Non-Executive Directors pay versus that of employees is disclosed in the table below. | | | | | | | | | | | | | | | | | | | | | | Change in pay between 31 December 2022 and 31 December 2021 | | | | | Salary | Annual Bonus (1) | Benefits (1) | | | | | CEO % change (2)* | (1) | % | 6 | % | (100) | % | | | | | CEO % change (2)** | (8) | % | (2) | % | 7 | % | | | | | Executive Chairman % change (2) | 100 | % | 100 | % | 100 | % | | | | | CIO % change | (8) | % | (29) | % | 5 | % | | | | | David Norton | (3) | % | n/a | n/a | | | | | Annalisa Jenkins | (10) | % | n/a | n/a | | | | | Thomas Lonngren | (8) | % | n/a | n/a | | | | | Robert McQuade | (10) | % | n/a | n/a | | | | | Linda McGoldrick | (9) | % | n/a | n/a | | | | | Wayne Riley (3) | 20 | % | n/a | n/a | | | | | Employees % change | (37) | % | (27) | % | (19) | % | | | |
*Represents Kabir Nath *Represents George Goldsmith
1.None of the Non-Executive Directors are eligible for an annual bonus and none claimed any benefits during the year. (2)David Norton, Annalisa Jenkins, Thomas Lonngren, Robert McQuade2.During 2022, Kabir Nath joined as our Chief Executive Officer, effective 1 August 2022 and Linda McGoldrick joined the BoardGeorge Goldsmith transitioned to Executive Chair. The remuneration received by Mr. Nath and Mr Goldsmith in 2020 and2022 in respect of their roles as CEO were full annual amounts, therefore for comparison purposes, the remuneration received in 20202022 as CEO was notpro-rated as a full annual amount.result and was compared to Mr. Goldsmith's remuneration for the year ended 31 December 2021.
(3) On 1 February 2021, Jason Camm permanently waived any and all compensation which he was entitled to receive.
(4) 3.Wayne Riley joined the Board in 2021 and the remuneration received in 2021 was not a full annual amount.
4.Year over year decreases in average salary are the result of fluctuations in foreign currency exchange rates and as a result of the hire of additional employees at lower pay bands.
Relative importance of spend on pay
The Committee considers the Company’s research and development expenditure relative to remuneration expenditure for all employees, to be the most appropriate metric for assessing overall spend on pay due to the nature and stage of the Company’s business. Dividend distribution comparators have not been included as the Company has no history of such transactions. The graph below illustrates the gross remuneration to all employees compared to research and development expenditure in 20212022 and in 2020 post IPO (18 September 2020 to 31 December 2021).2021. The Committee notes that research and development expenditure may increase in future years as the Company continues to progress its COMP360 psilocybin therapy into later stage clinical trials for the treatment of TRD and into trials for other indications, as well as developing other neuropsychiatric therapies.
Structure and Role of Committee and Approach to Remuneration Matters The Committee is comprised of Annalisa Jenkins, who chairs the Committee, David York Norton and Wayne Riley. The constitution of the Committee is in compliance with Nasdaq requirements. The members of the Committee are Independent Directors as defined in Rule 10A-310C-1 under the US Securities Exchange Act of 1934.1934 and under applicable NASDAQ listing rules.
It is the Board's belief that good corporate governance is integral to a successful business and the Company finds instructive the standards of corporate governance prescribed by the Corporate Governance Code for Small and Mid-Size Quoted Companies from The Quoted Companies Alliance (the “QCA Code”“QCA Code”). The Board believes that this corporate governance framework is an appropriate guide for the Company, having regard to its size and nature.
The Committee’s approach to remuneration matters is to enable the Company to attract and retain talent, incentivizeincentivise long-term value generation and effectively manage the Company’s cash resources. It is the belief of the Committee that this is best achieved through a greater emphasis on variable rather than fixed remuneration, comprised of a mix of base salary and benefits, along with the flexibility to appropriately reward and incentivizeincentivise with variable pay and longer term incentives, as described within the Policy. When applying the Policy to Executive Directors, the Committee seeks to comply with the QCA Code so far as it is practical to do so, having regard to the size, nature and business requirements of the Company. Operation of the Policy will largely be compliant with the remuneration elements of the QCA Code, but we are aware that in certain instances we will differ from the QCA Code. These instances reflect differences in US market practice when compared to the UK, and the need to balance our governance obligations against the importance of offering competitive remuneration packages in the markets in which we compete and operate. The terms of reference of the Committee can be found on our website at www.compasspathways.com. External advice During the year, the Company engaged Aon Solutions UK Limited (Aon) to support management and the Committee with advice on remuneration matters, in particular peer-group benchmarking of Director and Senior Management remuneration and the grant of long term equity incentives under the 2020 Plan that became effective on the day prior to the listing of our ADSs on Nasdaq. The consultants were appointed by the Committee. The Company also engaged Aon to support management in the valuation of option awards granted under the 2020 Plan. The Committee is satisfied that Aon provides independent and objective advice, as Aon is a leading global professional services firm and the boardBoard confirm no conflicts of interest before each meeting. During 20212022 fees of $76,957 (2020: $82,500)$213,826 (2021: $76,957) were paid to Aon Consulting Inc.Solutions UK Limited (Aon).
Proposed Application of the Policy for the Year Ending 31 December 20222023 CEO remuneration i)Fixed elements of remuneration With effect from 1 January 2022,2023, the base salary of George GoldsmithKabir Nath in his role as Chairman and Chief Executive Officer (CEO) and Executive Director of the Company is £433,500 ($585,108)$594,500 (£491,201) per annum. ii)Variable elements of remuneration - Short-term incentives The target bonus for Mr. GoldsmithNath for the 20222023 performance year will be 60% of base salary. Benchmarking the CEO bonus against peers identified it would be appropriate to increase the target bonus to 60% (2021: 55%). The performance objectives for Mr. GoldsmithNath against which the Committee will determine the annual bonus were approved by the Board in February 2021.2023. The detail behind the performance objectives is currently considered to be commercially sensitive as they relate to the strategy that the Company intends to take with respect to the advancement of the COMP360 clinical development program and the Company’s financial and commercial goals. To the extent that the objectives do not comprise commercially sensitive information, the Company expects to disclose both the objectives and performance against those objectives in next year’s Remuneration Report. iii)Long-term incentive awards Long term incentives for 20222023 were awarded on 12 February 2022.2023. The Company awards share options to all employees in order to align long-term employee interests with those of shareholders. On 2 February 2023, the Company awarded Mr. Nath 153,900 share options and 25,200 restricted share units. Chairman remuneration i)Fixed elements of remuneration
With effect from 1 January 2023, the base salary of George Goldsmith in his role as non- Executive Chairman of the Company is £80,000 ($96,824) per annum. ii)Long-term incentive awards Mr Goldsmith will be awarded 25,500 options at the 2023 AGM for his role as Chairman.
CIO remuneration
i) Fixed elements of remuneration With effect from 1 January 2022,2023, the base salary of Ekaterina Malievskaia in her role as Chief Innovation Officer (CIO) and Executive Director of the Company is £306,000 ($413,017)370,352) per annum. ii) Variable elements of remuneration - Short-term incentives The target bonus for Dr Malievskaia for the 20212023 performance year will be 45% of base salary. The performance objectives for Dr Malievskaia against which the Committee will
determine the annual bonus were approved by the Board in February 2021.2023. The detail behind the performance objectives is currently considered to be commercially sensitive as they relate to the strategy that the Company intends to take with respect to the advancement of the COMP360 clinical development program and the Company’s financial and commercial goals. To the extent that the objectives do not comprise commercially sensitive information, the Company expects to disclose both the objectives and performance against those objectives in next year’s Remuneration Report. iii) Long-term incentive awards Long term incentives for 20222023 were awarded on 12 February 2022.2023. The Company awards share options to all employees in order to align long-term employee interests with those of shareholders.
On 2 February 2023, the Company awarded Dr. Malievskaia 67,500 share options and 11,700 restricted share units.
Chairman and Non-Executive Director fees (audited) Chairman fees GeorgeMr Goldsmith serves as both Chairman and CEO and does not receive any additional remuneration in respect of his role as Chair.chair other than the total amounts disclosed above.
Non-Executive Director cash fees Non-Executive Directors are paid a basic fee. In addition to the basic fee, committee fees may be paid for chairing or membership of a Board committee. Non-Executive Director fees were reviewed in 2021.2022. Non-Executive Directors are eligible to receive the following annual fees:
| | | | 2021
($) | 2020
($) | | | 2022
($) | 2021
($) | | Annual Retainer for Board Membership*: | Annual Retainer for Board Membership*: | | 41,270 | 38,524 | Annual Retainer for Board Membership*: | | 37,114 | 41,270 | | Additional Annual Retainer for Lead Independent Director: | Additional Annual Retainer for Lead Independent Director: | | 20,635 | 12,841 | Additional Annual Retainer for Lead Independent Director: | | 18,557 | 20,635 | | Additional Retainers for Committee Membership: | Additional Retainers for Committee Membership: | | | Additional Retainers for Committee Membership: | | | | Audit and Risk Committee Chair: | Audit and Risk Committee Chair: | | 16,508 | 15,410 | Audit and Risk Committee Chair: | | 14,846 | 16,508 | | Audit and Risk Committee member: | Audit and Risk Committee member: | | 8,254 | 7,705 | Audit and Risk Committee member: | | 7,423 | 8,254 | | Compensation and Leadership Development Committee Chair: | Compensation and Leadership Development Committee Chair: | | 11,005 | 10,273 | Compensation and Leadership Development Committee Chair: | | 9,897 | 11,005 | | Compensation and Leadership Development Committee member: | Compensation and Leadership Development Committee member: | | 5,503 | 5,137 | Compensation and Leadership Development Committee member: | | 4,949 | 5,503 | | Nominating and Corporate Governance Committee Chair: | Nominating and Corporate Governance Committee Chair: | | 9,630 | 7,705 | Nominating and Corporate Governance Committee Chair: | | 8,660 | 9,630 | | Nominating and Corporate Governance Committee member: | Nominating and Corporate Governance Committee member: | | 4,815 | 3,852 | Nominating and Corporate Governance Committee member: | | 4,330 | 4,815 | | Innovation and Research Committee Chair: | Innovation and Research Committee Chair: | | 11,005 | 10,273 | Innovation and Research Committee Chair: | | 9,897 | 11,005 | | Innovation and Research Committee member: | Innovation and Research Committee member: | | 5,503 | 5,137 | Innovation and Research Committee member: | | 4,949 | 5,503 |
* for general availability and participation in meetings and conference calls of our Board of Directors, to be paid monthly, pro-rated based on the number of actual days served by the directorDirector during such calendar month. **Year over year decreases in salary are the result of fluctuations in foreign currency exchange rates rather than actual decreases in compensation paid in GBP. Note: Chair and committee member retainers are in addition to retainers for members of the Board of Directors. In accordance with the Company's Articles of Association, Directors are allocated into one of three classes. Each class of directorsDirectors serves a staggered three-year term. At each annual general meeting, the successors of directorsDirectors whose terms then expire will be elected to serve from the time of election and
qualification until the third annual meeting following election. Directors of the class retiring at the annual general meeting shall be eligible for re-appointment by ordinary resolution at such annual general meeting. The Company’s Class I directorsDirectors are David York Norton, Ekaterina Malievskaia and Wayne
Riley, allwhom were re-elected at the 2021 annual general meeting. The Company’s Class II Directors are Kabir Nath (who was appointed in August 2022 and therefore will stand for re-election at the 2023 annual general meeting), Robert McQuade and Thomas Lönngren, each of whom were re-elected at last year's annual general meeting. The Company’s Class II directors are Jason Camm, Robert McQuade and Thomas Lönngren, each of whom shall be eligible for re-appointment at this year's annual general meeting. The Company’s Class III directorsDirectors are Annalisa Jenkins, George Goldsmith and Linda McGoldrick, each of whom shall be eligible for re-electionre- election at the 2023 annual general meeting. Pursuant to our Articles of Association, if the directorDirector eligible for re-election does not seek re-election and no other directorDirector is elected to fill their respective position(s), they shall be re-elected by default if the relevant directorDirector is willing to do so.
Details of Directors’ service contracts or letters of appointment for the year ended 31 December 20212022 are as follows: | | | | | | | | | | Director | Executive/NED | Date of contract | | Kabir Nath | Executive | 01 August 2022 | | George Goldsmith | Executive | 15 September 202001 August 2022 | | Ekaterina Malievskaia | Executive | 17 September 2020 | | David York Norton | NED | 14 September 2020 | | | | Jason Camm | NED | 2 March 2020 | | Annalisa Jenkins | NED | 14 September 2020 | | Thomas Lönngren | NED | 15 September 2020 | | Robert McQuade | NED | 25 March 2021 | | Linda McGoldrick | NED | 14 September 2020 | | Wayne Riley | NED | 31 March 2021 |
The information in this part of the Remuneration Report is not subject to audit. Directors’ Remuneration Policy This remuneration policy was approved by shareholders in a binding vote at the AGM held on 22 June 2021.
Statement of consideration of shareholder views The Compensation and Leadership Development Committee will consider any shareholder feedback received and ongoing shareholder feedback throughout the year, when reviewing and applying the Policy each year.
The broad topics discussed with shareholders in 20212022 include peer groups and appropriate jurisdiction for benchmarking directorsDirectors remuneration.
The guidance from shareholder representative bodies is also considered on an ongoing basis. More specifically,The Committee submits a its U.K. Statutory Directors’ annual report on remuneration for a non-binding, advisory vote of shareholders at its annual general meeting of shareholders. At the 2022 annual general meeting of shareholders, 88.1% of shareholders voted in favor of the proposal to receive and approve, as a non-binding advisory resolution, the U.K. Statutory Directors’ Remuneration Report for the year ended 31 December 2021, with 0.1% voted against and 11.8% withheld from such proposal. Although non-binding, the Compensation and Leadership Development Committee will consult with major shareholdersreview and consider the voting results when proposing any significant changes to the Policy in the future.making future decisions regarding our Director remuneration program. The attendees of the Compensation and Leadership Development Committee meetings in 20212022 were as follows: | | | | | | | Director | Attendance | George Goldsmith | 5 of 5 | | Jason Camm* | 23 of 53 | David York NortonNorton** | 5 of 56 | | Annalisa Jenkins | 56 of 56 | Wayne Riley**Riley | 26 of 26 |
*Jason Camm attended 23 of 3 meetings prior to stepping down from the Board effective 16 June 2022. **David York Norton attended 5 of 6 meetings due to scheduling conflicts. **Wayne Riley attended every meeting after joining the Compensation and Leadership Development Committee.
FORM OF PROXY FOR ORDINARY SHAREHOLDERS
000) | December 31,
2020
(
(1) “Audit Fees” consist of fees billed for the audit of our annual consolidated financial statements and statutory accounts. (2) “Audit-related” fees consist of fees in connection with the review of our interim consolidated financial statements. (3) “Tax Fees” consist of fees billed for tax planning advice in respect of intercompany arrangements and structuring in connection with both our initial public offering (“IPO”) and ongoing operations. (4) “All Other Fees” consist of non-audit fees paid to PwC for advisory services in relation to fundraising F-3 shelfand registration and Environmental, Social and Governance landscaping.statements filed with the SEC.
The Audit and Risk Committee has determined that the rendering of non-audit services by PwC is compatible with maintaining the principal accountant’s independence. Pre-Approval Procedures The Audit and Risk Committee pre-approves all audit and permissible non-audit services provided by the independent registered certified public accounting firm unless an exception to such pre-approval exists under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or the rules of the SEC. These services may include audit services, audit-related services, tax services and other services. Our Audit and Risk Committee has pre-approved all services performed by the independent registered public accounting firm since the pre-approval policy was adopted prior to our initial public offering.
REQUIRED VOTE
REQUIRED VOTE
The ratification of the selection of PwC as our independent registered public accounting firm requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. This vote is advisory and non-binding. Abstentions and broker non-votes, if any, will have no effect on this proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board of Directors recommends that the shareholders vote “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022.2023.
PROPOSAL 5—7—AUTHORIZATION FOR THE AUDIT AND RISK COMMITTEE TO DETERMINE THE AUDITORS’ REMUNERATION FOR THE FISCAL YEAR ENDING DECEMBER 31, 20222023 Proposal 57 authorizes the Audit and Risk Committee to determine our auditors’ remuneration for the fiscal year ending December 31, 2022.2023. Fees for PwC, our independent registered public accounting firm and our statutory auditor, in respect of the years ended December 31, 20212022 and December 31, 2020,2021, are set forth in Proposal 46 above. The Audit and Risk Committee is directly responsible for the appointment, retention and termination, and for determining the compensation of the Company’s independent registered public accounting firm. The Audit and Risk Committee shall pre-approve all auditing services and the terms thereof and non-audit services (other than non-audit services prohibited under Section 10A(g) of the Exchange Act or the applicable rules of the SEC or the Public Company Accounting Oversight Board (“PCAOB”)), except that pre-approval is not required for the provision of non-audit services if the “de minimis” provisions of Section 10A(i)(1)(B) of the Exchange Act are satisfied. The Audit and Risk Committee may delegate to the chairperson of the Audit and Risk Committee the authority to grant pre-approvals for audit and non-audit services, provided such approvals are presented to the Audit and Risk Committee at its next scheduled meeting. All services provided by PwC during fiscal year 20212022 were pre-approved by the Audit and Risk Committee in accordance with the pre-approval policy described above, and all audit-related fees, tax fees and other fees during the fiscal year 20212022 were approved by the Audit and Risk Committee. REQUIRED VOTE The authorization of the Audit and Risk Committee to determine auditor remuneration requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, will have no effect on this proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board of Directors recommends that the shareholders vote “FOR” the authorization of our Audit and Risk Committee to determine our auditors’ remuneration for the fiscal year ending December 31, 2022.2023.
PROPOSAL 6—8—RESOLUTION TO RECEIVE THE COMPANY’S U.K. STATUTORY ANNUAL ACCOUNTS AND REPORTS
At the Meeting, our Board will present our U.K. statutory annual accounts and reports for the period January 1, 20212022 through December 31, 2021,2022, which includes the audited portion of the directors’ annual report on remuneration. REQUIRED VOTE The receipt of the U.K. statutory annual accounts and reports requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, will have no effect on this proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board of Directors recommends that the shareholders vote “FOR” the resolution to receive our U.K. statutory annual accounts and reports.
PROPOSAL 7—9—APPROVAL OF OUR U.K. STATUTORY DIRECTORS’ ANNUAL REPORT ON REMUNERATION Our U.K. statutory directors’ remuneration report is set forth as Annex A to this Proxy Statement. The directors’ remuneration report includes the annual report on remuneration. This document describes in detail our remuneration policies and procedures and explains how these policies and procedures help to achieve our compensation objectives with regard to our directors and the retention of high-quality directors. Our Board of Directors and our Compensation and Leadership Development Committee believe that the policies and procedures as articulated in the directors’ remuneration report are effective and that as a result of these policies and procedures we have and will continue to have high-quality directors. Our Board of Directors has approved and signed the report in accordance with English law. At the Meeting, the shareholders will vote on the annual report on remuneration. This vote is advisory and non-binding. Although non-binding, our Board and Compensation and Leadership Development Committee will review and consider the voting results when making future decisions regarding our director remuneration program. Following the Meeting, and as required under English law, the directors’ annual report on remuneration will be delivered to the U.K. Registrar of Companies. REQUIRED VOTE The approval of our U.K. statutory directors’ annual report on remuneration requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. This vote is advisory and non-binding. Abstentions and broker non-votes, if any, will have no effect on this proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board of Directors recommends that the shareholders vote “FOR” approval of our U.K. statutory directors’ annual report on remuneration set forth in Annex A.
PROPOSAL 8— NON-BINDING, ADVISORY VOTE ON THE FREQUENCY OF FUTURE VOTES ON EXECUTIVE COMPENSATION The Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended, and Section 14A of the Exchange Act enable our shareholders to vote, on a non-binding, advisory basis, for their preference as to how frequently we should hold future votes on an advisory, non-binding basis to approve the compensation of our named executive officers, also known as a “Say-on-Pay” proposal. We are asking our shareholders whether our future Say-on-Pay votes should occur every one, two, or three years. Shareholders may also abstain from voting.
This vote is advisory and non-binding. However, our Board and Compensation and Leadership Development Committee value the opinions of our shareholders and will review and consider the voting results when making future decisions regarding the frequency of votes on the compensation of our named executive officers.
Currently, the Board believes that it is in the best interests of the Company and our shareholders to hold a Say-on-Pay vote every year, and this is the frequency recommended by our Board. We believe this frequency will enable our shareholders to vote, on a non-binding,advisory basis, on our most recent executive compensation practices and decisions as presented in our annual proxy statements, which will lead to greater transparency and more meaningful and timely communication between the Company and our shareholders regarding the compensation of our named executive officers. Accordingly, we ask our shareholders to indicate their preferred voting frequency by voting for every “one year,” “two years,” or “three years” (or abstaining from voting) in response to the following resolution at the Meeting:
“RESOLVED, to approve, on a non-binding, advisory basis, the alternative of every one year, two years, or three years as the preferred frequency with which the Company is to hold an advisory vote on the compensation of the Company’s named executive officers and the frequency that receives the highest number of votes cast by shareholders in person or by proxy at the AGM will be deemed the preferred frequency.”
REQUIRED VOTE
The Ordinary Shareholder Proxy Form provides shareholders with the opportunity to vote on one of three options with respect to this proposal (for the approval of holding the vote every year, for holding the vote every two years or for holding the vote every three years). These options are included in sub-resolutions 8a, 8b and 8c on the Ordinary Shareholder Proxy Form. If a shareholder votes on more than one of this proposal's sub-resolutions on the Ordinary Shareholder Proxy Form, his or her vote will be deemed invalid and will not be counted on the matter. The ADS Proxy Card provides the holders of ADSs with the opportunity to choose among four options with respect to this proposal (holding the vote every one, two, or three years, or abstaining). The option that receives the highest number of votes from the voting power present in person or by proxy at the Meeting and entitled to vote thereon will be deemed to be the frequency preferred by our shareholders. Abstentions and broker non-votes will have no effect on this proposal.
RECOMMENDATION OF THE BOARD OF DIRECTORS
Our Board of Directors recommends that the shareholders vote “FOR” the proposal that future, non-binding advisory votes on the compensation of our named executive officers occur every year.
PROPOSAL 9—10—ADVISORY (NON-BINDING) VOTE TO APPROVE THE COMPANY’S EXECUTIVE COMPENSATION
Section 14A of the Exchange Act requires that we provide our shareholders with the opportunity to vote to approve, on a non-binding, advisory basis, not less frequently than once every three years, the compensation of our named executive officers as disclosed in this Proxy Statement in accordance withofficers. Based on the compensation disclosure rulesvoting results of the SEC.vote on the frequency of future votes on executive compensation at our 2022 Annual General Meeting of Shareholders (the "2022 AGM"), our Board has determined that an advisory vote by the shareholders regarding named executive officer compensation will be conducted on an annual basis. Our compensation programs are designed to effectively align our executives’ interests with the interests of our shareholders by focusing on long-term equity incentives that correlate with the growth of sustainable long-term value for our shareholders. Shareholders are urged to read the section titled “ExecutiveCompensation Discussion and Analysis” in this Proxy Statement, which discusses how our executive compensation policies and practices implement our compensation philosophy and contains tabular information and narrative discussion about the compensation of our named executive officers in conjunction withfor the section titled “Named Executive Officer Compensation,” which provides additional information on the 2021 compensation of our Named Executive Officers.year ended December 31, 2022. Our Board and our Compensation and Leadership Development Committee believe that these policies and practices are effective in implementing our compensation philosophy and in achieving our compensation program goals. The vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the compensation of our named executive officers, as described in this Proxy Statement in accordance with the compensation disclosure rules of the SEC. Accordingly, we are asking our shareholders to vote on the following resolution at the Meeting: RESOLVED, that the shareholders hereby approve, on a non-binding advisory basis, the compensation paid to the Company’s named executive officers, as disclosed in the Company’s Proxy Statement for the 20222023 Annual General Meeting, pursuant to the compensation disclosure rules of the SEC, including the Executive Compensation Discussion and Analysis,section, the compensation tables and the narrative discussions that accompany the compensation tables. REQUIRED VOTE The approval of this advisory non-binding proposal requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, will have no effect on this proposal. The vote is advisory, which means that the vote is not binding on the Company, our Board or our Compensation and Leadership Development Committee. To the extent there is any significant vote against our named executive officer compensation as disclosed in this Proxy Statement, our Compensation and Leadership Development Committee will evaluate whether any actions are necessary to address the concerns of shareholders. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board of Directors recommends that the shareholders vote “FOR” the approval, on a non-binding advisory basis, of the compensation of our named executive officers, as disclosed in this Proxy Statement.
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE BOARD OF DIRECTORS Below is a list of our directors and their positions and ages as of April 19, 2022.4, 2023. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Age | | | | Position | | George Goldsmith | | 6667 | | | | Chief Executive Officer, Chair of the Board | | David Norton | | 7071 | | | | Lead Director | Jason CammKabir Nath | | 3358 | | | | Chief Executive Officer, Director | | Annalisa Jenkins, MBBS | | 5657 | | | | Director | | Thomas Lönngren | | 7172 | | | | Director | | Ekaterina Malievskaia | | 5556 | | | | Chief Innovation Officer, Director | | Linda McGoldrick | | 6768 | | | | Director | | Robert McQuade | | 6566 | | | | Director | | Wayne Riley | | 6272 | | | | Director |
During the year ended December 31, 2021,2022, there were elevensix full meetings of our Board. All of our then serving Directors attended a minimum of 75% of the aggregate of the meetings of the Board of Directors and meetings of the committees of which he or she was a member during 2021.2022. Under our Corporate Governance Guidelines, each of our directors is expected to make reasonable efforts to attend meetings of the Board. Directors are also expected to attend our annual general meeting of shareholders to the extent practicable. The biographical information for Thomas LönngrenGeorge Goldsmith, Annalisa Jenkins, Linda McGoldrick and Robert McQuade,Kabir Nath, the nominees to our Board, is provided in “Proposal 1—Re-Election of Thomas LönngrenGeorge Goldsmith to the Board of Directors,” and “Proposal 2—Re-Election of Robert McQuadeAnnalisa Jenkins to the Board of Directors,” “Proposal 3—Re-Election of Linda McGoldrick to the Board of Directors,” and “Proposal 4—Re-Election of Kabir Nath to the Board of Directors,” respectively. Below is biographical information for those directors who are not standing for re-election at this Meeting and who will remain seated following the Meeting. George Goldsmith has served as our Chief Executive Officer and Chair of our Board since June 2017. Previously, Mr. Goldsmith served as Chair and Chief Executive Officer at Tapestry Networks, which he co-founded in 2002, until 2005, and he continues to serve as Non-Executive Chairman. Mr. Goldsmith was Chief Executive Officer of TomorrowLab@McKinsey from 2000 to 2001, and prior to that served as Senior Advisor to McKinsey & Company from 1997 to 2000. Prior to that he served as Managing Director of the Lotus Institute after the Lotus Development Corporation’s acquisition of his first company, The Human Interface Group. Mr. Goldsmith also serves on the board of directors of COMPASS Pathways Limited. Mr. Goldsmith received his bachelor’s degree in Psychology from the University of Rochester and his masters in Clinical Psychology from the University of Connecticut. We believe that Mr. Goldsmith is qualified to serve on our Board because of his executive experience in our industry.
David Norton has served as a member of our Board since May 2018. Until his retirement in September 2011, Mr. Norton was Company Group Chairman, Global Pharmaceuticals for Johnson & Johnson, a public healthcare company. Mr. Norton began his Johnson & Johnson career in 1979 and held a number of positions at the company, including Company Group Chairman, Worldwide Commercial and Operations for the CNS, Internal Medicine franchise from 2006 to 2009, Company Group Chairman for the pharmaceutical businesses in Europe, the Middle East and Africa from 2004 to 2006, and Company Group Chairman for the pharmaceutical businesses in North America from 2003 to 2004. Mr. Norton currently serves on the board of directors of Mallinckrodt, PLC, Forepont Capital, LLC, and the Global Alliance for TB Drug Development (now known as TB Alliance). Previously during the past five years, Mr. Norton served on the board of directors of Mallinckrodt, PLC (NYSE American: MNK) and Vivus, Inc. Mr. Norton is a graduate of Control Data Institute, Australia and the College of Distributive Trades, United Kingdom. We believe that Mr. Norton is qualified to serve on our Board because of his experience, qualifications, attributes and skills, including his extensive global pharmaceutical experience. Annalisa Jenkins, MBBS, FRCPThomas Lönngren, has served as a member of our Board since May 2018. Mr. Lönngren currently serves as the Director at PharmaExec Consulting AB and as a Strategic Advisor at the NDA Group, which he has done since 2010. He is non-executive board member and chairman at Egetis Therapeutics AB, Sweden and board member at the NDA group Sweden. He acts as an advisor to the following companies and organizations: Artis Venture, San Francisco, U.S., Baren Therapeutics, San Francisco, U.S., faculty member of GLG Institute (Gerson Lehrman Group), New York, U.S., and special advisor to the Centre for Innovation in Regulatory Science (CIRS), London, U.K. He was the Deputy General Director of the Swedish Medical Product Agency until 2000. From November 20172001 until April 2019, Dr. Jenkins2010, Mr. Lönngren served as the Chief Executive Officer of PlaqueTec Ltd., a biotechnology company focusing on coronary artery disease treatment and prevention. Previously, Dr. Jenkins served as the Chief Executive Officer and a memberDirector of the boardEuropean Medical Agency. Mr. Lönngren received his degree in pharmacy and MSc in Social and Regulatory Pharmacy from Uppsala University. He is an Honorary Member of directorsthe Royal Pharmaceutical Society of Dimension Therapeutics, Inc., a biotechnology company focused on rareGreat Britain, Honorary Fellow of the Royal College of Physicians in Great Britain, and metabolic diseases associated withholds Honorary Doctorates from the liver, from September 2014 until its sale to Ultragenyx PharmaceuticalUniversity of Uppsala and University of Bath, U.K. We
Inc. in November 2017. From October 2013believe that Mr. Lönngren is qualified to March 2014,serve on our Board because of his experience, qualifications, attributes and skills, including his extensive pharmaceutical consulting experience.
Robert McQuade, Ph.D. has served as a member of our Board since April 2020. Dr. Jenkins servedMcQuade currently serves as the Executive Vice President Head& Chief Strategic Officer at Otsuka Pharmaceutical Development & Commercialization, Inc., where he has served since 2004. Dr. McQuade is also the Officer and Manager of Globalthe McQuade Center for Strategic Research and Development for Merck Serono Pharmaceuticals, a biopharmaceutical company. Previously, from September 2011 to October 2013, she served as Merck Serono’s Executive Vice President, Global Development and Medical, and was a member of Merck Serono’s executive committee. Prior to that,LLC since February 2020. Dr. Jenkins pursued a 15-year career at Bristol-Myers Squibb Company, a biopharmaceutical company, where, from July 2009 to June 2011 she was a Senior Vice President and Head of Global Medical Affairs. Dr. Jenkins isMcQuade currently a committee member of the science board to the FDA, chairs the Court of the London School of Hygiene and Tropical Medicine and is a non-executive director of Genomics England. Dr. Jenkins serves on the board of directors of Avrobio,entities related to Otsuka, including Otsuka America Pharmaceutical, Inc. (Nasdaq: AVRO), Oncimmune Holdings plc (LSE: ONC)Astex Pharmaceutical, Inc., Affimed GmbH (Nasdaq: AFMD)Astex Pharmaceutical, Ltd., Avanir Pharmaceuticals, Visterra, Inc., Otsuka Pharmaceutical Development & Commercialization, Inc. and a numberthe McQuade Center for Strategic Research and Development. He also serves on the board of privately held biotechnology and life science companies.directors of The Technology Accelerator Co., which is based in Charleston, SC. Dr. Jenkins graduated with aMcQuade received his degree in medicinebiology from St. Bartholomew’s HospitalDavidson College and completed his Ph.D. in thebiochemistry from University of LondonNorth Carolina at Chapel Hill. Prior to joining Otsuka, Dr. McQuade worked in drug discovery research at Schering-Plough Corp. and subsequently trained in cardiovascular medicine in the U.K. National Health Service. Earlier in her career, Dr. Jenkins served as a Medical Officer in the British Royal Navy.global medical affairs at Bristol-Myers Squibb Company (NYSE: BMS). We believe that Dr. JenkinsMcQuade is qualified to serve on our Board based on her industrybecause of his experience in the fieldclinical development and regulatory affairs, in which we operateaddition to his qualifications, attributes and her executive experience with companies in our industry.skills, including his extensive pharmaceutical experience. Ekaterina Malievskaia M.D. has served as our Chief Innovation Officer since January 2020 and as a member of our Board since 2017. Prior to her role as our Chief Innovation Officer, Dr. Malievskaia served as our Head of Research and Development from January 2019 to January 2020 and as our Chief Medical Officer from June 2017 to 2019. Dr. Malievskaia also previously served as clinical faculty at Mount Sinai School of Medicine and as a research professor in Public Health at the City University of New York. Prior to these roles, Dr. Malievskaia worked in clinical, academic and public health from 1999 until co-founding COMPASS. Dr. Malievskaia received her Doctor of Medicine from St. Petersburg Medical Academy. We believe that Dr. Malievskaia is qualified to serve on our Board because of her clinical practice, executive experience and public health academic background. Linda McGoldrick has served as a director of our company since September 2020. In 1985, Ms. McGoldrick founded, and currently serves as Chair and Chief Executive Officer of, Financial Health Associates International, a strategic consulting company specializing in healthcare and life sciences. From April 2019 through December 2019, Ms. McGoldrick served as President and interim Chief Executive Officer of Zillion, Inc., a health, technology and condition management company. Over her professional career, she has served in a number of leadership roles, including senior vice president and National Development director for the Healthcare and Life Sciences Industry Practices at Marsh-MMC Companies, international operations and marketing director of Veos plc, a European medical devices company, and managing director Europe for Kaiser Permanente International. In 2018, Ms. McGoldrick was appointed by the Governor of Massachusetts to serve on the state’s Health Information Technology Commission. Ms. McGoldrick has served as a director of numerous publicly traded and private held companies and non-profit organizations in the United States, United Kingdom and Europe and currently serves on the faculty of the National Association of Corporate Directors. Ms. McGoldrick previously served on the board of directors of Avadim Health, Inc. Ms. McGoldrick received her bachelor of arts in sociology from Ohio Wesleyan University and master of social work from the University of Pennsylvania and master of business administration in management from the Wharton School, University of Pennsylvania. We believe that Ms. McGoldrick is qualified to serve on our Board because of her extensive experience as a director, global business strategy leader and policy expert for U.S. and European companies and organizations.
Wayne J Riley, M.D., MPH, M.B.A. has served as a member of our Board since March 2021. Dr. Riley serves as the President of the State University of New York (SUNY) Downstate Health Sciences University, Brooklyn, NY, USA where he holds tenured professorships in internal medicine, and health policy and management and has served since January 2017. Prior to this, Dr. Riley served as a clinical professor of medicine and adjunct professor of health policy at Vanderbilt University from July 2007 until June 2017, and as President and Chief Executive Officer of Meharry Medical College from January 2007 until July 2013. In addition, Dr. Riley currently serves as an elected member of the U.S. National Academy of Medicine, a Commissioner of the U.S. Medicare Payment Advisory Commission, Chair of the Board of the New York Academy of Medicine, President of the Society of Medical Administrators, an organization of leading North American physician executives, and a President Emeritus of the American College of Physicians. Dr. Riley is also a member of the board of directors of HCA Healthcare Inc,Inc. (NYSE: HCA), where he serves as Chair of the Patient Safety & Quality Committee and a member of the Audit & Compliance and Nominating & Corporate Governance Committees and a member of the board of directors of HeartFlow, Inc. He also previously served as a Director of Vertex Pharmaceuticals Inc. (Nasdaq: VRTX). Dr. Riley holds a BA from Yale University, Masters in Public Health from the Tulane University School of Public Health and Tropical Medicine, M.D. from the Morehouse School of Medicine, and MBA from Rice University. We believe that Dr. Riley is qualified to serve on our Board because of his experience, qualifications, attributes and skills, including his extensive medical and health policy experience.
CORPORATE GOVERNANCE Structure of our Board of Directors Our Articles of Association and Corporate Governance Guidelines gives our Board the flexibility to determine the appropriate leadership structure for the Board, including whether the offices of DirectorsChief Executive Officer and Chair of the Board should be separate or combined and why the Board’ leadership structure is appropriate given the specific characteristics or circumstances of our company and the Board’s assessment of its leadership from time to time. We currently separate the roles of Chief Executive Officer and Chair of the Board . Separating the duties of the Chair from the duties of the Chief Executive Officer allows our Chief Executive Officer to focus on our day-to-day business, while allowing the Chair to lead the Board in its fundamental role of providing advice to and independent oversight of management. Specifically, the Chair presides over meetings of the Board, facilitates communications between management and the Board and assists with other corporate governance matters. We believe that having a non-executive Chair can enhance the effectiveness of the Board as a whole.
Our Board is currently chaired by the Chief Executive Officerour co-founder and a significant shareholder, George Goldsmith. The Company believes that it is advantageous to have a Board Chair with an extensive history with and knowledge of the Company George Goldsmith.(as is the case with our current Board Chair). We have designated David Norton as our lead independent director to help reinforce the independence of our Board of Directors as a whole. As lead independent director, Mr. Norton provides leadership to our Board if circumstances arise in which the roles of Chief Executive Officerco-founder and significant shareholder and Board Chair may be, or may be perceived to be, in conflict, and performs such additional duties as our Board may otherwise determine and delegate, including serving as principal liaison between the Board Chair and our independent directors. The Company believes that combining the positions of Chief Executive Officer and Board Chair helps to ensure that our Board and management act with a common purpose. We believe that combining the positions of Chief Executive Officer and Board Chair provides a single, clear chain of command to execute our business plans. In addition, we believe that a combined Chief Executive Officer/Board Chair is better positioned to facilitate the regular flow of information between management and the Board. The Company also believes that it is advantageous to have a Board Chair with an extensive history with and knowledge of the Company (as is the case with the Company’s Chief Executive Officer).
Independence of our Board of Directors Our Board of Directors has determined that all of our current directors, other than George Goldsmith, our Board Chair, Kabir Nath, our Chief Executive Officer, and Ekaterina Malievskaia, our Chief Innovation Officer, qualify as “independent” directors in accordance with the independence requirements under the applicable Nasdaq rules as well as applicable rules promulgated by the SEC. Mr. GoldsmithNath and Dr. Malievskaia are not considered independent because they are employees of the Company. Mr. Goldsmith is not considered independent because he served as our chief executive officer during the past three years. Our Board of Directors has made a subjective determination as to each independent director that no relationships exist that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, our Board reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and our management. Mr. Goldsmith is married to Dr. Malievskaia. Additionally, until his resignation effective April 16, 2021, Dr. Maliveskaia’s son worked for us as a Stakeholder Engagement and Operations Associate. There are no other family relationships among any of our directors or executive officers. Our independent directors meet in regularly scheduled executive sessions at which only independent directors are present. All ofThe Audit and Risk Committee, the committees of our BoardCompensation and Leadership Development Committee and the Nominating and Corporate Governance Committee are each comprised entirely of directors determined by the Board of Directors to be independent. Board Oversight of Risk Management and ESG IssuesMatters Our management is primarily responsible for assessing and managing risk while ourand one of the key functions of the Board is responsible for overseeing management’s executioninformed oversight of our risk management process. In carrying out its responsibilities. Ourrisk oversight responsibilities, the Board reviews the long and short-term operational and external risks facing the Company through its participation in long-range strategic planning, and ongoing reports from various Board standing committees that address risks inherent in their respective areas of Directorsoversight. On an ongoing basis, the Board and management identify key long and short-term risks, assess their potential impact and likelihood, and, where appropriate, implement operational measures and controls or purchase insurance coverage in order to help ensure adequate risk mitigation. The Board is supported by its committees in fulfillment of this responsibility.its risk oversight responsibilities. For example, our Audit and Risk Committee focuses on our overall financial risk by evaluating our internal controls and disclosure policies as well as ensuring the integrity of our financial statements and periodic reports. The Audit and Risk Committee also monitors compliance with legal and regulatory requirements. At its meetings, our Audit and Risk Committee receives reports concerning material risks and significant updates on compliance and risk management matters from our Chief Legal Officer and other executive officers, as necessary. Our Compensation and Leadership Development Committee (the “Compensation Committee”) strives to create incentives that encourage an appropriate level of risk-taking consistent with our business strategy. Finally, our Nominating and Corporate Governance Committee ensures that our governance policies and procedures are appropriate in light of the risks we face. Most of the Environmental, Social, and Governance (“ESG”) matters prioritized as part of our ESG framework are embedded in the Company’s strategic and operational plans, and are therefore overseen by the Board as part of regular updates and discussions that the Board receives and holds on these plans. The Board also specifically discusses our ESG framework at least once a year. Furthermore, Board oversight of specific ESG matters occurs through the committees of the Board: our Nominating and Corporate Governance Committee oversees our corporate governance guidelines; our Audit and Risk Committee oversees our risk and compliance framework, our code of conduct and ethics, as well as data privacy and security matters; and our Compensation and Leadership Development Committee oversees talent and employee-related matters, and receives regular updates from our Chief People Officer onhuman capital management strategies, including our employee well-being program and equity, diversity and inclusion initiatives.
Board Evaluation Process Our Board of Directors is committed to assessing its own performance as a board in order to identify its strengths as well as areas in which it may improve its performance. The self-evaluationboard evaluation process, which is overseen by the Nominating and Corporate Governance Committee, involves the completion of annual written questionnaires by the directors review and discussioninterviews with members of the Board, key members of management and key advisors to the Board. The results of the evaluationsboard evaluation process are reviewed and discussed, including considerations of action plans to address any issues, by both the Nominating and Corporate Governance Committee and our Board, and consideration of action plans to address any issues.Board. Committees of Our Board of Directors Our Board of Directors has three standing committees: the Audit and Risk Committee, the Compensation and Leadership Development Committee, and the Nominating and Corporate Governance Committee. We have also establishedhave an Innovation and Research Committee, which met three times last year, but this committeemeets on an ad hoc, as needed basis and does not yet have a charter in place that governs its purpose and duties. The Innovation and Research Committee meets to oversee the development and progress of programs to research and develop drug and technology assets that aid our mission to accelerate patient access to evidence-based innovation in mental health. The charters for our Audit and Risk Committee, Compensation and Leadership Development Committee and Nominating and Corporate Governance Committee can be found on the “Corporate Governance–Documents and Charters” section of our investor relations website at ir.compasspathways.com. Each such committee reviews these charters at least annually. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Audit and Risk Committee | | Compensation and Leadership Development Committee | | Nominating and
Corporate
Governance | Innovation and Research Committee | | | George Goldsmith | | | | | | | | | | David Norton | | | | X | | | | | Jason CammKabir Nath | | | | X | | X | X | | | Annalisa Jenkins, MBBS | | X | | Chair | | | X | | | Thomas Lönngren | | | | | | Chair | | | | Ekaterina Malievskaia | | | | | | | X | | | Linda McGoldrick | | Chair | | | | X | | | | Robert McQuade | | X | | | | | Chair | | | Wayne Riley | | | | X | | X | | |
Audit and Risk Committee Our Audit and Risk Committee currently consists of Annalisa Jenkins, Linda McGoldrick and Robert McQuade and assists our Board in overseeing our accounting and financial reporting processes. Ms. McGoldrick serves as chair of our Audit and Risk Committee. Our Audit and Risk Committee consists exclusively of members of our Board who are financially literate, and Dr. Jenkins and Ms. McGoldrick are each considered an “audit committee financial expert” as defined by applicable SEC rules and has the requisite financial sophistication as defined under the applicable Nasdaq rules and regulations. Our Board of Directors has determined that all of the members of our Audit and Risk Committee satisfy the “independence” requirements set forth in Rule 10A-3 under the Exchange Act. Our Audit and Risk Committee met fivesix times in 20212022 and oversees and reviews our internal controls, accounting policies and financial reporting, and provides a forum through which our independent registered public accounting firm reports. Our Audit and Risk Committee meets regularly with our independent registered public accounting firm without management present. Our Audit and Risk Committee operates under a written charter that satisfies the applicable standards of the SEC and Nasdaq. Our Audit and Risk Committee’s responsibilities include: •appointing, approving the compensation of, and assessing the performance and independence of our independent registered public accounting firm; •approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm;
•reviewing the audit plan with the independent registered public accounting firm and members of management responsible for preparing our financial statements and discussing with management and the
independent registered public accounting firm our annual and quarterly financial statements and related disclosures as well as critical accounting policies and practices used by us; •discussing with the independent registered public accounting firm its independence and obtaining required written communications required by the PCAOB; •exercising general oversight over our information security and technology risks, including our information security and related risk management programs; and •monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements and reviewing all related party transactions for potential conflict of interest situations and approving all such transactions. Compensation and Leadership Development Committee Our Compensation and Leadership Development Committee currently consists of Jason Camm, Annalisa Jenkins, David Norton and Wayne Riley. Dr. Jenkins serves as chair of our Compensation and Leadership Development Committee. Under SEC and Nasdaq rules, there are heightened independence standards for members of our Compensation and Leadership Development Committee, including a prohibition against the receipt of any compensation from us other than standard board member fees. Each member of our Compensation and Leadership Development Committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act. Our Board of Directors has determined that each member of our Compensation and Leadership Development Committee is “independent” as defined under the applicable Nasdaq rules. Our Compensation and Leadership Development Committee held fivesix meetings during 2021.2022. Our Compensation and Leadership Development Committee’s responsibilities include: •reviewing policies relevant to the consideration and determination of compensation of our directors and executive officers; •overseeing and administering our employee share option scheme or equity incentive plans in operation from time to time, including reviewing and approving grants and awards; •reviewing and approving certain corporate goals and objectives relating to the compensation of our chief executive officer, evaluating the performance of our chief executive officer in light of such corporate goals and objectives, and recommending the compensation of our chief executive officer to the Board based on such evaluation; •reviewing and recommending to our Board the compensation of our other executive officers and our directors; •overseeing our strategies, programs and initiatives related to equity, diversity and inclusion, gender pay parity and creating a positive working environment; •reviewing and overseeing our human capital management strategies, policies and practices, including employee health, safety and well-being, workforce belong, inclusion and diversity efforts and overall employee engagement and retention; and •reviewing and approving the retention of consulting firm or outside advisor to assist in the evaluation of compensation matters. The Compensation and Leadership Development Committee has the authority to delegate certain responsibilities to one or more subcommittees consisting of one or more of its members, but has not delegated such authority to a subcommittee. Compensation Committee Interlocks and Insider Participation
None of the members of our Compensation Committee, which include Dr. Jenkins, Mr. Camm, Mr. Norton and Dr. Riley, has at any time during the prior year been one of our officers or employees or was formerly an officer. None of our executive officers currently serves, or in the past fiscal year has served, as a member of our Compensation Committee or the compensation committee of any entity that has one or more executive officers serving on our Board.
Our Board of Directors has delegated to the Compensation and Leadership Development Committee the authority to approve any proposed compensation for our executive officers other than the Chief Executive Officer whose compensation is recommended to the Board for approval based on the Compensation and Leadership Development Committee’s evaluation of his performance in relation to our goals and objectives. Non-executive director compensation is recommended by our Compensation and Leadership Development Committee to the Board of Directors for approval. Our Chief Executive Officer may participate in general discussions with our Compensation and Leadership Development
Committee and Board of Directors about these compensation matters, but he does not participate in discussions during which his individual compensation is being considered and approved. In 2021,2022, the Compensation and Leadership Development Committee retained the services of Aon’s Human Capital Solutions practice, a division of Aon plc (“Aon”), an independent compensation consultant, to assist the Compensation and Leadership Development Committee with respect to compensation actions in 20212022 with the goal of ensuring that our compensation arrangements for our Chief Executive Officer, our other senior executive officers and our non-executive directors were competitive.
Nominating and Corporate Governance Committee Our Nominating and Corporate Governance Committee currently consists of Thomas Lönngren, Jason Camm, Linda McGoldrick and Wayne Riley. Mr. Lönngren serves as chair of our nominatingNominating and corporate governanceCorporate Governance committee. Our Board of Directors has determined that each member of our Nominating and Corporate Governance Committee is “independent” as defined under the applicable Nasdaq rules. Our Nominating and Corporate Governance Committee held three meetings during 2021.2022. Our nominatingNominating and corporate governanceCorporate Governance committee’s responsibilities include: •developing and recommending to the Board criteria for board and committee membership; •establishing procedures for identifying and evaluating board of director candidates, including nominees recommended by shareholders, including procedures by which shareholders may recommend director candidates; •identifying individuals qualified to become members of the Board; •evaluating the suitability of individual prospective director candidates, including considering the benefits of diversity, including diversity of thought, educational and professional background, gender, race, age, sexual orientation or ethnic and national background; •recommending to our Board the persons to be nominated for election as directors and to each of our Board’s committees; •developing and recommending to our Board a set of corporate governance guidelines, and regularly reviewing policies and guidelines adopted by the Board or its committees; and •overseeing the evaluation of our Board and its committees. Our Board is responsible for filling vacancies on our Board and for nominating candidates for election by our shareholders each year in the class of directors whose term expires at the relevant annual general meeting. The Board delegates the selection and nomination process to the Nominating and Corporate Governance Committee, with the expectation that other members of the Board, and of management, will be requested to take part in the process as appropriate. The Nominating and Corporate Governance Committee considers candidates for Board of Director membership by soliciting recommendations from any of the following sources: independent directors, the Chief Executive Officer, other executive officers, third-party search firms, or any other source it deems appropriate. Additionally, the Nominating and Corporate Governance Committee will review and evaluate the qualifications of any such proposed candidate, and conduct inquiries it deems appropriate. Any shareholder who wishes to recommend a candidate for consideration by the committee as a nominee for director should follow the procedures described later in this Proxy Statement under the heading “Additional Information—Shareholder Proposals.” Our Board of Directors is responsible for filling vacancies on our Board and for nominating candidates for election by our shareholders each year in the class of directors whose term expires at the relevant annual general meeting. The Board of Directors delegates the selection and nomination process to the Nominating and Corporate Governance Committee, with the expectation that other members of the Board of Directors, and of management, will be requested to take part in the process as appropriate.
Director Nomination Process The process followed by our Nominating and Corporate Governance Committee to identify and evaluate director candidates includes requests to board members and others for recommendations, including through the use of search firms or other advisors, meetings from time to time to evaluate biographical information and background material relating to potential candidates, and interviews of selected candidates by management, recruiters, members of the committee and our Board. Once candidates have been identified, the Nominating and Corporate Governance Committee confirms that the candidates meet all of the minimum qualifications and other criteria for director nominees approved by the Board of Directors and all facts and circumstances that it deems appropriate or advisable. The Nominating and Corporate Governance
Committee may gather information about the candidates that relate to their skills, their depth and breadth of business experience or other background characteristics, their independence, the needs of the Board and any other item of information that the Nominating and Corporate Governance Committee deems to be appropriate in the evaluation process. The Nominating and Corporate Governance Committee then meets as a group to discuss and evaluate the qualities and skills of each candidate, both on an individual basis and taking into account the overall composition and needs of our Board. Based on the results of the evaluation process, the Nominating and Corporate Governance Committee recommends candidates for the Board of Directors’Board’s approval to fill a vacancy or as director nominees for election to the Board of Directors by our shareholders each year in the class of directors whose term expires at the relevant annual general meeting. The qualifications, qualities and skills that our Nominating and Corporate Governance Committee believes must be met by a committee-recommended nominee for a position on our Board are as follows:
•The nominee shall have experience at a strategic or policymaking level in a business, government, non-profit or academic organization of high standing. •The nominee shall be accomplished in his or her respective field, with superior credentials and recognition. •The nominee shall be well regarded in the community and shall have a long-term reputation for the high ethical and moral standards. •The nominee shall have sufficient time and availability to devote to the affairs of the Company, particularly in light of the number of boards of directors on which such nominee may serve. •To the extent such nominee serves or has previously served on other boards, the nominee shall have a demonstrated history of actively contributing at board meetings. WeWhile we have no formal policy regarding board diversity.diversity, our Corporate Governance Guidelines and Nominating and Corporate Governance Committee charter provide that when evaluating proposed director candidates, the Nominating and Corporate Governance Committee (or any search firm acting under the direction of the Nominating and Corporate Governance Committee) shall consider the benefits of diversity, including diversity of thought, educational and professional background, gender, race, age, sexual orientation or ethnic and national background. Our priority in selection of board members is identification of members who will further the interests of our shareholders through consideration of a number of facts and circumstances, including among other things, the skills of the prospective director candidate, his or her depth and breadth of business experience or other background characteristics, his or her independence and the needs of the Board of Directors.Board.
The table below provides certain highlights of the composition of our Board members and nominees as of April 15, 2022.4, 2023. Each of the categories listed in the below table has the meaning as it is used in Nasdaq Rule 5605(f).
| | | | | | | | | | | | | | | | Board Diversity Matrix (As of April 15, 2022) | | Total Number of Directors | 9 | | Female | Male | Non‐Binary | Did Not Disclose Gender | | Part I: Gender Identity | | | Directors | 3 | 6 | | | | Part II: Demographic Background | | | | African American or Black | | 1 | | | | Alaskan Native or Native American | | | | | | Asian | | | | | | Hispanic or Latinx | | | | | | Native Hawaiian or Pacific Islander | | | | | | White | 3 | 5 | | | | Two or More Races or Ethnicities | | | | | | LGBTQ+ | | | Did Not Disclose Demographic Background | |
| | | | | | | | | | | | | | | | Board Diversity Matrix (As of April 4, 2023) | | Total Number of Directors | 9 | | Female | Male | Non‐Binary | Did Not Disclose Gender | | Part I: Gender Identity | | | Directors | 3 | 6 | | | | Part II: Demographic Background | | | | African American or Black | | 1 | | | | Alaskan Native or Native American | | | | | | Asian | | 1 | | | | Hispanic or Latinx | | | | | | Native Hawaiian or Pacific Islander | | | | | | White | 3 | 5 | | | | Two or More Races or Ethnicities | | 1 | | | | LGBTQ+ | | | Did Not Disclose Demographic Background | |
In addition, one director has identified as a military veteran. Shareholder Recommendations and Nominees Our Nominating and Corporate Governance Committee considers both recommendations and nominations for candidates to the Board from shareholders so long as such recommendations and nominations comply with our Articles of Association, Nominating and Corporate Governance Charter and applicable laws, including the rules and regulations of the SEC. Shareholders may recommend director nominees for consideration by the Nominating and Corporate Governance Committee by writing to our Company Secretary at the address below not less than 120 days prior to the date on which the Company’s proxy statement is released to shareholders in connection with the previous year’s annual meeting. Shareholder recommendations for director candidates must include the nominee’s name and address of record, a representation that the shareholder is a holder of the Company’s securities, as well as the nominee’s detailed biographical data and qualifications for board membership, information regarding any arrangements or understandings between the shareholder and the recommended candidate, the consent of the
proposed nominee to be named in the proxy statement and serve as a director if elected and any other information regarding the nominee that is required to be included in a proxy statement. Following verification of the shareholder status of the person submitting the recommendation, all properly submitted recommendations will be promptly brought to the attention of the Nominating and Corporate Governance Committee. Shareholders who desire to nominate persons directly for election to the Board at an annual general meeting of shareholders must meet the deadlines and other requirements set forth under “Additional Information —Shareholder Proposals.” Any vacancies on the Board of Directors occurring between our annual general meetings of shareholders may be filled by persons selected by a majority of the directors then in office, in which case any director so elected will serve until the next annual general meeting of shareholders when such director will offer himself/herself for re-election, or by persons elected by an ordinary resolution of the shareholders of the Company. You may write to the Nominating and Corporate Governance Committee at: c/o Ben Harber Company Secretary COMPASS Pathways plc 3rd Floor 1 Ashley Road, Altrincham Cheshire WA14 2DT United Kingdom Code of Business Conduct and Ethics
We have adopted a Code of Business Conduct and Ethics applicable to all of our directors, officers, employees and certain designated agents. The Code of Business Conduct and Ethics is available on the “Corporate Governance –Documents and Charters” section of our investor relations website at ir.compasspathways.com. We expect that any amendments to this code or any waivers of its requirements will be disclosed on our website. Shareholder Communication with the Board of Directors Our Board of Directors has implemented a process by which our shareholders or any interested parties may communicate with our Board as a whole or with individual members of our Board. Communications directed to our Board as a whole should be addressed to COMPASS Pathways plc 3rd Floor, 1 Ashley Road, Altrincham Cheshire WA14 2DT, United Kingdom Attn: Chair of the Board, of Directors, and communications directed to individual directors, including our Lead Independent Director, should be addressed to the attention of the individual director at the same address. Such communications may be made on an anonymous or confidential basis. All such communications received by the Company shall be delivered initially to the Company’s General Counsel, who shall review and maintain a log of all such communications. Directors may at any time review this log and request copies of any shareholder communication. Communications received will be promptly forwarded to the specified addressees thereof at the Company’s discretion. In general, communications relating to board and chief executive officer succession planning, corporate governance matters, executive compensation matters, general board oversight matters and long-term corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances, and matters as to which we tend to receive repetitive or duplicative communications. Any interested party with concerns about our company may report such concerns to the Board of Directors or the chairman of our Board and Nominating and Corporate Governance Committee by following the procedures described above. A copy of any such written communication may also be forwarded to our legal counsel and a copy of such communication may be retained for a reasonable period of time. The director may discuss the matter with our legal counsel, with independent advisors, with non-management directors, or with our management, or may take other action or no action as the director determines in good faith, using reasonable judgment, and applying his or her own discretion. Communications may be forwarded to other directors if they relate to important substantive matters and include suggestions or comments that may be important for other directors to know. The Audit and Risk Committee oversees the procedures for the receipt, retention, and treatment of complaints received by us regarding accounting, internal accounting controls or audit matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting, internal accounting controls or auditing matters. Any shareholder communications that include concerns or complaints regarding accounting, internal controls or auditing matters or potential violations of the federal securities laws or the Foreign Corrupt Practices Act will be handled in accordance with procedures adopted by the Audit and Risk Committee. We have also established a toll-free telephone number for the reporting of such activity, which is +1 877 306 1965 or +44 (0) 800 032 5911.
DIRECTOR COMPENSATION Under our Directors’ Remuneration Policy for Non-Executive Directors (“Director Compensation Policy”), the Board has the discretion to pay cash and equity fees to our non-executive directors for their Board and committee service. Our compensation arrangements for non-executive directors during 2021,2022, as set forth in our Director Compensation Policy, was comprised of an award of a fixed number of share options plus cash payment. Our Director Compensation Policy in 20212022 provided that each non-executive director will receive the following annual cash retainers for service on our Board: (a) £30,000 ($41,270)37,114) for each member, (b) £15,000 ($20,635)18,557) for the lead independent director, (increased from £10,000 from September 14, 2021), (c) £12,000 ($16,508)14,846) for the chair of the Audit and Risk Committee, (d) £8,000 ($11,005)9,897) for the chair of each of the Compensation and Leadership Development Committee and Innovation and Research Committee Chair, (e) £7,000 ($9,630) for the8,660) chair of the Nominating and Corporate Governance Committee, (increased from £6,000 from September 14, 2021), (f) £6,000 ($8,254)7,423) for each member of the Audit and Risk Committee, (g) £4,000 ($5,503)4,949) for each member of the Compensation and Leadership Development Committee, (h) £3,500 ($4,815)4,330) for each member of the Nominating and Corporate Governance Committee (increased from £3,000 from September 14, 2021) and (i) £4,000 ($5,503)4,949) for each member of the Innovation and Research Committee. Cash fees are paid to directors in GBP. All amounts have been converted from GBP to USD using the 20212022 average FX rate (£1:$1.3757)1.2371). Fees are reviewed on a periodic basis against those in similar sized companies to ensure they remain competitive and adequately reflect the time commitments and scope of the role. Supplemental fees, in addition to the Board member fees, are paid to recognize the additional time commitments and responsibilities of roles on our committees or the additional commitment of our independent director. Directors may receive limited travel or hospitality related benefits in connection with their duties. In addition to cash compensation, each non-executive director is eligible to receive share options under our equity incentive plans. We have historically awarded share options to certain non-executive directors in an amount determined at the discretion of the Board or Compensation and Leadership Development Committee. The value of all equity awards and cash compensation to any non-executive director in any calendar year for services as a non-executive director shall not exceed £750,000. We do not have a formal share ownership guideline policy for non-executive directors.
During 2021,2022, our Director Compensation Policy provided that each new non-executive director elected to our board of directorsBoard was granted an initial one-time equity award of options to purchase 24,00034,000 of our ADS on the date of such director’s initial election or appointment to the boardBoard. On June 16, 2022, the date of directors. In October 2021,our 2022 AGM, each ongoing non-executive director that continued to serve on the board (excluding any non-executive directors appointed in that year) was granted an option to purchase 12,00017,000 of our ADS, except for Mr. Riley who received an option to purchase 21,250 of our ADS. For boththe initial andgrants, options vest in 36 equal monthly installments, subject to continued service on the Board. For the annual grants, options vest 25% onin full upon the earlier to occur of the first anniversary of the date of grant date, with the remainder vesting in 36 equal monthly installments thereafter.
Going forward, annual awards to the non-executive directors will be made onor the date of the next Annual Meeting, subject to continued service on the Board.
Beginning June 2023, our revised Director Compensation Policy will provide for the payment of cash fees in U.S. dollars for all non-executive directors, other than the Board Chair, and to increase the option awards for our non-executive directors. Under the revised Director Compensation Policy, each non-executive director will receive the following cash retainers for service on our Board: (a) £80,000 for our Board Chair, (b) $40,000 for each member, (c) an additional $20,000 for our lead independent director, (d) $16,000 for the chair of the Audit and Risk Committee, (e) $12,000 for the chair of each of the Compensation and Leadership Development Committee and Innovation and Research Committee, (f) $10,000 for the chair of our Nominating and Corporate Governance Committee, (g) $8,000 for each member of our Audit and Risk Committee, (h) $6,000 for each member of the Compensation and Leadership Development Committee and the Innovation and Research Committee, and (i) $5,000 for each member of our Nominating and Corporate Governance Committee. The initial equity award will be increased to 52,000 options and the annual general meeting of shareholders, with the grant guidelines amended, as appropriate, based on market researchequity awards will be increased to 39,000 options for our Board Chair and advice from its compensation consultant.26,000 options for our other non-executive directors. The table below shows the compensation paid to our non-executive directors during the year ended December 31, 2021.2022. Mr. Goldsmith, Mr. Nath and Dr. Malievskaia did not receive compensation for service on the Board and the compensation paid to Mr. Goldsmith, Mr. Nash and Dr. Malievskaia as employees of the Company are set forth under the heading “Named Executive Officer Compensation—Summary Compensation Table” below. As a U.K.-incorporated company, we have received shareholder approval at our AGM in 20212022 for our U.K. statutory directors’ remuneration report, which includes a directors’ remuneration policy for our executive and non-executive directors.
| | | | | | | | | | | | | | | | | | | | | Fees | | | | | | | | | | | Earned or | | | | | | | | | | | Paid in | | | Option | | | | | | | | Cash | | | Awards | | | | | Total | | Name | | ($) | | | ($) (1) (2) | | | | | ($) | Jason Camm (3) | | — | | | — | | | | | — | Annalisa Jenkins (4) | | 66,032 | | | 213,201 | | | | | 279,233 | | Thomas Lönngren | | 49,535 | | | 213,201 | | | | | 262,736 | | Linda McGoldrick | | 62,077 | | | 213,201 | | | | | 275,278 | | Robert McQuade | | 60,529 | | | 213,201 | | | | | 273,731 | David Norton (4) | | 62,249 | | | 213,201 | | | | | 275,450 | Wayne Riley (5) | | 38,531 | | | 513,823 | | | | | 552,354 | Florian Brand (6) | | 13,119 | | | 99,374 | | | | | 112,493 |
| | | | | | | | | | | | | | | | | Fees | | | | | | | Earned or | | | | | | | Paid in | | Option | | | | | Cash | | Awards | | Total | | Name | | ($) | | ($) (1) (2) | | ($) | | David Norton (4) | | 60,620 | | 112,479 | | 173,099 | | Jason Camm (3) | | — | | — | | — | | Annalisa Jenkins (4) | | 59,382 | | 112,479 | | 171,861 | | Thomas Lönngren | | 45,692 | | 112,479 | | 158,171 | | Robert McQuade | | 54,434 | | 112,479 | | 166,913 | | Linda McGoldrick | | 56,290 | | 112,479 | | 168,769 | | Wayne Riley(5) | | 46,393 | | 140,599 | | 186,992 |
(1) The amount reported represents the aggregate grant date fair value of share options awarded to our non-employee directors during the 20212022 fiscal year, calculated in accordance with FASB, ASC Topic 718. Such grant date fair value does not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value of the share option reported in this column are set forth in Note 11 in our annual report on Form 10-K filed with the SEC on February 24, 2022.28, 2023. The amount reported in this column reflects the accounting cost for these share option awards and does not correspond to the actual economic value that may be received by the directors upon the exercise of the share options or any sale of the shares. (2) At December 31, 2021,2022, the Directors owned the following number of outstanding and unexercised share options: Annalisa Jenkins (132,474)(149,475), Thomas Lönngren (72,095)(89,095), Linda McGoldrick (33,584)(50,584) Robert McQuade (33,584)(50,584), David Norton (147,404),(164,404) and Wayne Riley (24,000) and Florian Brand (5,396)(45,250). Jason Camm had no options outstanding and unexercised on December 31, 2021.2022. (3) On February 1, 2021, Mr. Camm permanently waived any and all compensation which he was entitled to receive during the year ended December 31, 2021.2022. Mr. Camm's service on the board ended on June 16, 2022, the date of the 2022 AGM. (4) At December 31, 2021,2022, Annalisa Jenkins held 16,32110,386 unvested restricted share units, or RSUs, and David Norton held 16,32110,386 unvested RSUs. At December 31, 20212022 no other Non-Executive Director held RSUs. (5) WayneMr. Riley was appointed as Director, effectivejoined the Board in March 2021 and received his initial equity award. As he did not receive an annual equity award at our 2021 AGM, his 2022 annual equity award included an additional number of shares covering the three- month period from March 31, 2021.2022 until June 2022 . (6) On May 14, 2021, Florian Brand resigned from his position as a director.
EXECUTIVE OFFICERS OF THE COMPANY Below is a list of our executive officers and their positions and ages as of the date of April 19, 2022.4, 2023. George Goldsmith and Ekaterina Malievskaia are married and serve on our Board. There is no arrangement or understanding between any executive officer and any other person pursuant to which the executive officer was selected. | | | | | | | | | | | | | | | | | Name | | Age | | Position | George GoldsmithKabir Nath | | 6658 | | Chief Executive Officer, Chair of our BoardDirector | | Michael Falvey | | 6364 | | Chief Financial Officer | | Guy Goodwin | | 7475 | | Chief Medical Officer | | Ekaterina Malievskaia | | 5556 | | Chief Innovation Officer, Director | | Matthew Owens | | 4445 | | General Counsel and Chief Legal Officer |
For biographical information regarding Mr. GoldsmithNath and Dr. Malievskaia, see the section titled “Board of Directors and Corporate Governance.” Michael Falvey has served as our Chief Financial Officer since January 2022. Mr. Falvey was the Chief Financial Officer of Karyopharm Therapeutics between September 2017 and January 2019. Prior to Karyopharm Therapeutics, Mr. Falvey served as Chief Financial Officer at several other high-growth companies including Seven Bridges Genomics from August 2016 to June 2017 and Analysis Group from July 2010 to April 2016. Prior to joining Analysis Group, Mr. Falvey served as Chief Financial Officer of Ahura Scientific and Aspect Medical Systems, and as Vice-President, Finance, at Millennium Pharmaceuticals Inc. In addition to his healthcare experience, Mr. Falvey held financial management positions with Fidelity Investments, Digital Equipment Corporation and General Electric. Mr. Falvey earned a Master of Science in Management from the Sloan School of Management at the Massachusetts Institute of Technology and a Bachelor of Science from Georgetown University’s School of Foreign Service. Guy Goodwin has served as our Chief Medical Officer since August 2021. Dr. Goodwin currently serves as Emeritus Professor of Psychiatry at The University of Oxford, where he has been a professor of psychiatry since October 1996. Additionally, Dr. Goodwin served as Medical Director at P1vital, where he worked between April 2018 and July 2021. Dr. Goodwin previously served as WA Handley Chair of Psychiatry and Head of the University of Oxford’s Department of Psychiatry. Dr. Goodwin is a Fellow of the American College of Neuropsychopharmacology, and former President of the British Association for Psychopharmacology and of the European College of Neuropsychopharmacology. Dr. Goodwin received his BA, DPhil, BM, and BCh from the University of Oxford. Matthew Owens has served as our General Counsel and Chief Legal Officer since February 2022. Prior to joining the Company, Mr. Owens served as Global Head Legal, Digital at Novartis International AG, beginning in January 2018. He has served in various positions with Novartis since 2010, also serving as Senior Legal Counsel, and as Head Legal, Strategic Partnerships and Digital. Prior to Novartis, he was Senior Counsel at Solvay Pharmaceuticals, and Corporate Counsel at Mettler-Toledo. He holds a Bachelor of Arts (Pre-Law & Political Science, History & Criminology) from Capital University, Columbus, Ohio, and a Juris Doctorate from Capital University Law School where he was a Presidential Scholar. He ispreviously was a lecturer at the University of Zurich Law School’s Europa Institute.
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS This Executive Compensation Discussion and Analysis (“CD&A”)section describes our executive compensation program and the 20212022 compensation awarded to, earned by, or paid to each individual who served as our principal executive officer for the year ended December 31, 2022, or fiscal year 2022, and our next two most highly compensated executive officers in respect of their service to our company for fiscal year 2022. We refer to these individuals as our named executive officers (“NEOs”).officers. This CD&AExecutive Compensation section should be read with the compensation tables and related disclosures for our NEOs.named executive officers. Our NEOsnamed executive officers for 2021*2022 were as follows: •George Goldsmith, our Chairman and former Chief Executive Officer; •Guy Goodwin,Kabir Nath, our Chief MedicalExecutive Officer (joined August 2021);and a Director; •Ekaterina Malievskaia, our Chief Innovation Officer; •Piers Morgan, our former Chief Financial Officer;Information Officer and a Director; and
•Nate Poulsen,Matthew Owens, our former General Counsel & Chief Legal Officer.Officer and General Counsel. *Nate Poulsen ceased to be an executive officer in October 2021 and left the organization in December 2021. Piers Morgan ceased to be an executive officer upon his departure on December 31, 2021.
This CD&AExecutive Compensation section describes the material elements of our executive compensation program during 2021.2022. It also provides an overview of our executive compensation philosophy and objectives. Finally, it discusses how the Compensation and Leadership Development Committee of our Board of Directors arrived at the specific compensation decisions for our executive officers, including our NEOs,named executive officers, for 2021,2022, including the key factors that our Compensation and Leadership Development Committee considered in determining their compensation. EXECUTIVE SUMMARY Business Overview We are a clinical-stage, mental health care company dedicated to accelerating patient access to evidence-based innovation in mental health. Our initial focus is on treatment-resistant depression, or TRD, a subset of major depressive disorder, or MDD, comprising patients who are inadequately served by the current treatment paradigm. In 2021, we completed a2022, the results from our large-scale randomized, controlled, double-blind Phase IIb2b clinical trial of our COMP360 psilocybin therapy in 233 patients suffering with TRD in 22 sites in 10 countries in North America and Europe. This is the largest psilocybin trial completed to date. We completed our IPO in September 2020. From that time through December 31, 2021, we were a “foreign private issuer” within the meaning of the Exchange Act, and an “emerging growth company” as definedpublished in the Jumpstart Our Business Startups Act New England Journal of 2012, as amended. Effective January 1, 2022, we no longer meet those designations andMedicine. We commenced our Phase 3 clinical program in TRD, consisting of two pivotal trials, which are instead subject to the reporting and other requirements applicable to U.S. domestic issuers and “large accelerated filers” as defined in Rule 12b-2 of the Exchange Act. As a U.S. domestic issuer and large accelerated filer, we have increased U.S. disclosure obligations regarding executive compensation and are required to file for the first timePhase 3 trials of a proxy statement pursuant to Section 14(a) of Exchange Act, including this CD&A, and hold for the first time a non-binding advisory vote on executive compensation.psilocybin agent.
Corporate Performance Highlights We have made substantial progress during 2021,2022, including: Positive results from ground-breaking phase IIb clinical trial ofAdvanced COMP360 psilocybin therapy for TRD, despite the ongoing challenges posed by the COVID-19 pandemic:TRD:
•Positive results from ground-breaking phase IIbPhase 2b clinical trial in TRD were published in the New England Journal of Medicine •Additional data showing patient improvements beyond reduction of depression symptoms •Positive results from open-label study of 25mg COMP360 psilocybin therapy as adjunct to SSRI antidepressants in treatment-resistant depression
•End-of-phase IIHeld end-of-phase 2 meeting scheduled with the U.S. Food and Drug Administration for late April
•Transitioned to a Phase III3 company and launched a Phase 3 program expected to begin in second halfTRD - the first ever Phase 3 program of 2022psilocybin, a unique achievement
Additional COMP360 development programs: •Launched a Phase II trial2 program in post-traumatic stress disorder launched at Kings College Londonanorexia nervosa, an area of critical unmet need with no FDA-approved pharmaceutical treatments available and high mortality rate for patients suffering from anorexia nervosa •Positive results reported from two investigator-led clinical initiatives in severe TRD, anorexia nervosa, bipolar 2 and major depressive disorder one of which has been published in The New England Journal of Medicine •Additional investigator-initiated studies ongoing in multiple indications Significantly strengthened our balance sheet through:Pipeline development:
•CompletedProgressed development of our artificial intelligence model and authored an article titled Psilocybin Therapy for Treatment Resistant Depression: Prediction of Clinical Outcome by Natural Language Processing, which we have shared openly and submitted to a follow-on offering of American Depositary Shares, raising $154.8m Pipeline development:
•Development of new product candidates through exclusive research project with Dr. Matthias Grill of MiHKAL GmbH, complementing work being done at COMPASS's Discovery Center
Commercial exclusivity and intellectual property:
•10 granted patents issued to-date covering composition, formulation, and method of usejournal for publication
•Several additional filings completedOngoing research on prodrug development has led to a number of potential candidate leads being identified that we plan to continue through further research based development Prepare for successful and scalable commercial launch of COMP360 to ensure broad patient access: •Progress towards issuance by the American Medical Association of new CPT III codes, which are a type of reimbursement code assigned to emerging technologies, services and procedures, to facilitate reimbursement for the psychological support that we anticipate would accompany administration of COMP360, if regulatory approval is obtained •Pioneering collaboration with King’s College London and South London and Maudsley NHS Foundation Trust to create The Center for Mental Health Research and Innovation in the U.K.
•Launched retrospective real world evidence studies
OVERVIEW OF EXECUTIVE COMPENSATION PROGRAM Executive Compensation Philosophy Our executive compensation program is guided by our overarching philosophy of paying for performance. Consistent with this philosophy, we have designed our executive compensation program with the following principles in mind: | | | | | | | | | | | | | | • | | Attract, retain, and motivate high caliber executive talent and focus them on the delivery of the Company’s strategic and business objectives; | | • | | Be competitive against appropriate market benchmarks and have a strong link to performance, providing the ability to earn above-market rewards for strong performance; | | • | | Be simple and understandable, both internally and externally; | | • | | Encourage increased equity ownership to motivate executives in the overall interests of shareholders, the Company, employees and customers; and | | • | | Take due account of good governance and promote the long-term success of the Company. |
Executive Compensation Program Design Our executive compensation program is designed to be reasonable and competitive, and balance our goal of attracting, motivating, rewarding and retaining top-performing senior executives with our goal of aligning their interests with those of our shareholders. The Compensation and Leadership Development Committee annually evaluates our executive compensation program to ensure that it is consistent with our short-term and long-term goals and market competitive practices. Our executive compensation program consists of a mix of compensation elements that balance achievement of our short-term goals with our long-term performance. We provide short-term incentive compensation opportunities in the form of annual cash bonuses, which focus on our achievement of annual goals. We also provide long-term incentive compensation opportunities in the form of equity awards. We provide a combination of share options with an exercise price equal to fair market value, or "market-priced" options and full-value awards which have historically primarily been in(in the form of restricted share units for U.S. taxpayers and options with an exercise price equal to the nominal value of a share, or nominal cost options for non-U.S. taxpayers) and which focus executive attention on our long-term performance. We believe that market-priced share options provide a strong reward for growth in the market price of our shares because their entire value depends on future share price appreciation. In connectionWe believe that restricted share units and nominal cost options are important elements of a competitive compensation program from a retention perspective, as the companies with our IPO in 2020,whom we grantedcompete for talent typically offer a combination of share options to our executive team, which were intended to serve as our long-term equity compensation throughout the duration of 2021. As such, we did not issue any additional equity awards to ongoing executives in 2021 and our 2022 awards will serve as the first regular cycle of annual equity grants as a publicly traded company. We did, however, offer a sign-on option award to our newly appointed Chief Medical Officer in the year.
Our executive compensation program is also designed to incorporate sound practices for compensation governance. Below we summarize such practices.
What We Do: | | | | | | | | | | | ✓ | Maintain an Independent Compensation and Leadership Development Committee. The Compensation and Leadership Development Committee consists solely of independent directors. |
| | | | | | | | | | | ✓ | Retain an Independent Compensation Advisor. The Compensation and Leadership Development Committee engages its own compensation advisor to provide information and analysis related to annual executive compensation decisions, including the 20212022 executive compensation decisions, and other advice on executive compensation independent of management. |
| | | | | | | | | | | ✓ | Review Executive Compensation Annually. The Compensation and Leadership Development Committee annually reviews our compensation strategy, including a review and determination of our compensation peer group used for comparative purposes. |
| | | | | | | | | | | ✓ | Design Compensation At-Risk. Our executive compensation program is designed so that a significant portion of our executive officers’ compensation is “at risk” based on our corporate performance, as well as equity-based, to align the interests of our executive officers and shareholders. |
| | | | | | | | | | | ✓ | Use a Pay-for-Performance Philosophy. The majority of ourOur executive officers’ compensation is directly linked to corporate performanceachievement of company goals and includes a significant long-term equity component, thereby making a substantial portion of each executive officer’s total compensation dependent upon our share price. |
What We Don’t Do: | | | | | | | | | | | ✗ | No Executive Retirement Plans. We do not offer pension arrangements or retirement plans or arrangements to our executive officers that are different from or in addition to those offered to our other employees. |
| | | | | | | | | | ✗ | Limited Perquisites. We provide limited perquisites and other personal benefits to our executive officers.
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| | | | | | | | | | ✗ | No Special Health and Welfare Benefits. Our executive officers participate in our health and welfare benefits programs on the same basis as our other employees.
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| | | | | | | | | | | ✗ | No Post-Employment Tax Payment Reimbursement. We do not provide any tax reimbursement payments (including “gross-ups”) on any change-in-control or severance payments or benefits. |
| | | | | | | | | | ✗ | No Hedging or Pledging. Our Insider Trading Policy prohibits our executive officers, the non-employee members of our Board and certain designated employees from hedging or pledging our securities, or engaging in short sales or trading in standardized options related to our securities. |
“Say-on-Pay” Vote on Executive Compensation In prior years,Annually, at our general meeting of shareholders, we were both a “foreign private issuer” and an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended; therefore, we were not required to hold a non-binding advisory vote on the compensation of our NEOs (a “Say-on-Pay” vote). At this AGM, we will hold our first Say-on-Pay vote. Our Board of Directors and Compensation Committee will consider the result of the Say-on-Pay vote, and the related vote on the frequency of whichregarding the compensation of our named executive officers, is submittedwhich we refer to as say-on-pay. The Compensation and Leadership Development Committee has considered and will continue to consider the outcome of such say-on-pay votes, including the percentage of votes cast in favor and against the say-on-pay proposal, when making future compensation decisions for our named executive officers. The Compensation and Leadership Development Committee also relies on advice from its compensation consultants, its evaluation of Company performance against pre-defined corporate goals, its understanding of the challenges facing the Company and its observations of executive officer performance to determine executive officer compensation.
At our 2022 AGM, the non-binding advisory vote of shareholders supported the compensation of the named executive officers identified in our 2022 proxy statement by 99.7% of the votes cast at the meeting. These votes for a vote (a “and against the say-on-pay proposal, together with available feedback from investors, have been and will continue to be considered by the Compensation and Leadership Development Committee Say-on-Frequency” vote), when making compensation decisions for our executive officers in the future because we value the opinions.
As a U.K.-incorporated company, we have received shareholder approval at our AGM in 2021 for our U.K. statutory directors’ remuneration report,Directors’ Remuneration Policy which includes a directors’ remuneration policy forapplies to our executive and non-executive directors. This binding policy is in effect for three years and covers allowable compensation for twoour current and future executive and non-executive directors. Our Directors' Remuneration Policy applies to three of our NEOs,named executive officers, Mr. Goldsmith, our CEO,current Chairperson and former Chief Executive Officer, Mr. Nath, our current Chief Executive Officer, and Dr. Malievskaia our CIO, bothChief Innovation Officer, each of whom were executive directors of the Company
during 20212022 and will continue to serve on our Board of Directors for 2022. In 2021,2023, subject to re-election of Mr. Goldsmith and Mr. Nath at this annual general meeting of shareholders. In 2022, Mr. Goldsmith, Mr. Nath and Dr. Malievskaia did not receive compensation for their service on our Board. Among other things, our directors’ remuneration policyDirectors’ Remuneration Policy sets a cap on the annual bonus payable to an executive director at 125% of the target bonus level and limits the pension contribution or cash supplement payable by the Company to 3% of salary for the U.K.-based executive directors, in line with the wider workforce.workforce, which generally has a 3% pension contribution, but may be up to 8%. Mr. Nath joined us in 2022 and is eligible to participate in our 401(K) retirement plan on the same terms as our U.S. based employees, including the company match of up to 4% of salary, subject to statutory limitations on contributions. Governance of Executive Compensation Program Role of the Compensation and Leadership Development Committee and the Board of Directors Our Compensation and Leadership Development Committee, which is comprised entirely of independent directors, is responsible for discharging our Board of Directors’Board’s responsibilities relating to compensation of our directors and executives, overseeing our overall compensation structure, policies and programs, and reviewing our processes and procedures for the consideration and determination of director and executive compensation. The Compensation and Leadership Development Committee’s approach to remuneration matters is to enable the Company to attract and retain talent, incentivize long-term value generation, and effectively manage the Company’s cash resources. It is the belief of the Compensation and Leadership Development Committee that this is best achieved through a greater emphasis on variable rather than fixed remuneration, comprised of a mix of base salary and benefits, along with the flexibility to appropriately reward and incentivize with variable pay and long-term incentives. Our Compensation and Leadership Development Committee has the authority to retain, at our expense, one or more third-party compensation consultants to assist the Compensation and Leadership Development Committee in performing its responsibilities. At the beginning of the year, the Compensation and Leadership Development Committee reviews and recommends, in the case of our Executive Chair and our Chief Executive Officer, and approves, in the case of our other named executive officers, the primary elements of compensation—base salary increases, cash bonus targets, and annual equity awards—for our NEOs,awards, as authorized by the Board of Directors pursuant to the Compensation and Leadership Development Committee charter. In addition, the Compensation and Leadership Development Committee may deem it advisable to review and approve subsequent compensation opportunities for our executive officers, including our NEOs.named executive officers. Compensation-Setting Factors When reviewing and approving the amount of each compensation element and the target total compensation opportunity for our executive officers, the Compensation and Leadership Development Committee considers the following factors: the Company’s performance during the year, based on business and corporate goals and priorities established by the Chief Executive Officer (“CEO”) and the Board of Directors; each executive officer’s skills, experience and qualifications relative to other similarly-situated executives at the companies in our compensation peer group; the scope of each executive officer’s role compared to other similarly-situated executives at the companies in our compensation peer group; the performance of each individual executive officer, based on an assessment of their contributions to our overall performance, ability to lead their department and work as part of a team, all of which reflect our values;
compensation parity among our executive officers; the dilutive impact of equity awards;
general economic and market conditions and rate of inflation; changes in the size and complexity of the Company as we transitioned to a Phase 3 clinical development company and prepare to transition from a clinical-stage company to a fully integrated biotechnology company in anticipation of our first product launch; the expectations of institutional shareholders and any specific feedback received from shareholders; the recommendations provided by the CEOChief Executive Officer with respect to the compensation of our executive officers, other executive officers.than our Executive Chair and our Chief Executive Officer. These factors provide the framework for compensation decisions for each of our executive officers, including our NEOs.named executive officers. The Compensation and Leadership Development Committee and the Board, of Directors, as applicable, do not assign relative weights or rankings to these factors, and do not consider any single factor as determinative in the compensation of our executive officers. Rather, the Compensation and Leadership Development Committee and the Board, of Directors, as applicable, rely on their own knowledge and judgment in assessing these factors and making compensation decisions. Our CEO doesDuring the time Mr. Goldsmith served as our Executive Chair and Chief Executive Officer, he did not make recommendations to our Compensation and Leadership Development Committee or participate in the Compensation and Leadership Development Committee’s deliberations
concerning his own compensation nor the compensation of Dr. Malievskaia, our CIO,Chief Innovative Officer, because of their spousal relationship. Our Chief Executive Officer, Mr. Nath does not participate in the Compensation and Leadership Development Committee's deliberations concerning his own compensation. Role of Management In discharging its responsibilities, the Compensation and Leadership Development Committee works with management, including our CEO.Chief Executive Officer. Our management assists the Compensation and Leadership Development Committee by providing information on corporate and individual performance, market compensation data and management’s perspective on compensation matters. In addition, at the beginning of each year, our CEOChief Executive Officer reviews the performance of our other executive officers, including our other NEOs (other than our CIO, as discussed above),named executive officers based on our achievement of our corporate goals and each executive officer’s overall performance during that year. The Compensation and Leadership Development Committee solicits and reviews our CEO’sChief Executive Officer’s recommendations for base salary increases, annual cash bonuses, annual equity awards and any other compensation opportunities for our other executive officers, including our other NEOs (other than our CIO),named executive officers, and considers our CEO’sChief Executive Officer’s recommendations in determining such compensation. As discussed above, while Mr. Goldsmith served as our Chief Executive Officer during 2022, he did not review the performance of our Chief Innovation Officer nor recommend any base salary increases, annual cash bonuses, annual equity awards and any other compensation opportunities for our Chief Innovation Officer. Role of Compensation Consultant The Compensation and Leadership Development Committee engages an external compensation consultant to assist it by providing information, analysis and other advice relating to our executive compensation program. For 2021,2022, the Compensation and Leadership Development Committee engaged Aon as its independent compensation consultant to advise on executive compensation matters including: review and analysis of the compensation for our executive officers, including our NEOs;named executive officers; research, development and review of our compensation peer group; and support on other compensation matters as requested throughout the year.
Aon reports directly to the Compensation and Leadership Development Committee and to the Compensation and Leadership Development Committee chair. Aon also coordinates with our management for data collection and job matching for our executive officers. The Compensation and Leadership Development Committee reviewed its relationship with Aon and considered Aon’s independence in light of all relevant factors, including those set forth in the Exchange Act and in applicable Nasdaq listing rules. The Compensation and Leadership Development Committee concluded that the work performed by Aon and Aon’s senior advisors involved in the engagements did not raise any conflict of interest. In reaching these conclusions, our Compensation and Leadership Development Committee considered the factors set forth in the SEC rules and the applicable Nasdaq rules. Role of Market Data For purposes of comparing our executive compensation against the competitive market, the Compensation and Leadership Development Committee reviews and considers the compensation levels and practices of a group of peer companies. This compensation peer group consists of public biotechnology companies that are similar to us in terms of market capitalization, stage of development and number of employees. As a Nasdaq-listed health care company with operations in the United StatesU.S. and Europe, we operate within a global marketplace for talent. Given that the market for experienced health care executive talent is competitive, particularly in the United States,U.S., the Compensation and Leadership Development Committee references the U.S. market as the leading indicator for remuneration levels and practices. The Committee also considers the general U.K. compensation frameworks when making decisions on executive compensation. The Compensation and Leadership Development Committee reviews our compensation peer group annually and makes adjustments to our peer group if necessary, taking into account changes in both our business and our peer companies’ businesses. The Compensation and Leadership Development Committee also uses market data—from our compensation peer group and from a life sciences cut of the Radford Global Compensation Database—as one factor in evaluating whether the compensation for our executive officers is competitive in the market. The Compensation and Leadership Development Committee and the Board, of Directors, as applicable, also rely on their own knowledge and judgment in evaluating market data and making compensation decisions. To determine the composition of the peer group for 2021, which was established in connection with2022, the IPO in July 2020, the Compensation and Leadership Development Committee considered the following criteria: publicly-traded companies listed in the United States (including both U.S.-headquartered and European-headquartered companies), with a preference towards companies with a recent IPO (i.e., within the past five years); companies in the pre-commercial biotechnology or health care technology sectors, with preference towards mental health care and healthcare technology platform companies, as appropriate;
similar market capitalization—within a range of approximately 0.33x to approximately 3.0x our anticipated market capitalization at IPO;in mid-2021; the stage of development of each company’s development candidates;candidates, with a focus on companies with Phase 2 clinical programs (our stage of development in mid-2021); and similar headcount—within a range of 2530 to 250300 employees based on our then headcount of roughly 5090 full-time employees. This analysis led to the selection of the following peer group which was used to make the relevant compensation assessments for 20212022 for purposes of establishing 20212022 annual base salary, and target bonus and equity awards for our NEOs. We alsonamed executive officers and used thethis peer group market data to determine at-IPO equity awards we made tosupport our NEOs in 2020, which served asnegotiations with our long-term incentive compensation for 2021.new executive officers, our Chief Executive Officer and our Chief Legal Officer and General Counsel, who were hired during 2022. 20212022 Compensation Peer Group
| | | | | | | | | | | | | | | AC Immune SA | CareDx, Inc. | Orchard Therapeutics plc | | Adaptimmune Therapeutics plc | Constellation Pharmaceuticals, Inc. | Prothena Corporation plc | | Applied Molecular Transport | Crinetics Pharmaceuticals, Inc. | PureTech Health | | Arcus Biosciences, Inc. | Intra-Cellular Therapies, Inc. | Replimmune Group, Inc. | | ATAI Life Sciences SA | Karuna Therapeutics, Inc. | Rocket Pharmaceuticals, Inc. | | Autolus Therapeutics plc CareDx, Inc.
Constellation Pharmaceuticals, Inc.
Crinetics Pharmaceuticals, Inc.
| | Fulgent Genetics, Inc.
Livongo Health, Inc.
Magenta Therapeutics, Inc. Merus N.V.
Myovant Sciences Ltd.
NantHealth, Inc.
NextCure, Inc.
| | Orchard Therapeutics plc
Replimmune Group
Rocket Pharmaceuticals, Inc.
Scholar Rock Holding Corporation Syros Pharmaceuticals,
| | Axsome Therapeutics, Inc. | Merus N.V. | Translate Bio, Inc. | | Bicycle Therapeutics plc | Myovant Sciences Ltd. | Y-mAbs Therapeutics, Inc; | Fulcrum Therapeutics, Inc. | | | | |
PRIMARY ELEMENTS OF EXECUTIVE COMPENSATION PROGRAM The primary elements of our executive compensation program are:base salary; short-term incentive compensation in the form of annual cash bonuses; and long-term incentive compensation in the form of annual equity awards. Our executive officers, including our NEOs,named executive officers, are also eligible to participate in our standard employee benefit plans, such as our health and welfare benefits plans, and defined contribution retirement plans on the same basis as our other employees.employees in the U.S. or U.K., as applicable. In addition, as described below, our executive officers, including our NEOs,named executive officers, are entitled to certain change-in-control severance payments and benefits pursuant to their employment agreements, described herein. Base Salary We pay base salaries to our executive officers, including our NEOs,named executive officers, to provide a market competitive fixed remuneration that reflects the responsibilities of the role undertaken, the experience of the individual, and their performance in the role over time. At the time of hire, base salaries are determined for our executive officers, including our NEOs,named executive officers, based on the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above. With the exception of 2021 (as described below), typically,Typically, at the beginning of each year, the Compensation and Leadership Development Committee reviews base salaries for our executive officers, including our NEOs,named executive officers, based on such factors to determine if an increase is appropriate. In addition, base salaries may be adjusted in the event of a promotion or significant change in responsibilities. 20212022 Annual Base Salary
In September 2020, upon completion of our IPO,January 2022, the Compensation and Leadership Development Committee implemented market-basedbase salary adjustments to reflect our status as a newly-public company. As competitiveincreases of 2% for the named executive officers, who were employed at that time, after considering rising inflation rates. Each of Mr. Nath's and Mr. Owen's base salaries were implementeddetermined through negotiations when they were hired. | | | | | | | | | | | | Named Executive Officer (1) | 2021 Annual
Base Salary | 2022 Annual
Base Salary | Percentage
Increase | | Kabir Nath(2) | $— | $580,000 | N/A | | George Goldsmith (3) | $525,768 | $536,283 | 2.0% | | Matthew Owens(4) | $— | $371,130 | N/A | | Ekaterina Malievskaia | $371,130 | $378,553 | 2.0% |
(1) All amounts, except those for Mr. Nath, have been converted from GBP to USD using the 2022 average FX rate (£1:$1.2371). (2) Kabir Nath was appointed as our Chief Executive Officer effective August 1, 2022, with his base salary established at that time in the latterU.S. dollars. (3) In connection with his transition to Executive Chair effective August 1, 2022, Mr. Goldsmith's base salary was adjusted to £346,800 ($429,026). (4) Matthew Owens was appointed as our Chief Legal Officer and General Counsel effective February 1, 2022, with his
half of 2020 in connection with the IPO, the Compensation Committee did not approve any additional increases for 2021, with base salaries for the NEOs remaining at the same levels as were approved at IPO.
| | | | | | | | | | | | Named Executive Officer (1) | 2020 Post-
IPO Annual
Base Salary | 2021 Annual
Base Salary | Percentage
Increase | | George Goldsmith | $584,658 | $584,658 | 0.0% | | Piers Morgan | $440,213 | $440,213 | 0.0% | | Ekaterina Malievskaia | $412,700 | $412,700 | 0.0% | | Nate Poulsen | $370,000 | $370,000 | 0.0% | Guy Goodwin (2) | N/A | $446,335 | N/A |
(1) All amounts, except those for Mr. Poulsen, have been converted from GBP to USD using the 2021 average FX rate (£1:$1.3757).
(2) Guy Goodwin was appointed as our Chief Medical Officer in July 2021, with an August 2021 start date, and his base salary was established at that time.
The actual base salaries paid to our NEOsnamed executive officers in 20212022 are set forth in the “Summary Compensation Table” below. Short-Term Incentive Compensation Annual Cash Bonuses We provide short-term incentive compensation opportunities to our executive officers, including our NEOs,named executive officers, in the form of annual cash bonuses to incentivize and award delivery of the Company’s strategy and corporate objectives on an annual basis. For 2021,2022, we focuseddetermined annual cash bonuses based on a review of our overall corporate performance to determine the cash incentives of our CEO and after discussion with management, other NEOs, with some discretion applied based on individual achievements in the year. Going forward, for 2022, we will incorporate a distinct individual performance assessment for each of the NEOs beyond the CEOnamed executive officers to recognize their individual and team objectives within their respective functional areas. Performance Goals At the beginning of each year, the Board of Directors discusses with the CEOChief Executive Officer the annual corporate performance objectives that are intended to be the most significant drivers of our short-term and long-term success. After the end of the relevant financial year, the Compensation and Leadership Development Committee assesses the results of the corporate goals, reviews management’s self-assessment, evaluates specific achievements that advanced the prior year’s corporate objectives, and determines our overall success in the prior year. The Compensation and Leadership Development Committee considers our CEO’sChief Executive Officer’s recommendations, and independently reviews and approves the total percentage achievement level for each of the other NEOs.named executive officers. Target Annual Bonuses At the time of hire, the target annual bonus is determined for each of our NEOs,named executive officers, and at the beginning of each year, the Compensation and Leadership Development Committee reviews and determines whether to change the target annual bonus for each such individual. The Compensation and Leadership Development Committee considers the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above, with an emphasis on market data from our compensation peer group for comparable positions. Target annual bonuses represent a specific percentage of annual base salary. At the time of our IPO, we adjusted our targets based on a review of peer public companies. Each year, we evaluate our target annual bonuses relative to our executive peer group and adjust the targets, as appropriate, to stay aligned with our compensation philosophy. The last undertaking of this analysis occurred around the time of our IPO in September 2020, whenIn January 2022, we adjusted Mr. Goldsmith’s target from 50%55% to 55%,60%. Dr. Malievskaia’s target from 40% toremained at 45%,. Each of Mr. Morgan’s target from 50% to 45%,Nath's and Mr. Poulsen’sOwen's target from 33% to 35%. We expect to undertake a further analysis this year.bonus for 2022 (60% and 40% of base salary, respectively) was established through negotiations when they were hired.
20212022 Annual Cash Bonuses
The 20212022 corporate goals and achievements are set forth below. The Compensation and Leadership Development Committee determines the range of our corporate performance from a threshold of 50% to a maximum of 125%. No bonus is paid to any executive officer unless 50% of the corporate goals are achieved. Corporate Goals and Achievements
Advance COMP360 for TRD: Prepare for a successful end-of-phase 2b meeting and a prompt launchTRD into Phase 3 trials – In November 2022, The New England Journal of phase 3 – Results ofMedicine, the world’s leading peer-reviewed medical journal, published the positive results from our Phase 2b study were delivered on timetrial of COMP360 psilocybin therapy for treatment resistant depression, or TRD. We transitioned to a Phase 3 company and as planned, despitelaunched a Phase 3 program in TRD, the uncertainties linked tofirst ever Phase 3 program of psilocybin, a unique achievement. We received Innovative Licensing and Access Pathway (ILAP) designation in the pandemic. We conducted a comprehensive regulatory engagement with the FDA and various European agencies, while ensuring operational readiness for Phase 3.U.K.
Build outAdvance Phase 2 trials of COMP360 for Anorexia Nervosa and PTSD – We launched our Phase 2 trial in anorexia nervosa, an area of critical unmet need with no FDA-approved pharmaceutical treatments available and high mortality rate for patients suffering from anorexia nervosa. We commenced patient recruitment in our Phase 2 trials in anorexia nervosa and PTSD.
Develop a portfoliopipeline of new indications for COMP360, new compoundsdrug and technologies thattechnology assets to increase the value of COMPASS while demonstrating commitment to transforming mental health – We have strengthened the potential to improve the safety, efficacy, and accessibilityintegration of our therapies – Clinical development programs for PTSDinternal and anorexia were initiated. We strengthened our drugexternal discovery capabilities throughand prioritized our Discovery Centercompound portfolio. We have identified potential prodrug lead candidates. We have continued development of our artificial intelligence model and other partnerships, successfully filing three PCT patents. In the areahave authored an article titled Psilocybin Therapy for Treatment Resistant Depression: Prediction of researching technologiesClinical Outcome by Natural Language Processing, which we have shared openly and submitted to improve safety, efficacya journal for publication. We deployed improved versions of our MyPathfinder app and efficiency, we developed a prototypeour Therapist COMPanion app, which are able to transcribe our patient session recordings, which is more cost efficient than externally available tools. We developed a secure and compliant centralised data storage repository and additional computational tools, including a proprietary web application allowing for confidential and secure recording reviews.support multiple clinical studies in different disease areas. Position COMPASS as a leading mental health care company, drive and fund future plansshape the narrative of mental health care transformation across all stakeholders and secure additional equity financing – We raised $165mconducted an intensive investor relations program and communications strategy, culminating in a secondary offeringour first Capital Markets Day event. However, conditions in the equity markets in the U.S. remain challenging, particularly in the biotechnology industry. We had cash and cash equivalents of American Depository Shares, above our target$143.2 million as of $140m, and have prepared for other fundraising opportunities.the end of 2022, which enable us to fund operations into 2024. COMP360 for TRD: Prepare for a successful and scalable commercial launch, should COMP360 receive regulatory approval, that will ensure access for as many patients as possible – We developed our commercial and patient access model at launch, including reimbursement codes, real world data and payer partnerships, services and a go-to-market model. We developed and tested the first version of a scalable therapist training platform, as well as a scalable patient support platform, in accordance with regulatory requirements. | | | | | | | | | | | | | • | | Develop a talented team and an organisation that makes rapid growth sustainable for employees – We strengthened talent hiring and people development capabilities and processes, including recruitment, onboarding, performance management, learning and development and equity, diversity and inclusion. We managed strong headcount growth, strengthened our People and IT capabilities, and maintained a score >85% on the engagement dimensions of our People survey.Develop a high-performing, mission-driven organization – We deployed our first career performance management system and developed our first management training curriculum. We managed strong headcount growth, growing by 59% during 2022, and maintained a very strong 39% net promoter score (according to Qualtrics XM Institute, a score of between 10 to 30% is good and a score of 30% or more is excellent). In 2022, we were certified a Most Loved Workplace by Best Practice Institute (BPI) and its Most Loved Workplaces® operation, which is a company that assesses and certifies a company as a workplace employees love based on internal surveys, external public ratings and interviews with corporate officials, ranking number 31 in the U.K.
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In January 2022,2023, the Compensation and Leadership Development Committee evaluated our achievement of the 20212022 corporate objectives. Based on our 20212022 results, the Compensation and Leadership Development Committee determined that we had not only achieved eachmost of our performancethe above corporate goals at target but had also achievedoverachieved certain stretch goals, in particular aroundelements related to developing technology assets under our above-described goal of "Develop a pipeline of new drug and technology assets to increase the continued developmentvalue of COMPASS while demonstrating commitment to transforming mental health" and commercial preparations for COMP360 for TRD and the extensionunderachieved our above-described goal of COMP360 to different indications.securing additional equity financing. Based on this assessment, the Compensation and Leadership Development Committee determined to fund the annual bonus pool at 110%100%, a percentage reached as a weighted average of scores against our corporate goals as applied to a maximum bonus of 125% and which reflected our above-target corporate performance.goals. The Compensation and Leadership Development Committee awarded bonuses at this funding level for the CEOChief Executive Officer and other NEOs,named executive officers, after evaluating each person’s contributions in light of company goals, with adjustments to award sizes for named executive officers other than each of our Chief Executive Officers, based on corporate achievement in applicable function and individual performance in the year. While all of our NEOs met their targets, exceptional performance was rewarded with payouts above 110%.
The table below sets forth the 20212022 annual base salaries, target annual cash bonuses, and the 20212022 annual cash bonuses earned by our NEOs.named executive officers. | | | | | | | | | | | | | | | | | | | | Named Executive Officer (1) | 2021 Annual Base Salary | Target Annual Cash Bonus (% of Annual Base Salary) | 2021 Payout (% of Target) | 2021
Annual
Cash Bonus | | George Goldsmith | $584,658 | 55% | 100% | $321,562 | | Ekaterina Malievskaia | $412,700 | 45% | 125% | $231,800 | Guy Goodwin (2) | $167,716 | 35% | 110% | $64,572 | Piers Morgan (3) | $440,213 | 45% | N/A (4) | $137,567 | | Nate Poulsen | $370,000 | 35% | 104% | $134,472 |
| | | | | | | | | | | | | | | | | | | | Named Executive Officer (1) | 2022 Annual Base Salary | Target Annual Cash Bonus (% of Annual Base Salary) | 2022 Payout (% of Target) | 2022 Annual Cash Bonus | Kabir Nath(2) | $580,000 | 60% | 100% | $145,000 | George Goldsmith(3) | $491,337 | 60% | 100% | $294,964 | Matthew Owens(4) | $371,130 | 40% | 96% | $133,131 | | Ekaterina Malievskaia | $378,563 | 45% | 96% | $163,539 |
(1) All amounts, except those for Mr. Poulsen,Nath, have been converted from GBP to USD using the 20212022 average FX rate (£1:$1.3757)1.2371). (2) Mr. GoodwinNath was appointed as our Chief MedicalExecutive Officer in July 2021, with aneffective August 2021 start date,1, 2022, and his target bonus was calculated based on a pro-rated salary from his point of hire to year-end. (3) A discretionary 2021 bonus payment of £100,000 ($137,567) was made to Mr. Morgan in connection with his continued fulfillment of his functionGoldsmith served as Chief FinancialExecutive Officer until the endAugust 1, 2022 and as Executive Chair between August 1, and December 31, 2022. His target bonus was calculated based on a pro-rated salary for each of 2021.these roles during 2022. (4) Mr. Morgan ceasedOwens was appointed as our Chief Legal Officer and General Counsel effective February 1, 2022 and his target bonus was calculated based on a pro-rated salary from his point of hire to be an employee of the Company on December 31, 2021 and was not entitled to his annual bonus.year-end.
Long-Term Incentive Compensation Long-term incentive compensation in the form of equity incentives aligns the interests of our executive officers, including our NEOs,named executive officers, with long-term shareholder interests and allows us to attract, incentivize, and retain staff in a competitive market. As a form of compensation, share-based incentives also enable us to more effectively manage the Company’s cash resources. In connection with the IPO, we adopted the COMPASS Pathways plc 2020 Share Option and Incentive Plan (the “2020 Plan”). The 2020 Plan allows for the grant of options, restricted share awards, restricted share unit awards (“RSUs”), other share or cash-based awards and dividend equivalent awards to employees, non-employee directors and consultants. At the time of hire, equity awards are granted to our executive officers, including our NEOs,named executive officers, based on the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above. WithMr. Nath and Mr. Owens joined us during 2022 and their equity awards were negotiated during the exceptionhiring process. The below table reflects the new hire grants negotiated with each of 2021 (as discussed above), typically,Mr. Nath and Mr. Owens.
| | | | | | | | | | | | | Named Executive Officer | New Hire Option Award | New Hire Restricted Share Unit Award | | Kabir Nath | 600,000 | 50,000 | | Matthew Owens | 100,000 | 12,400 |
Typically, at the beginning of each year, the Compensation and Leadership Development Committee determines the size and relative weighting of the annual equity awards for our executive officers, including our NEOs,named executive officers, it deems reasonable and appropriate based on such factors. The size and relative weighting is the same for each of our executive officers, including our NEOs,named executive officers, who are at the same level. In addition, the Compensation and Leadership Development Committee may deem it advisable to grant subsequent equity awards to our executive officers, including our NEOs,named executive officers, and may adjust their equity awards in the event of a promotion or significant change in responsibilities. As the Company made share option grants to executive officers, including our NEOs, at the time of IPO in September 2020 under the 2020 Plan, no additional equity grants were issued to Named Executive Officers during 2021, barring our Chief Medical Officer, who received a sign-on equity grant of 100,000 options that vest 25% on the one-year anniversary of the grant date and over 36 equal installments over the subsequent 36 months, subject to his continued service. With the help of our compensation consultant, we determine whether to grant additional equity awards, the mix of RSUs and options and the amount of equity awards to give to our executive officers based on benchmarking the position of each executive officer against the compensation paid to people in similar positions in our peer group.
In February 2022, the Compensation and Leadership Development Committee approved the following annual equity grants to our named executive officers employed at that time. | | | | | | | | | | | | | Named Executive Officer | Annual Option Award | Annual Restricted Share Unit Award | | George Goldsmith | 173,000 | 29,000 | | Ekaterina Malievskaia | 75,000 | 13,000 |
Employment Arrangements with our Named Executive Officers In connection with our IPO, the Compensation and Leadership Development Committee reviewed the employment agreements with our executive officers, including our NEOs,Mr. Goldsmith and Dr. Malievskaia, with a focus on public market practices and severance arrangements in the event of involuntary termination not in connection with a change in control and involuntary termination or good reason termination in connection with a change in control, and determined to revise the terms of employment agreements with our executive officers in line with prevailing market practice for our peer companies and prevailing practices in the NEO’snamed executive officer's jurisdiction of employment, providing similar terms to executives hired since the IPO.IPO, such as Mr. Nath and Mr. Owens. We engage our NEOsnamed executive officers using standard terms as set out in our executive employment agreements. These agreements set forth the
individual’s base salary and bonus target based on a percentage of annual base salary and entitle the executive officer to participate in our equity incentive plans, with the amount of such equity participation to be determined at the Compensation and Leadership Development Committee’s sole discretion, and other employee benefits generally available to our employees. If an executive officer is based outside the U.K., additional benefits and assistance with relocation may be provided which reflect local market norms or legislation. The agreements also prohibit our NEOsnamed executive officers from engaging directly or indirectly in competition with us, recruiting or soliciting our employees, diverting our customers to a competitor, or disclosing our confidential information or business practices. Our post-employment compensation arrangements set forth in the employment agreements are designed to provide reasonable compensation to executive officers who leave the Company under certain circumstances to facilitate their transition to new employment. Further, we seek to mitigate any potential employer liability and avoid future disputes or litigation by requiring a departing executive officer to sign a separation and release agreement acceptable to us as a condition to receiving post-employment compensation payments or benefits. Mr. Poulsen received severance payments consistent with the terms of his employment agreement in connection with his departure from the Company on December 31, 2021. Our Compensation and Leadership Development Committee and the Board of Directors do not consider specific amounts payable under these post-employment compensation arrangements when establishing annual compensation. It does believe, however, that these arrangements are necessary to offer compensation packages that are competitive. For more information on the service and employment agreements with our NEOsnamed executive officers and post-employment compensation arrangements, see the discussion under the headings “Employment Agreements, Change of Control and Severance Arrangements with Named Executive Officers” and “Potential Payments upon Termination or Change in Control” later in this Proxy Statement. Other Elements of Compensation Retirement Plans We currently maintain a 401(k) retirement savings plan for our U.S.-based employees, including any U.S.-based NEOs,named executive officers, who satisfy certain eligibility requirements. The U.S. Internal Revenue Code (the “Code”) allows eligible employees to defer a portion of their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k) plan. We currently contribute a 4% safe harbor match on employee contributions up to the statutory limit. We also maintain a defined contribution plan for U.K. employees, including any U.K.-based NEOs,named executive officers, who satisfy certain eligibility requirements. All employees who participate in the plan receive aan employer contribution, which is generally 3% contribution. Mr. Morgan received ancontribution and in some cases may be up to 8% contribution in line with the terms of his employment agreement. 2020 Share Option and Incentive Plan
In September 2020, we adopted the 2020 Plan. The 2020 Plan allows the Compensation Committee to make equity-based and cash-based incentive awards to our officers, employees, directors and other key persons (including consultants). The 2020 Plan is more fully described below, see “Grants of Plan Based Awards for Fiscal Year 2021.”
The 2020 Plan permits the granting of both options to purchase ordinary shares intended to qualify as incentive share options under Section 422 of the Code, and options that do not so qualify. The option exercise price of each option will be determined by our Compensation Committee but may not be less than 100% of the fair market value of our ordinary shares on the date of grant. The term of each option will be fixed by our Compensation Committee and may not exceed ten years from the date of grant. Our Compensation Committee development committee will determine at what time or times each option may be exercised.
Our Compensation Committee may award share appreciation rights subject to such conditions and restrictions as it may determine. Share appreciation rights entitle the recipient to ordinary shares, or cash, equal to the value of the appreciation in our share price over the exercise price. The exercise price of each share appreciation right may not be less than 100% of the fair market value of the ordinary shares on the date of grant.
Other Compensation Policies and Practices Policy Prohibiting Hedging and Pledging Our Insider Trading Policy prohibits our executive officers, the non-employee members of our Board of Directors and certain designated employees who in the course of the performance of their duties have access to material, non-public information regarding the Company from engaging in the following transactions: selling any of our securities that they do not own at the time of the sale (a “short sale”); buying or selling puts, calls, other derivative securities of the Company or any derivative securities that provide the economic equivalent of ownership of any of our securities or an opportunity, direct or indirect, to profit from any change in the value of our securities or engaging in any other hedging transaction with respect to our securities at any time; using our securities as collateral in a margin account; and pledging our securities as collateral for a loan (or modifying an existing pledge) unless the pledge has been approved by the Audit and Risk Committee of the Board of Directors. Tax and Accounting Considerations Taxation of “Parachute” Payments Sections 280G and 4999 of the U.S. Code provide that executive officers and directors who hold significant equity interests and certain other service providers may be subject to significant additional taxes if they receive payments or benefits in connection with a change in control of the company that exceeds certain prescribed limits, and that the company (or a successor) may forfeit a deduction on the amounts subject to this additional tax. We have not agreed to provide any executive officer, including any NEO,named executive officer, with a “gross-up” or other reimbursement payment for any tax liability that the executive officer might owe as a result of the application of Sections 280G or 4999 of the U.S. Code. Risk Assessment
Our Compensation Committee annually assesses our compensation plans, policies and practices for NEOs and other employees, including whether the policies and practices are reasonably likely to have a material adverse effect on us. We believe that the mix and design of our executive compensation plans and policies do not encourage management to assume excessive risks and are not reasonably likely to have a material adverse effect on us for the following reasons: we offer an appropriate balance of short and long-term incentives and fixed and variable amounts; our variable compensation provides enhanced incentives for executives to outperform and strong disincentives for executives to underperform against our Company goals and is based on a balanced mix of Company performance criteria; and the Board and compensation committee have the authority to adjust variable compensation as appropriate.
COMPENSATION & LEADERSHIP DEVELOPMENT COMMITTEE REPORT
The Compensation and Leadership Development Committee of our Board has reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K and contained in this proxy statement. Based on this review and discussion, the Compensation Committee has recommended to our Board that the Compensation Discussion and Analysis be included in this proxy statement.
The COMPASS Pathways plc Compensation and Leadership Development Committee
Annalisa Jenkins (Chair)
Jason Camm
David Norton
Wayne Riley
The information contained in this Compensation and Leadership Development Committee report shall not be deemed to be “soliciting material,” “filed” with the SEC, subject to Regulations 14A or 14C of the Exchange Act, or subject to the liabilities of Section 18 of the Exchange Act. No portion of this Compensation and Leadership Development Committee report shall be deemed to be incorporated by reference into any filing under the Securities Act, or the Exchange Act, through any general statement incorporating by reference in its entirety the proxy statement in which this report appears, except to the extent that we specifically incorporate this report or a portion of it by reference. In addition, this Compensation and Leadership Development Committee report shall not be deemed filed under either the Securities Act or the Exchange Act.
NAMED EXECUTIVE OFFICER COMPENSATION
SUMMARY COMPENSATION TABLE The following table provides information regardingshows the total compensation for services rendered in all capacities that was earnedpaid or accrued during the last two fiscal year indicated.years ended December 31, 2022 and 2021 to each individual who served as our principal executive officer during fiscal 2022 and our two next most highly compensated executive officers were serving as executive officers as of December 31, 2022. These individuals are our named executive officers. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Non-Equity | | | | | | | | | | | | | | | Incentive | | | | | | | | | | | | | | Option | Plan | | All Other | | | | | | | Salary | | Bonus | | | Awards | Compensation | | Compensation | | Total | Name and Principal Position (1) | | Year | | ($) | | ($) | | | ($) (2) | ($) | | ($) | | ($) | | George Goldsmith | | 2021 | | 584,658 | | | | | — | 321,562 | | 37,304 (3) | | 943,523 | | Chief Executive Officer | | 2020 | | 453,936 | | | | | 1,707,007 | 234,743 | | 34,113 | | 2,429,800 | | | 2019 | | 346,782 | | | | | — | — | | 28,752 | | 375,534 | Piers Morgan (4) | | 2021 | | 440,213 | | 137,567 (5) | | | 123,260 (6) | | | 35,217 (7) | | 736,256 | | Former Chief Financial Officer | | 2020 | | 262,523 | | | | | 1,377,094 | 149,207 | | 19,643 | | 1,808,467 | Guy Goodwin (8) | | 2021 | | 167,719 | | | | | 1,817,184 | 64,572 | | — | | 2,049,475 | | Chief Medical Officer | | — | | — | | | | | — | — | | — | | — | | Ekaterina Malievskaia | | 2021 | | 412,700 | | | | | — | 231,800 | | 24,635 (3) | | 669,134 | | Chief Innovation Officer | | 2020 | | 362,287 | | | | | 1,401,736 | 150,403 | | 23,708 | | 1,938,134 | | | 2019 | | 306,659 | | | | | — | — | | 21,027 | | 327,686 | Nate Poulsen (9) | | 2021 | | 370,000 | | | | | — | 134,472 | | 900,748 (10) | | 1,405,220 | | Former GC and Chief Legal Officer | | 2020 | | 370,000 | | | | | 722,133 | 107,250 | | 2,000 | | 1,201,383 | | 2019 | | 325,000 | | | | | 330,664 | — | | — | | 655,664 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Stock | | Option | | | | All Other | | | | | | | Salary | | Bonus | | Awards | | Awards | | | | Compensation | | Total | | Name and Principal Position(1) | | Year | | ($) | | ($) (2) | | ($) (3) | | ($) (3) | | | | ($) | | ($) | | Kabir Nath (4) | | 2022 | | 243,123 | | 145,000 | | 754,668 | | 6,422,963 | | | | 77,822 (5) | | 7,643,576 | | Chief Executive Officer | | 2021 | | — | | — | | — | | — | | | | — | | — | | George Goldsmith (6) | | 2022 | | 491,337 | | 294,964 | | 418,629 | | 1,732,031 | | | | 40,070 (7) | | 2,977,030 | | Former Chief Executive Officer | | 2021 | | 584,658 | | 321,562 | | — | | — | | | | 37,304 (7) | | 943,524 | | Matthew Owens(8) | | 2022 | | 339,619 | | 133,131 | | 179,000 | | 1,004,560 | | | | 155,879 (9) | | 1,812,188 | | General Counsel and Chief Legal Officer | | 2021 | | — | | — | | — | | — | | | | — | | — | | Ekaterina Malievskaia | | 2022 | | 378,563 | | 163,549 | | 187,661 | | 750,880 | | | | 25,802 (10) | | 1,506,456 | | Chief Innovation Officer | | 2021 | | 412,700 | | 231,800 | | — | | — | | | | 24,635 (10) | | 669,135 |
(1) All 2022 amounts, except those for Mr. Poulsen,Nath, have been converted from GBP to USD using the 2022 average FX rate (£1:$1.2371). All 2021 amounts have been converted from GBP to USD using the 2021 average FX rate (£1:$1.3757). (2) The amounts reported in this column represent bonuses paid to each named executive officer based on the Compensation and Leadership Development Committee’s determination of performance against 2022 goals in its discretion. (3) The amount reported in the Stock Awards and Option Awards column represents the aggregate grant date fair value of time-based RSUs and time-based share options granted to each of the NEOsnamed executive officers in the applicable year, calculated in
accordance with the provisions of FASB ASC Topic 718. The assumptions we used in calculating these amounts are included in Note 10 of our audited consolidated financial statements for the year ended December 31, 20212022 included in our Annual Report on Form 10-K, filed with the SEC on February 24, 2022.28, 2023. The amounts reported in the Summary Compensation Table for these time-based option awardsRSUs and options may not represent the amounts that the NEOsnamed executive officers will actually realize from the awards. Whether, and to what extent, a NEOnamed executive officer realizes value will depend on our actual operating performance, share price fluctuations and the NEO’snamed executive officer’s continued employment. (3)(4) Effective August 1, 2022, Mr. Nath was appointed as our Chief Executive Officer and a member of our Board. The amount reported for salary represents the amount earned following his commencement of employment, and the amount of his annual bonus was prorated to reflect his partial year of employment.
(5) All other compensation received byfor Mr. Nath consists of (i) housing allowance of £60,000 ($74,228), (ii) 401(k) company contributions of $1,794 and (iii) health savings account contributions of $1,800. (6) Effective August 1, 2022, Mr. Goldsmith transitioned to the role of Executive Chair, a position he held until December 31, 2022. The amount reported for salary represents the amount earned in his role as Chief Executive Officer until August 1, 2022 and Dr. Malievskaia relates tothe amount earned in his role as Executive Chair between August 1, 2022 and December 31, 2022. (7) All other compensation for Mr. Goldsmith consists of health insurance premiums paid under a separate policy than what is applicable to all other employees. (4) On December 31, 2021,(8) Effective February 1, 2022, Mr. Morgan’s resignation from the position ofOwens was appointed as our Chief FinancialLegal Officer became effective.
(5)A discretionary 2021 bonus payment of $137,567 was made to Mr. Morgan in connection with his continued fulfillment of his function as Chief Financial Officer until the end of 2021.
(6) As part of Mr. Morgan’s separation agreement with the Company, there were two modifications in relation to his previously granted options. This amount represented the additional charges the Company recognized as part of these modifications calculated in accordance with FASB ASC Topic 718.
(7) All other compensation received by Mr. Morgan relates to Company pension contributions of 8%.
(8) Dr. Goodwin joined us in July 2021 (with an August 2021 start date).and General Counsel. The amount reported for salary represents the amount earningearned following his commencement of employment, and the amount of his non-equity incentive compensationannual bonus was prorated to reflect his partial year of employment.
(9) On December 31, 2021,All other compensation for Mr. Poulsen employment termination with the Company became effective.Owens consists of (i) housing allowance of £110,000 ($136,085) and (ii) employer pension contributions of £16,000 ($19,794). (10) This amount represents the severance equalAll other compensation for Dr Malievskaia consists of health insurance premiums paid under a separate policy than what is applicable to nine months of his base salary ($277,500) plus an additional $615,000 paid to Mr. Poulsen upon termination of employment consistent with the terms of his employment agreement entered into in September 2020. This amount also includes $8,248 in 401(k) matching contributions by the Company.
GRANTS OF PLAN BASED AWARDS FOR FISCAL YEAR 2021
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | All Other | | | | Grant Date | | | | | Estimated Future Payouts | | Option Awards: | | | | Fair Value | | | | | Under Non-Equity Incentive | | Number of | | Exercise or | | Of Stock | | | | | Plan Awards (1) | | Securities | | Base Price of | | and Option | | | | | Threshold | | Target | | Maximum | | Underlying Options (3) | | Option Awards | | Awards (4) | | Name | | Grant Date | | ($) | | ($) | | ($) (2) | | (#) | | ($/Sh) | | ($) | George Goldsmith (5) | | — | | 160,781 | | 321,562 | | 401,952 | | — | | — | | — | Piers Morgan (5) | | — | | 99,048 | | 198,096 | | 247,620 | | — | | — | | — | Guy Goodwin (5) | | 8/16/2021 | | — | | — | | — | | 100,000 | | 30.27 | | 1,817,184 | | | — | | 29,351 | | 58,702 | | 73,377 | | — | | — | | — | Ekaterina Malievskaia (5) | | — | | 92,857 | | 185,715 | | 232,144 | | — | | — | | — | | Nate Poulsen | | — | | 64,750 | | 129,500 | | 161,875 | | — | | — | | — |
(1) The amounts shown reflect the target annual cash bonus for our NEOs, which are disclosed in the “2021 Annual Cash Bonuses” section of the above “Compensation Discussion and Analysis.” The actual amounts paid for 2021 are disclosed in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.
(2) The non-equity incentive plan award maximum can be modified by an individual performance modifier up to 125%.
(3) The amounts shown represent time-based share options granted pursuant to our 2020 Plan.
(4) The amount reported represents the aggregate grant date fair value of share options awarded to our NEOs during 2021, calculated in accordance with FASB, ASC Topic 718. Such grant date fair value does not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value of the share option reported in this column are set forth in Note 11 in our Annual Report on Form 10-K. The amount reported in this column reflects the accounting cost for these share option awards and does not correspond to the actual economic value that may be received by the NEOs upon the exercise of the share options or any sale of the shares.
(5)All amounts, except those for Mr. Poulsen, have been converted from GBP to USD using the 2021 average FX rate (£1:$1.3757).
2020 Share Option and Incentive Plan
In September 2020, we adopted the 2020 Plan. The 2020 Plan allows the Compensation Committee to make equity-based and cash-based incentive awards to our officers, employees, directors and other key persons (including consultants).
We have initially reserved 2,074,325 ordinary shares (the “Initial Limit”) for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by four percent of the outstanding number of ordinary shares on the immediately preceding December 31, or such lesser number of shares as determined by ourCompensation Committee (the “Annual Increase”). This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. The ordinary shares underlying any awards that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by us prior to vesting, satisfied without any issuance of shares, expire or are otherwise terminated (other than by exercise) under the 2020 Plan will be added back to the ordinary shares available for issuance under the 2020 Plan.
The maximum aggregate number of shares that may be issued in the form of incentive share options shall not exceed the Initial Limit cumulatively increased on January 1, 2022 and on each January 1 thereafter by the lesser of the Annual Increase for such year or 2,074,325 ordinary shares.
The 2020 Plan is administered by our Compensation Committee. Our Compensation Committee has full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants, and to determine the specific terms and conditions of each award, subject to the provisions of the 2020 Plan. Persons eligible to participate in the 2020 Plan will be those full or part-time officers, employees, non-employee directors and other key persons (including consultants) as selected from time to time by our Compensation Committee in its discretion.
The 2020 Plan permits the granting of both options to purchase ordinary shares intended to qualify as incentive share options under Section 422 of the Code, and options that do not so qualify. The option exercise price of each option will be determined by our Compensation Committee but may not be less than 100% of the fair market value of our ordinary shares on the date of grant. The term of each option will be fixed by our Compensation Committee and may not exceed 10 years from the date of grant. Our Compensation Committee will determine at what time or times each option may be exercised.
Our Compensation Committee may award share appreciation rights subject to such conditions and restrictions as it may determine. Share appreciation rights entitle the recipient to ordinary shares, or cash, equal to the value of the appreciation in our share price over the exercise price. The exercise price of each share appreciation right may not be less than 100% of the fair market value of the ordinary shares on the date of grant.
Our Compensation Committee may award restricted shares and restricted share units to participants subject to such conditions and restrictions as it may determine. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with us through a specified vesting period. Our Compensation Committee may also grant ordinary shares that are free from any restrictions under the 2020 Plan. Unrestricted shares may be granted to participants in recognition of past services or other valid consideration and may be issued in lieu of cash compensation due to such participant. Our Compensation Committee may grant cash bonuses under the 2020 Plan to participants, subject to the achievement of certain performance goals.
The 2020 Plan provides that in the case of, and subject to, the consummation of a “sale event” as defined in the 2020 Plan, all outstanding awards may be assumed, substituted or otherwise continued by the successor entity. To the extent that the successor entity does not assume, substitute or otherwise continue such awards, then (i) all share options and share appreciation rights will automatically become fully exercisable and the restrictions and conditions on all other awards with time-based conditions will automatically be deemed waived, and awards with conditions and restrictions relating to the attainment of performance goals may become vested and non-forfeitable in connection with a sale event in the Compensation Committee’s discretion and (ii) upon the effectiveness of the sale event, the 2020 Plan and all awards will automatically terminate. In the event of such termination, (i) individuals holding options and share appreciation rights will be permitted to exercise such options and share appreciation rights (to the extent exercisable) prior to the sale event, or (ii) we may make or provide for a cash payment to participants holding options and share appreciation rights equal to the difference between the per share cash consideration payable to shareholders in the sale event and the exercise price of the options or share appreciation rights (to the extent then exercisable).
Our Board of Directors may amend or discontinue the 2020 Plan and our Compensation Committee may amend the exercise price of options and amend or cancel outstanding awards for purposes of satisfying changes in law or any other lawful purpose but no such action may adversely affect rights under an award without the holder’s consent. Certain amendments to the 2020 Plan require the approval of our shareholders. No awards may be granted under the 2020 Plan after the date that is ten years from the date of shareholder approval.
OUTSTANDING EQUITY AWARDS AT 2021 FISCAL YEAR-END
The following table summarizes the options and restricted share units that we granted to our executive officers pursuant to the terms of our equity program established in our 2017 Equity Incentive Plan (the “2017 Plan”) and the 2020 Plan and were outstanding as of December 31, 2021:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | | | | | | | | | | | | | | | | | | | | | | | | | Market | | | | | | | | | | | Number of | | Value of | | | Number of Securities | | | | | | Shares or | | Shares or | | | Underlying Unexercised | | Option | | | | Units That | | Units That | | | Options | | Exercise | | Option | | Have Not | | Have Not | | | Exercisable | | Unexercisable | | Price | | Expiration | | Vested | | Vested | | Name | | (#) | | (#) | | ($) | | Date | | (#) | | ($) (1) | George Goldsmith (2) | | 35,500 | | 78,100 | | 17.00 | | 9/18/2030 | | | | | | (3) | | | | | | | | | | 30,739 | | 679,332 | Piers Morgan (4) | | 73,280 | | — | | 4.72 | | 3/30/2030 | | | | | | (5) | | 27,990 | | — | | 0.01 | | 6/30/2030 | | | | | | (6) | | 28,000 | | — | | 17.00 | | 9/18/2030 | | | | | Guy Goodwin (7) | | — | | 100,000 | | 30.27 | | 8/15/2031 | | | | | Ekaterina Malievskaia (8) | | 26,625 | | 58,575 | | 17.00 | | 9/18/2030 | | | | | | (9) | | | | | | | | | | 30,739 | | 679,332 | Nate Poulsen (10) | | 111,178 | | — | | 1.37 | | 7/20/2029 | | | | | | (11) | | 30,466 | | — | | 2.32 | | 3/30/2030 | | | | | | (12) | | 12,247 | | — | | 17.00 | | 9/18/2030 | | | | |
(1) Market value has been computed in accordance with SEC rules as the number of unvested shares or units multiplied by the closing price per share of our ADSs on The Nasdaq Global Select Market as of 12/31/2021 ($22.10).
(2) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is September 18, 2020. This grant was made under the 2020 Plan.
(3) The restricted share units are subject to 25% vesting upon the earlier of (i) the one year anniversary of the date of grant, or (ii) the first day following the six-month anniversary of the listing of the Company’s ordinary shares on any stock exchange on which the closing price of the shares is 20% higher than the listing price for at least five consecutive trading days. They vest quarterly thereafter over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is August 12, 2020. This grant was made under the 2017 Plan.
(4) Nominal options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is March 23, 2020. This grant was made under the 2017 Plan.
(5) Nominal options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is 30 June 2020. This grant was made under the 2017 Plan.
(6) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is September 18, 2020. This grant was made under the 2020 Plan.
(7) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is August 16, 2021. This grant was made under the 2020 Plan.
(8) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is September 18, 2020. This grant was made under the 2020 Plan.
(9) The restricted share units are subject to 25% vesting upon the earlier of (i) the one year anniversary of the date of grant, or (ii) the first day following the six-month anniversary of the listing of the Company’s ordinary shares on any stock exchange on which the closing price of the shares is 20% higher than the listing price for at least five consecutive trading days. They vest quarterly thereafter for three years, subject to continued service through each applicable vesting date. The vesting commencement date is August 12, 2020. This grant was made under the 2017 Plan.
(10) Nominal options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is June 5, 2019. This grant was made under the 2017 Plan.
(11) Nominal options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is June 5, 2019. This grant was made under the 2017 Plan.
(12) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is September 18, 2020. This grant was made under the 2020 Plan.
OPTION EXERCISES AND STOCK VESTED IN FISCAL YEAR 2021
The following table sets forth the number of shares acquired and the value realized upon exercises of share options and vesting of RSUs during the fiscal year ended December 31, 2021 by each of our NEOs.
| | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | | | | | | | | | | | Number of Shares | | Value Realized | | Number of Shares | | Value Realized | | | Acquired on Exercise | | on Exercise | | Acquired on Vesting | | on Vesting | | Name | | (#) | | ($) (1) | | (#) | | ($) (2) | | George Goldsmith | | — | | — | | 13,971 | | 463,891 | | Piers Morgan | | 94,229 | | 1,690,293 | | — | | — | | Guy Goodwin | | — | | — | | — | | — | | Ekaterina Malievskaia | | — | | — | | 13,971 | | 463,891 | | Nate Poulsen | | 92,195 | | 2,867,112 | | 12,570 | | 417,374 |
(1) The value realized upon the exercise of share options is calculated by (a) subtracting the share option exercise price from the market price on the date of exercise to get the realized value per share, and (b) multiplying the realized value per share by the number of shares underlying the share options exercised.
(2) The value realized upon vesting of RSUs is calculated by multiplying the number of shares of RSUs vested by the market price on the vest date.employees.
EMPLOYMENT AGREEMENTS, CHANGE OF CONTROL AND SEVERANCE ARRANGEMENTS WITH NAMED EXECUTIVE OFFICERS George Goldsmith GeneralCEO Terms. In September 2020, we entered into an employment agreement with Mr. Goldsmith in connection with his continued employment as our Chief Executive Officer. This agreement was amended effective August 1, 2022 in connection with Mr. Goldsmith's transition to Executive Chair to, among other things, adjust his salary and eliminate the notice and payment upon termination provisions in his employment agreement.
Mr. Goldsmith’s employment agreement providesprovided for an initial base salary of £425,000 ($584,658)525,768), which is subject to annual review and redetermination. This salary was increased to £433,500 ($596,351)536,283), effective January 1, 2022. In addition, Mr. Goldsmith iswas entitled to participate in our executive variable cash compensation program. In his employment agreement, Mr. Goldsmith is eligible to earn an annual incentive bonus, with a target bonus amount of 55% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances) as determined by our Board of Directors in its discretion. Mr. Goldsmith iswas only entitled to payment of a bonus payment if he is in the Company’s employment and not under notice, given or received, on the date that the bonus is paid and iswas not eligible for a bonus payment if he iswas subject to any disciplinary action or investigation at the date any bonus is being considered or paid. Mr. Goldsmith iswas also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time. Executive Chair Terms. In connection with his appointment as Executive Chair, Mr. Goldsmith's employment agreement was amended. Pursuant to the terms of the amended employment agreement, Mr. Goldsmith served as Executive Chairman until December 31, 2022, at which time his employment ended, without the need for notice by either party. Between August 1, 2022 and December 31, 2022, Mr. Goldsmith was entitled to an annual base salary of £346,800 (approximately $414,200). He was eligible to receive an annual incentive bonus for the year ending December 31, 2022, with a target bonus amount of 60% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances), notwithstanding the termination of his employment prior to the date of the bonus payment, provided, however, that such bonus amount was pro-rated to reflect his reduced salary for the period from August 1, 2022 to December 31, 2022. During this time, Mr. Goldsmith received no additional compensation for his services as a director of the Company. Kabir Nath General Terms. Effective August 1, 2022, we entered into an employment agreement with Mr. Nath in connection with his appointment as our Chief Executive Officer. The Employment Agreement has an initial term through the earlier to occur of (i) the date Mr. Nath relocates to the United Kingdom or (ii) December 31, 2023. On or before
December 31, 2023, Mr. Nath will re-locate to the United Kingdom and will enter into a new agreement on substantially similar terms to his current employment agreement and those of our other U.K.-based executives. Mr. Nath's employment agreement provides for an annual base salary of $580,000 (upon Mr. Nath's relocation to the United Kingdom, such salary will be paid in pound sterling (“GBP”) and be equal to the greater of (i) £431,000 GBP or (ii) the GBP equivalent of $580,000 U.S. dollars calculated at the then-prevailing exchange rate), which is subject to annual review and redetermination. Pursuant to his employment agreement, Mr. Nath is eligible to earn an annual incentive bonus, with a target bonus amount of 60% of his then-current annual base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances) as determined by our Board in its discretion. In addition, Mr. Nath will receive (i) a housing stipend of £12,000 per month through August 2023; (ii) a one-time reimbursement payment of up to $5,000 for attorneys’ fees; and (iii) a one-time cash payment of $250,000 when Mr. Nath relocates to the United Kingdom. Mr. Nath will receive no additional compensation for his services as a director of the Company. Mr. Nath is also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time. Payments Upon Termination. Either party may terminate the employment agreement upon ninety (90) days’ written notice. The Company may terminate the Employment Agreement at any time for “cause” (as such term is defined in the employment agreement). Mr. Nath may terminate the Employment Agreement upon thirty (30) days’ written notice for “good reason” (as such term is defined in the Employment Agreement), subject to Company’s right to cure the deficiency. In the event we terminate Mr. Nath’s employment without “cause” or Mr. Nath terminates his employment for “good reason”, Mr. Nath is entitled to a cash severance payment equal to one year’s annual salary plus the target annual bonus amount for the year in which such termination occurs. Matthew Owens General Terms. Effective February 1, 2022, we entered into an employment agreement with Mr. Owens in connection with his appointment as our Chief Legal Officer and General Counsel. Mr. Owens’ employment agreement provides for an initial base salary of £300,000 ($371,130), which is subject to annual review and redetermination. In addition, Mr. Owens is entitled to participate in our executive variable cash compensation program. Pursuant to his employment agreement, Mr. Owens is eligible to earn an annual incentive bonus, with a target bonus amount of 40% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances). To assist with his relocation to the U.K., we agreed to pay a cash contribution towards housing costs of £10,000 ($12,371) per month through August 2023 and to provide tax advisory services in connection with the preparation and filing of tax returns for the first two tax years of his employment. Mr. Owens is also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time. His employment agreement also provides for a pension contribution equivalent to 8% of his monthly base salary. Payments upon Termination.The Company may, in its discretion, terminate Mr. Goldsmith’sOwens' employment at any time with immediate effect by providing notice to Mr. GoldsmithOwens that it is exercising its right and will make a a payment in lieu of notice (“PILON”). Such PILON is equal to the base salary which Mr. GoldsmithOwens would be entitled to receive during the notice period of nine months less deductions required by law and will be paid within 28 days. Mr. Goldsmith is subject to immediate termination and is not entitled to any further payment, including any PILON which the Company is entitled to recover if payment was already made, other than amounts accrued as of the
termination date in the event he is terminated for certain reasons for cause, including gross misconduct, serious breach of his employment agreement, gross negligence or incompetence and certain other requirements, as set forth in his employment agreement. In the event Mr. Goldsmith is terminated for any reason, under most circumstances, the Company is required to reimburse him for any unused holiday entitlements.
Following service of notice to terminate the employment by either party, which is required to be given with not less than nine months’ prior written notice, the Company may place Mr. Goldsmith on garden leave for the whole or part of the remainder of his employment. Under garden leave, Mr. Goldsmith would receive his base salary for the period, but would not be entitled to receive any bonus or other incentive in respect of the period of garden leave.
If Mr. Goldsmith is terminated other than for misconduct, lack of capability or poor performance, or if Mr. Goldsmith terminates employment in response to a fundamental breach of contract by the Company within 12 months following a change of control of the Company (as defined in the employment agreement), subject to certain conditions, Mr. Goldsmith is entitled to (a) 18 months’ base salary, (b) the pro rata bonus Mr. Goldsmith would have received for the year in which his employment is terminated had he not been dismissed, but not including any pro rata bonus for a notice period which is not worked and (c) an amount equivalent to the cost to the Company of providing Mr. Goldsmith with his other employment benefits for 18 months.
Piers Morgan
General Terms. In September 2020, we entered into an employment agreement with Mr. Morgan in connection with his continued employment as our Chief Financial Officer.
Mr. Morgan’s employment agreement provided for an initial base salary of £320,000 ($440,224), which is subject to annual review and redetermination. In addition, Mr. Morgan was entitled to participate in our executive variable cash compensation program. Mr. Morgan was eligible to earn an annual incentive bonus, with a target bonus amount of 45% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances).A discretionary 2021 bonus payment of £100,000 ($137,570) was awarded to Mr. Morgan in connection with the continued fulfillment of his function as Chief Financial Officer until December 31, 2021. Mr. Morgan was also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time.
Settlement Agreement. On July 29, 2021, we entered into a settlement agreement with Mr. Morgan, which provided, among other things, that Mr. Morgan would receive (i) his salary up to his termination date of December 31, 2021, (ii) compensation for any outstanding holiday accrued and unused as of the termination date and (iii) his contractual benefits up to his termination date of December 31, 2021. Mr. Morgan did not receive any additional payments in connection with his voluntary termination with the Company.
As part of Mr. Morgan’s settlement agreement with the Company, there were two modifications in relation to his previously granted options regarding vesting condition accelerating some options to be vested by December 31, 2021 and expected terms changing from 90 days to 6 months after final employment date, which resulted in an additional charge of $123,260 for the Company under FASB ASC Topic 718.
Guy Goodwin
General Terms. In July 2021, we entered into an employment agreement with Dr. Goodwin in connection with his appointment as our Chief Medical Officer.
Dr. Goodwin’s employment agreement provides for a base salary of £324,450 ($446,346), which is subject to annual review and redetermination. In addition, Dr. Goodwin is entitled to participate in our executive variable cash compensation program. In his employment agreement, Dr. Goodwin is eligible to earn an annual incentive bonus, with a target bonus amount of 35% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances) as determined by our Board of Directors in its discretion. Dr. Goodwin is only entitled to payment of a bonus payment if he is in the Company’s employment on the date that the bonus is paid and is not eligible for a bonus payment if he is subject to any disciplinary action or investigation at the date any bonus is being considered or paid. Dr. Goodwin is also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time.
Payments upon Termination. The Company may, in its discretion, terminate Dr. Goodwin’s employment at any time with immediate effect by providing notice to Dr. Goodwin that it is exercising its right and will make a PILON. Such PILON is equal to the base salary which Dr. Goodwin would be entitled to receive during the notice period of three months less deductions required by law and will be paid within 28 days.
Dr. GoodwinOwens is subject to immediate termination and is not entitled to any further payment, including any PILON which the Company is entitled to recover if payment was already made, other than amounts accrued as of the termination date in the event he is terminated for certain reasons for cause, including gross misconduct, serious breach of hisher employment agreement, gross negligence or incompetence and certain other requirements, as set forth in hisher employment agreement. In the event Dr. GoodwinMr. Owens is terminated for any reason, under most circumstances, the Company is required to reimburse him for any unused holiday entitlements.
Following service of notice to terminate the employment by either party, which is required to be given with not less than threenine months’ prior written notice, the Company may place Dr. GoodwinMr. Owens on garden leave for the whole or part of the remainder of hisher employment. Under garden leave, Dr. GoodwinMr. Owens would receive his base salary for the period, but would not be entitled to receive any bonus or other incentive in respect of the period of garden leave. If Dr. GoodwinMr. Owens is terminated other than for misconduct, lack of capability or poor performance, or if Dr. GoodwinMr. Owens terminates employment in response to a fundamental breach of contract by the Company within 12 months following a change of control of the Company (as defined in the employment agreement), subject to certain conditions, Dr. GoodwinMr. Owens is entitled to (a) 12 months’ base salary, (b) the pro rata bonus Dr. GoodwinMr. Owens would have received for the year in which his employment is terminated had he not been dismissed, but not including any pro
rata bonus for a notice period which is not worked and (c) an amount equivalent to the cost to the Company of providing Dr. GoodwinMr. Owens with his other employment benefits for 12 months. Ekaterina Malievskaia General Terms. In September 2020, we entered into an employment agreement with Dr. Malievskaia in connection with her continued employment as our Chief Innovation Officer. Dr. Malievskaia’s employment agreement provides for an initial base salary of £300,000 ($412,710)371,130), which is subject to annual review and redetermination. This salary was increased to £306,000 ($420,964)378,563), effective January 1, 2022. In addition, Dr. Malievskaia is entitled to participate in our executive variable cash compensation program. In her employment agreement, Dr. Malievskaia is eligible to earn an annual incentive bonus, with a target bonus amount of 45% of her base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances). Dr. Malievskaia is also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time. Payments upon Termination. The Company may, in its discretion, terminate Dr. Malievskaia’s employment at any time with immediate effect by providing notice to Dr. Malievskaia that it is exercising its right and will make a PILON. Such PILON is equal to the base salary which Dr. Malievskaia would be entitled to receive during the notice period of nine months less deductions required by law and will be paid within 28 days. Dr. Malievskaia is subject to immediate termination and is not entitled to any further payment, including any PILON which the Company is entitled to recover if payment was already made, other than amounts accrued as of the termination date in the event he is terminated for certain reasons for cause, including gross misconduct, serious breach of her employment agreement, gross negligence or incompetence and certain other requirements, as set forth in her employment agreement. In the event Dr. Malievskaia is terminated for any reason, under most circumstances, the Company is required to reimburse him for any unused holiday entitlements. Following service of notice to terminate the employment by either party, which is required to be given with not less than nine months’ prior written notice, the Company may place Dr. Malievskaia on garden leave for the whole or part of the remainder of her employment. Under garden leave, Dr. Malievskaia would receive her base salary for the period, but would not be entitled to receive any bonus or other incentive in respect of the period of garden leave. If Dr. Malievskaia is terminated other than for misconduct, lack of capability or poor performance, or if Dr. Malievskaia terminates employment in response to a fundamental breach of contract by the Company within 12 months following a change of control of the Company (as defined in the employment agreement), subject to certain conditions, Dr. Malievskaia is entitled to (a) 12 months’ base salary, (b) the pro rata bonus Dr. Malievskaia would have received for the year in which his employment is terminated had she not been dismissed, but not including any pro rata bonus for a notice period which is not worked and (c) an amount equivalent to the cost to the Company of providing Dr. Malievskaia with her other employment benefits for 12 months.
2020 Share Option and Incentive Plan In September 2020, we adopted the 2020 Plan. The 2020 Plan allows the Compensation and Leadership Development Committee to make equity-based and cash-based incentive awards to our officers, employees, directors and other key persons (including consultants). We have initially reserved 2,074,325 ordinary shares (the “Initial Limit”) for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by four percent of the outstanding number of ordinary shares on the immediately preceding December 31, or such lesser number of shares as determined by ourCompensation and Leadership Development Committee (the “Annual Increase”). This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. The ordinary shares underlying any awards that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by us prior to vesting, satisfied without any issuance of shares, expire or are otherwise terminated (other than by exercise) under the 2020 Plan will be added back to the ordinary shares available for issuance under the 2020 Plan.
Nate PoulsenThe maximum aggregate number of shares that may be issued in the form of incentive share options shall not exceed the Initial Limit cumulatively increased on January 1, 2022 and on each January 1 thereafter by the lesser of the Annual Increase for such year or 2,074,325 ordinary shares.
General Terms. In SeptemberThe 2020 we entered into an employment agreement with Mr. Poulsen in connection with his continued employment asPlan is administered by our General CounselCompensation and Chief Legal Officer.
Mr. Poulsen’s employment agreement providedLeadership Development Committee. Our Compensation and Leadership Development Committee has full power to select, from among the individuals eligible for an initial base salaryawards, the individuals to whom awards will be granted, to make any combination of $370,000. In addition, Mr. Poulsen was entitledawards to participate in our executive variable cash compensation program. In his employment agreement, Mr. Poulsen was eligibleparticipants, and to earn an annual incentive bonus, with a target bonus amountdetermine the specific terms and conditions of 35%each award, subject to the provisions of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances). Mr. Poulsen was also2020 Plan. Persons eligible to participate in allthe 2020 Plan will be those full or part-time officers, employees, non-employee directors and other key persons (including consultants) as selected from time to time by our generally-available employee benefit plansCompensation and programs.Leadership Development Committee in its discretion.
Transition Agreement. On September 29, 2021, we entered into a transition agreement with Mr. Poulsen.UnderThe 2020 Plan permits the termsgranting of options to purchase ordinary shares intended to qualify as incentive share options under Section 422 of the transition agreement, Mr. Poulsen ceasedCode, options intended to servequalify as U.K. tax advantaged options under our company share option plan, or CSOP, which is a sub-plan under the General Counsel2020 Plan and Chief Legal Officeroptions that do not so qualify for any tax advantages. Other than the nominal cost options granted to non-U.S. tax persons in lieu of restricted share units, the option exercise price of each option will be determined by our Compensation and tookLeadership Development Committee but may not be less than 100% of the fair market value of our ordinary shares on the role of Chief Legal Officer, IP until his termination date. The transition agreement also provided, among other things, that Mr. Poulsen would receive (i) his salary up to his termination date of December 31, 2021, (ii) his contractual benefits up to his terminationgrant. The term of each option will be fixed by our Compensation and Leadership Development Committee and may not exceed ten years from the date of December 31, 2021,grant. Our Compensation and (iii)Leadership Development Committee development committee will determine at what time or times each option may be exercised.
Our Compensation and Leadership Development Committee may award share appreciation rights subject to such conditions and restrictions as it may determine. Share appreciation rights entitle the continued vestingrecipient to ordinary shares, or cash, equal to the value of his outstanding equity awards through his terminationthe appreciation in our share price over the exercise price. The exercise price of each share appreciation right may not be less than 100% of the fair market value of the ordinary shares on the date of December 31, 2021.grant. UnderOur Compensation and Leadership Development Committee may award restricted shares and restricted share units to participants subject to such conditions and restrictions as it may determine. These conditions and restrictions may include the termsachievement of hiscertain performance goals and/or continued employment agreementwith us through a specified vesting period. Our Compensation and transition agreement,Leadership Development Committee may also grant ordinary shares that are free from any restrictions under the 2020 Plan. Unrestricted shares may be granted to participants in recognition of past services or other valid consideration and may be issued in lieu of cash compensation due to such participant. Our Compensation and Leadership Development Committee may grant cash bonuses under the 2020 Plan to participants, subject to the achievement of certain performance goals.
The 2020 Plan provides that in the case of, and subject to, the consummation of a “sale event” as defined in the 2020 Plan, all outstanding awards may be assumed, substituted or otherwise continued by the successor entity. To the extent that the successor entity does not assume, substitute or otherwise continue such awards, then (i) all share options and share appreciation rights will automatically become fully exercisable and the restrictions and conditions on all other awards with time-based conditions will automatically be deemed waived, and awards with conditions and restrictions relating to the attainment of performance goals may become vested and non-forfeitable in connection with his departurea sale event in the Compensation and Leadership Development Committee’s discretion and (ii) upon the effectiveness of the sale event, the 2020 Plan and all awards will automatically terminate. In the event of such termination, (i) individuals holding options and share appreciation rights will be permitted to exercise such options and share appreciation rights (to the extent exercisable) prior to the sale event, or (ii) we may make or provide for a cash payment to participants holding options and share appreciation rights equal to the difference between the per share cash consideration payable to shareholders in the sale event and the exercise price of the options or share appreciation rights (to the extent then exercisable). Our Board may amend or discontinue the 2020 Plan and our Compensation and Leadership Development Committee may amend the exercise price of options and amend or cancel outstanding awards for purposes of satisfying changes in law or any other lawful purpose but no such action may adversely affect rights under an award without the holder’s consent. Certain amendments to the 2020 Plan require the approval of our shareholders. No awards may be granted under the 2020 Plan after the date that is ten years from employment with the Company and subject to certain other conditions, Mr. Poulsen was entitled to nine months of his base pay and an additional $615,000 as severance. Mr. Poulsen was also entitled to his earned base salary, any unused vacation time, unpaid expense reimbursements and any vested benefits through the termination date. Since Mr. Poulsen did not breach any of his continuing obligations through his termination date of December 31, 2021, he received $892,500 (an amount equal to nine months of his base salary plus an additional $615,000) as severance and $134,472 for his 2021 annual incentive compensation. Potential Payments upon Termination or Change in Control
The following table sets forth the estimated payments payable to our NEOs upon termination of employment under various circumstances. Payments and benefits are estimated assuming that the triggering event took place on December 31, 2021. There can be no assurance that a triggering event would produce the same or similar results as those estimated below if such event occurs on any other date or at any other price, of if any other assumption used to estimate potential payments and benefits is not correct. Due to the number of factors that affect the nature and amount of any potential payments or benefits, any actual payments and benefits may be different. GBP amounts have been converted to USD using the 2021 average FX rate (£1:$1.3757).shareholder approval.
| | | | | | | | | | | | | | | | | | | Name | Triggering Event (1) | Cash based on Base Salary ($)(2) | Pro Rated Annual Bonus ($) | Benefits ($)(3) | Accrued Vacation ($)(4) | | George Goldsmith | Notice of immediate termination by the Company without cause | 438,504 | — | — | 59,637 | | Notice by the Company or employee to termination and the employee is on garden leave | 438,504 | — | — | — | | Termination by the Company or by the employee in response to a fundamental breach of contract by the Company within 12 months following a Change in Control (5) | 877,009 | 321,570 | 55,956 | 59,637 | | Termination for cause | — | — | — | 58,637 | | Guy Goodwin | Notice of immediate termination by the Company without cause | 111,584 | — | — | 44,633 | | Notice by the Company or employee to terminate and the employee is on garden leave | 111,584 | — | — | — | | Termination by the Company or by the employee in response to a fundamental breach of contract by the Company within 12 months following a Change in Control(5) | 446,335 | 64,572 | — | 44,633 | | Termination for cause | — | — | — | 44,633 | | Ekaterina Malievskaia | Notice of immediate termination by the Company without cause | 309,525 | — | — | 41,270 | | Notice by the Company or employee to terminate and the employee is on garden leave | 309,525 | — | — | — | | Termination by the Company or by the employee in response to a fundamental breach of contract by the Company within 12 months following a Change in Control(5) | 412,700 | 231,800 | 24,635 | 41,270 | | Termination for cause | — | — | — | 41,270 |
(1) The vesting offollowing table sets forth information concerning the outstanding equity awards is only accelerated in the event of termination at the discretionheld by each of the administrator.named executive officers as of December 31, 2022:
(2) In | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | Stock Awards | | | | | | | | | | | Market | | | | | | | | | Number of | | Value of | | Number of Securities | | | | | Shares or | | Shares or | | Underlying Unexercised | | Option | | | Units That | | Units That | | Options | | Exercise | | Option | Have Not | | Have Not | | Exercisable | | Unexercisable | | Price | | Expiration | Vested | | Vested | | Name | (#) | | (#) | | ($) | | Date | (#) | | ($) (1) | | Kabir Nath (2) | — | | 600,000 | | 14.94 | | 7/31/2032 | | | | | (5) | | | | | | | | 50,000 | | 401,500 | | George Goldsmith (3) | 63,900 | | 49,700 | | 17.00 | | 9/18/2030 | | | | | (4) | 36,042 | | 136,958 | | 15.75 | | 1/31/2032 | | | | | (6) | | | | | | | | 19,561 | | 157,075 | | (7) | | | | | | | | 29,000 | | 232,870 | | Matthew Owens (8) | — | | 100,000 | | 15.75 | | 1/31/2032 | | | | | (9) | | | | | | | | 12,400 | | 99,572 | | Ekaterina Malievskaia (3) | 47,925 | | 37,275 | | 17.00 | | 9/18/2030 | | | | | (4) | 15,625 | | 59,375 | | 15.75 | | 1/31/2032 | | | | | (6) | | | | | | | | 19,561 | | 157,075 | | (7) | | | | | | | | 13,000 | | 104,390 |
(1) Market value has been computed in accordance with SEC rules as the eventnumber of immediate termination without causeunvested shares or units multiplied by the Company,closing price per share of our ADSs on The Nasdaq Global Select Market as of December 30, 2022 ($8.03). (2) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is August 1, 2022. This grant was awarded outside the 2020 Plan pursuant to the inducement grant exception under Nasdaq Listing Rule 5635(c). (3) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is September 18, 2020. This grant was made under the 2020 Plan. (4) Options vest over a 4 year service period in 48 equal monthly installments, subject to continued service through each applicable vesting date. The vesting commencement date is February 1, 2022. This grant was made under the 2020 Plan. (5) The restricted share units vest in four equal annual installments, subject to continued service through each applicable vesting date. The vesting commencement date is August 1, 2022. This grant was made under the 2020 Plan. (6) The restricted share units are subject to 25% vesting upon the earlier of (i) the one year anniversary of the date of grant, or if(ii) the executive orfirst day following the six-month anniversary of the listing of the Company terminate’s ordinary shares on any stock exchange on which the executive’s employment,closing price of the shares is 20% higher than the listing price for at least five consecutive trading days. They vest quarterly thereafter over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is August 12, 2021. This grant was made under the 2017 Plan. (7) The restricted share units vest in four equal annual installments, subject to continued service through each applicable vesting date. The vesting commencement date is February 1, 2022. This grant was made under the 2020 Plan. (8) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and assuming the executivebalance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is placed on garden leave forFebruary 1, 2021. This grant was made under the full2020 Plan. (9) The restricted share units vest in four equal annual installments, subject to continued service through each applicable notice period, (i) Mr. Goldsmith and Dr. Malievskaia are each entitled to nine months’ salary and (ii) Dr. Goodwinvesting date. The vesting commencement date is entitled to three months salary.February 1, 2022. This grant was made under the 2020 Plan.
(3) Benefits received byPAY VERSUS PERFORMANCE
The following table shows the total compensation for each of our principal executive officers (each a "PEO") and the average compensation for our other named executive officers during the last two fiscal years ended December 31, 2022 and 2021 compared to our net income and total shareholder return for the last two fiscal years.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Year | Summary Compensation Table Total for First PEO(1) | Summary Compensation Table Total for Second PEO(2) | Compensation Actually Paid to First PEO(1)(4) | Compensation Actually Paid to Second PEO(2)(5) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers(3) | Average Compensation Actually Paid to Non-PEO Named Executive Officers(3)(6) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return | Net Income | | (a) | (b) | (b) | (c) | (c) | (d) | (e) | (f) | (g) | | 2022 | 2,977,030 | 7,643,576 | 786,153 (4) | 3,848,172 (4) | 1,659,322 | 639,499 (4) | 47 | (91,505,000) | | 2021 | 943,524 | — | (2,553,688) (5) | — | 1,215,021 | (1,893,965) (5) | 130 | (71,742,000) |
(1) Mr. Goldsmith served as our PEO throughout 2021 and Dr.during 2022 until July 31, 2022. (2) Mr. Nath served as our PEO beginning on August 1, 2022.
(3) For fiscal 2022, our non-PEO named executive officers were Matthew Owens and Ekaterina Malievskaia. For fiscal 2021, our non-PEO named executive officers were Ekaterina Malievskaia, upon termination relates to health insurance. Dr.Guy Goodwin, does not participate in our benefits plan.Piers Morgan (our former Chief Financial Officer) and Nate Poulsen (our former General Counsel).
(4) Assumes each Named Executive Officer has 26 accrued but untaken holidays. InThe 2022 compensation actually paid to our PEO and the event any Named Executive Officer ceasesaverage compensation actually paid to be an employeeour non-PEO named executives reflects the following adjustments from total compensation reported in the Summary Compensation Table:
| | | | | | | | | | | | | First PEO | Second PEO | Average of Non-PEO's | | Total compensation reported in the Summary Compensation Table | 2,977,030 | 7,643,576 | 1,659,322 | | Deduct the equity compensation reported in the Summary Compensation Table in column (Stock Awards) and column (Option Awards), | (2,150,660) | (7,177,631) | (1,061,051) | | Add year end fair value all awards granted during 2022 that are outstanding and unvested as of the end of the fiscal year; | 881,954 | 3,382,227 | 476,050 | | Add change in fair value (from prior year-end) of prior year equity awards that are unvested and outstanding | (854,742) | — | (354,936) | | Add for awards that were granted and vested in 2022, the fair value as of the vesting date | 264,337 | — | 57,296 | | Add the change in fair value (from prior year-end to vesting date) of prior year equity awards that vested in the 2022 | (331,766) | — | (137,183) | | Compensation Actually Paid for Fiscal Year 2022 | 786,153 | 3,848,172 | 639,498 |
(5) The 2021 compensation actually paid to our first PEO and the average compensation actually paid of our non-PEO named executives reflects the following adjustments from total compensation reported in the Summary Compensation Table:
| | | | | | | | | | First PEO | Average of Non-PEO's | | Total compensation reported in the Summary Compensation Table | 943,524 | 1,215,022 | | Deduct the equity compensation reported in the Summary Compensation Table in column (Stock Awards) and column (Option Awards), | — | (485,111) | | Add year end fair value all awards granted during 2021 that are outstanding and unvested as of the end of the fiscal year; | — | 353,522 | | Add change in fair value (from prior year-end) of prior year equity awards that are unvested and outstanding | (2,691,551) | (1,331,837) | | Add for awards that were granted and vested in 2021, the fair value as of the vesting date | — | — | | Add the change in fair value (from prior year-end to vesting date) of prior year equity awards that vested in 2021 | (785,661) | (385,451) | | Subtract for any awards granted in any prior fiscal year that fail to meet the applicable vesting conditions during 2021, the amount equal to the fair value at the end of the prior fiscal year | — | (1,260,109) | | Compensation Actually Paid for Fiscal Year 2021 | (2,533,688) | (1,893,964) |
Analysis of the Company, regardlessInformation Presented in the Pay Versus Performance Table
We generally seek to incentivize long-term performance, and therefore do not specifically align our performance goals with “compensation actually paid” (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the reason,relationships between information presented in the Pay Versus Performance table. Since our second PEO was not employed during 2021, he or she would be entitledis not included in either of the below comparisons.
Compensation Actually Paid and Net Loss
As a clinical-stage company primarily focused on research and development of novel therapies to paymenttreat series mental health conditions, our company has not historically utilized net income (loss) as a performance measure for any accrued but untaken holiday equalour executive compensation program. From 2021 to 1/260th of his or her salary for each day. If either party has served notice2022, our net loss increased and the compensation actually paid to terminate, the Company may require theour first PEO and named executive to take any accrued but unused holiday entitlement during the notice period. Any accrued but unused holiday entitlement shall be deemed to be taken during any period of garden leave. (5) In the event the executive’s employment is terminated by the Company or by the employee in response toofficers as a fundamental breach of contract by the Company within 12 months following a change in control, (a) Mr. Goldsmith is entitled to 18 months salary, his pro rated bonus and an amount equivalent to the cost to the Company of providing Mr. Goldsmith with 18 months of employment benefits, (b) Dr. Goodwin is entitled to 12 months’ salary, his pro rated bonus and an amount equivalent to the cost to the Company of providing Mr. Goldsmith with 12 months of employment benefits, and (c) Dr. Malievskaia is entitled to 12 months’ salary, her pro rata bonus, and (c) an amount equivalent to the cost to the Company of providing Dr. Malievskaia with her other employment benefits for 12 months.group (excluding our PEOs) also increased between those years.
Each
Compensation Actually Paid and TSR
As shown in the following graph, the compensation actually paid to our first PEO and the average amount of Mr. Poulsen and Mr. Morgan were no longer servingcompensation actually paid to our named executive officers as a group (excluding our First PEO) during the periods presented are negatively correlated. As discussed above in "Executive Compensation - Primary Elements of Compensation Program" we use a combination of short-term cash incentive compensation opportunities for our named executive officerofficers, in the form of annual cash bonuses to incentivize and award delivery of the Company atCompany’s strategy and corporate objectives, and long-term equity incentive compensation consisting of share options, which provide value only if the endmarket price of fiscal year 2021. Additionally, since Mr. Poulsen did not breach anyour shares increases and if the executive officer continues in our employment over the vesting period, and restricted share units, which provide value only if the executive officer continues in our employment over the vesting period. These equity awards strongly align our executive officers’ interests with those of hisour shareholders by providing a continuing obligations through his termination date, he received $892,500 (an amount equalfinancial incentive to nine monthsmaximize long-term value for our shareholders and by encouraging our executive officers to continue in our employment for the long-term.
Mr. Morgan did not receive any termination related payments in connection with his voluntary termination of employment with the Company.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS Equity Compensation Plans Table The following table sets forth information as of December 31, 20212022 regarding ordinary shares that may be issued under our equity compensation plans: | | | | | | | | | | | | | Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (#) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights ($) (1) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column) (3) | Equity Compensation Plans Approved by Security Holders (2) | 3,195,503 (4) | 13.53 | 1,260,865 | | Equity Compensation Plans not Approved by Security Holders | — | — | — | | Total | 3,915,503 | 13.53 | 1,260,865 |
| | | | | | | | | | | | | Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (#) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights ($) (1) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column) (3)(4) | Equity Compensation Plans Approved by Security Holders (2) | 4,492,732 | $12.08 | 1,390,436 | Equity Compensation Plans not Approved by Security Holders(5) | 600,000 | $1.78 | — | | Total | 5,092,732 | $13.85 | 1,390,436 |
(1) The weighted average exercise price is calculated based solely on outstanding share options. (2) Includes the following plans: our 2020 Plan, our 2017 Plan and our Employee Stock Purchase Plan (“ESPP”). (3) The Company initially reserved 2,074,325 of its ordinary shares for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by up to 4% of the outstanding number of ordinary shares on the immediately preceding December 31, or such lesser number of shares as determined by our Compensation and Leadership Development Committee. This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. The total number of ordinary shares that may be issued under the 2020 Plan was 2,074,3253,755,120 shares as of December 31, 2021,2022, of which 406,737 667,802shares remained available for future grant. As of December 31, 2021, the Company was authorized under the shareholder agreements to issue a total of 13,601,246 ordinary shares, including shares underlying options granted pursuant to the 2017 Plan. Forfeitures are accounted for as they occur. As of December 31, 2021, there were 514,075 shares available for issuance as incentives to the Company’s employees and directors, which includes shares underlying options that may be granted from time to time subsequent to December 31, 2021 under the terms of the 2017 Plan.
The ESPP initially reserves and authorizes the issuance of up to a total of 340,053 ordinary shares to participating employees. The ESPP provides that the number of shares reserved and
available for issuance will automatically increase each January 1, beginning on January 1, 2022 and each January 1 thereafter through January 1, 2022, by the lesser of (i) 1% of the outstanding number of ordinary shares on the immediately preceding December 31 or (ii) 510,058 ordinary shares. The number of shares reserved under the ESPP is subject to change in the event of a share split, share dividend or other change in our capitalization. On October 1, 2021, the Company launched the Share Incentive Plan and the ESPP, through which employees can purchase shares at a discounted price. At the end of each six months,month purchase period, shares will automatically be purchased at the lower of the opening and closing price of the shares for the savingpurchase period minus a 15% discount.
(4) Amount does not include any purchase rights accruing under the ESPP during the current purchase period, which commenced on OctoberNovember 1, 2021,2022, because the purchase right (and therefore the number of shares to be purchased) will not be determined until the end of the purchase period on March 31, 2022.April 30, 2023.
(5) On August 1, 2022, we granted a non-qualified share option to purchase an aggregate of 600,000 shares to Mr. Nath in connection with his appointment as Chief Executive Officer. In accordance with Nasdaq Listing Rule 5635(c)(4), the non-qualified share option award was approved by Compensation and Leadership Development Committee and made as a material inducement to Mr. Nath’s entry into employment as our new Chief Executive Officer. The non-qualified share option has a 10-year term and vests as to one-fourth on August 1, 2023 (the first anniversary of his employment commencement date) and as to the remaining three-fourths in equal monthly installments over the following 36 months, subject to Mr. Nath remaining an employee on the applicable vesting dates. The non-qualified share option has other terms that mirror those of non-qualified share options granted under our 2020 Plan and the standard form of non-qualified share option agreement.
AUDIT AND RISK COMMITTEE REPORT The Audit and Risk Committee oversees the accounting and financial reporting processes of COMPASS Pathways plc (the “Company”) and the audits of the Company’s financial statements, evaluates auditor performance, manages relations with the Company’s independent registered public accounting firm and evaluates policies and procedures relating to internal control systems. The Audit and Risk Committee operates under a written Audit and Risk Committee charter that has been adopted by the Board of Directors of the Company (the “Board”). All members of the Audit and Risk Committee currently meet the independence and qualification standards for audit committee membership set forth in the listing standards provided by Nasdaq and the U.S. Securities and Exchange Commission (“SEC”), and the Board has determined that Annalisa Jenkins and Linda McGoldrick are “audit committee financial experts,” as the SEC has defined that term in Item 407 of Regulation S-K. The Audit and Risk Committee members are not professional accountants or auditors. The members’ functions are not intended to duplicate or to certify the activities of management and the independent registered public accounting firm. The Audit and Risk Committee serves a board-level oversight role in which it provides advice, counsel and direction to management and the auditors on the basis of the information it receives, discussions with management and the auditors, and the experience of the Audit and Risk Committee’s members in business, financial and accounting matters. The Audit and Risk Committee oversees the Company’s financial reporting process on behalf of the Board. The Company’s management has the primary responsibility for the financial statements and reporting process, including the Company’s system of internal controls. In fulfilling its oversight responsibilities, the Audit and Risk Committee reviewed with management the audited financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021.2022. This review included a discussion of the quality and the acceptability of the Company’s financial reporting, including the nature and extent of disclosures in the financial statements and the accompanying notes. The Audit and Risk Committee also reviewed the progress and results of the testing of the design and effectiveness of its internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002. The Audit and Risk Committee also reviewed with PricewaterhouseCoopers LLP (“PwC”), our independent registered public accounting firm, which is responsible for expressing an opinion on the conformity of the audited financial statements with accounting principles generally accepted in the United States of America, their judgments as to the quality and the acceptability of the Company’s financial reporting and such other matters as are required to be discussed with the Committee by Public Company Accounting Oversight Board (“PCAOB”) AU 380, Communications with Audit Committees, and SEC Regulation S-X Rule 207, Communication with Audit Committees. The Audit and Risk Committee has received the written disclosures and the letter from PwC required by the applicable requirements of the PCAOB regarding PwC’s communications with the audit committee concerning independence. The Audit and Risk Committee has discussed with PwC its independence from management and the Company. In addition to the matters specified above, the Audit and Risk Committee discussed with PwC the overall scope, plans and estimated costs of their audit. The Audit and Risk Committee met with PwC periodically, with and without management present, to discuss the results of PwC’s examinations, the overall quality of the Company’s financial reporting and PwC’s reviews of the quarterly financial statements, and drafts of the quarterly and annual reports. Based on the reviews and discussions referred to above, and subject to the limitations of the Audit and Risk Committee’s role and responsibilities referred to above and in the Audit and Risk Committee charter, Audit and Risk Committee recommended to the Board that the Company’s audited financial statements should be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 20212022 for filing with the SEC.
| | | | | The Audit and Risk Committee of the Board | | Linda McGoldrick, Chair Annalisa Jenkins Robert McQuade |
The information contained in this Audit and Risk Committee report shall not be deemed to be “soliciting material,” “filed” with the SEC, subject to Regulations 14A or 14C of the Exchange Act, or subject to the liabilities of Section 18 of the Exchange Act. No portion of this audit and risk committee report shall be deemed to be incorporated by reference into any filing under the Securities Act, or the Exchange Act, through any general statement incorporating by reference in its entirety the proxy statement in which this report appears, except to the extent that we specifically incorporate this report or a portion of it by reference. In addition, this Audit and Risk Committee report shall not be deemed filed under either the Securities Act or the Exchange Act.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table and related footnotes set forth information with respect to the beneficial ownership of our ordinary shares, as of April 19, 2022,4, 2023, by: •each beneficial owner of more than 5% of our ordinary shares; •each of our named executive officers and directors; and •all of our current executive officers and directors as a group. Beneficial ownership is determined in accordance with the rules and regulations of the SEC. Under these rules, beneficial ownership includes any shares as to which a person has sole or shared voting power or investment power. In computing the number of ordinary shares beneficially owned by a person and the percentage ownership of that person, ordinary shares subject to options, or other rights held by such person that are currently exercisable or will become exercisable within 60 days of April 19, 20224, 2023 are considered outstanding. These ordinary shares, however, are not included in the computation of the percentage ownership of any other person. Applicable percentage ownership is based on 42,511,35745,343687 ordinary shares outstanding as of April 19, 2022.4, 2023. Unless otherwise indicated, addresses of the directors, executive officers and named beneficial owners are in care of COMPASS Pathways plc, 3rd Floor, 1 Ashley Road, Altrincham, Cheshire WA14 2DT, United Kingdom.
| | | | | | | | | | | | | | | | | Ordinary Shares Beneficially Owned | | Name of Beneficial Owner | | Number | | Percent | | Greater than 5% Shareholders | | | | | ATAI Life Sciences AG(1) | | 9,435,758 | | 19.74% | George Goldsmith(2) | | 4,345,249 | | 10.20% | Ekaterina Malievskaia(3) | | 4,324,653 | | 10.16% | | Named Executive Officers and Directors | | | | | George Goldsmith(2) | | 4,345,249 | | 10.20% | Piers Morgan(4) | | 206,382 | | * | Nate Poulsen(5) | | 12,570 | | * | Guy Goodwin(6) | | 3,750 | | * | Ekaterina Malievskaia(3) | | 4,324,653 | | 10.16% | | Jason Camm | | — | | * | Annalisa Jenkins(7) | | 118,720 | | * | Thomas Lönngren(8) | | 124,584 | | * | David Norton(9) | | 133,650 | | * | Linda McGoldrick(10) | | 9,443 | | * | Robert McQuade(11) | | 1,602,771 | | 3.77% | Wayne Riley(12) | | 7,000 | | * | All Current Executive Officers and Directors as a Group (12 persons)(13) | | 10,669,820 | | 24.85% |
| | | | | | | | | | | | | | | | | Ordinary Shares Beneficially Owned | | Name of Beneficial Owner | | Number | | Percent | | Greater than 5% Shareholders | | | | | ATAI Life Sciences AG(1) | | 9,435,758 | | 20.81% | George Goldsmith(2) | | 4,419,691 | | 9.72% | Ekaterina Malievskaia(3) | | 4,371,525 | | 9.62% | | Named Executive Officers and Directors | | | | | George Goldsmith(2) | | 4,419,691 | | 9.72% | Kabir Nath(4) | | 12,825 | | * | Michael Falvey(5) | | 56,875 | | * | Guy Goodwin(6) | | 3,750 | | * | Ekaterina Malievskaia(3) | | 4,371,525 | | 9.62% | Matthew Owens(7) | | 40,063 | | * | Annalisa Jenkins(8) | | 138,217 | | * | Thomas Lönngren(9) | | 151,970 | | * | David Norton(10) | | 153,147 | | * | Linda McGoldrick(11) | | 26,389 | | * | Robert McQuade(12) | | 1,620,167 | | 3.57% | Wayne Riley(13) | | 13,000 | | * | All Current Executive Officers and Directors as a Group (12 persons)(14) | | 11,072,004 | | 23.99% |
* Represents beneficial ownership of less than one percent.
(1) Based solely on a Schedule 13G/13D/A filed with the SEC by ATAI Life Sciences AG (“ATAI AG”) and ATAI Life Sciences N.V. (“ATAI N.V.”) on December 1, 2021. Consists of 9,435,758 ordinary shares owned by ATAI AG, a wholly-owned subsidiary of ATAI N.V. ATAI Life Sciences N.V. and ATAI Life Sciences AG both hold shared voting and dispositive power over 9,435,758 shares. ATAI Life Sciences AG is a German public limited company. Its address is Barer Straße 7, 80333 München, Germany. (2) Represents (i) 4,278,3394,280,702 ordinary shares, (ii) 2,7942,795 ordinary shares issuable upon the settlementvesting of RSUs releasable within 60 days of April 19, 20224, 2023 and (ii) 64,116136,194 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 4, 2023. Mr. Goldsmith and Dr. Malievskaia are married
but they expressly disclaim beneficial ownership of each other’s shares in the Company. Pursuant to the terms of call option agreements dated May 19, 2022.2020, as amended and restated on July 21, 2020, as further amended and restated on September 9, 2020, and as further amended effective February 15, 2023, Lars Christian Wilde, a former co-founder of the Company, has an option to purchase 776,565 of our ordinary shares for an exercise price of less than £0.01 per share from each of Mr. Goldsmith and Dr. Malievskaia, exercisable at any time following our initial public offering until September 9, 2033. (3) Represents (i) 4,278,512 ordinary shares, (ii) 2,795 ordinary shares issuable upon vesting of RSUs within 60 days of April 4, 2023 and (iii) 90,218 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 4, 2023. Mr. Goldsmith and Dr. Malievskaia are married but they expressly disclaim beneficial ownership of each other’s shares in the Company.
(3) Represents (i) 4,278,335call option agreements dated May 19, 2020, as amended and restated on July 21, 2020, as further amended and restated on September 9, 2020, and as further amended effective February 15, 2023, Lars Christian Wilde, a former co-founder of the Company, has an option to purchase 776,565 of our ordinary shares (ii) 2,794 ordinary shares issuable upon the settlementfor an exercise price of RSUs releasable within 60 daysless than £0.01 per share from each of April 19, 2022Mr. Goldsmith and (iii) 43,524Dr. Malievskaia, exercisable at any time following our initial public offering until September 9, 2033.
(4) Represents 12,825 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022. Mr. Goldsmith and Dr. Malievskaia are married but they expressly disclaim beneficial ownership of each other’s shares in the Company.4, 2023. (4)
(5) Represents (i) 150,382 ordinary shares and (ii) 56,00056,875 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022.4, 2023. (5) Represents 12,570 ordinary shares.
(6) Represents 3,750(i) 2,062 ordinary shares and (ii) 66,073 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022.4, 2023.
(7) Represents (i) 8,9031,407 ordinary shares and (ii) 38,656 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 4, 2023.
(8) Represents (i) 9,970 ordinary shares, (ii) 1,484 ordinary shares issuable upon vesting of RSUs within 60 days of April 4, 2023 and (iii) 126,763 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 4, 2023. (9) Represents (i) 89,049 ordinary shares and (ii) 62,921 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 4, 2023. (10) Represents (i) 9,970 ordinary shares, (ii) 1,484 ordinary shares issuable upon the settlement of RSUs releasable within 60 days of April 19, 20224, 2023 and (iii) 108,333141,693 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022.4, 2023. (8)
(11) Represents (i) 84,049 ordinary shares and (ii) 40,53526,389 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022.4, 2023. (9)(12) Represents (i) 8,9031,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC and (ii) 1,484 ordinary shares issuable upon the settlement of RSUs releasable within 60 days of April 19, 2022 and (iii) 123,26325,490 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022.
(10) Represents 9,443 ordinary shares underlying4, 2023 held by Dr. McQuade. Dr. McQuade holds the share options to purchase ordinary shares fromfor the Company exercisable within 60 days after April 19, 2022.
(11) Represents (i) 1,594,677 ordinary shares held bybenefit of the McQuade Center for Strategic Research and Development LLC and (ii) 8,094 ordinarydisclaims beneficial ownership of any shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022 held by Dr. McQuade.such share options. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares.
(12)(13) Represents 7,00013,000 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022.4, 2023.
(13)(14) Represents (i) 10,253,20610,266,349 ordinary shares, (ii) 8,5568,558 ordinary shares issuable upon the settlement of RSUs releasable within 60 days of April 19, 20224, 2023 and (iii) 408,058797,097 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 20224, 2023 held by our current officers and directors.
DELINQUENT SECTION 16(a) REPORTS
Under Section 16(a) of the Exchange Act, directors, executive officers, our principal accounting officer and beneficial owners of 10% or more of our common stock, or reporting persons, are required to report to the SEC on a timely basis the initiation of their status as a reporting person and any changes with respect to their beneficial ownership of our common stock. Based solely on our review of copies of such forms that have been filed with the SEC, or written representations from reporting persons, we believe that during the fiscal year ended December 31, 2022, all reporting persons complied with all applicable filing requirements, except with respect to (i) a Form 4 filing made on February 15, 2022 to report grants of share options and restricted share units to Mr. Owens on February 1, 2022, (ii) a Form 3 filing made on February 28, 2022 by ATAI Life Sciences N.V. to report initiation of their status as a reporting person on January 1, 2023, (iii) Form 4 filings made on March 31, 2022 to report grants of restricted share units to each of Mr. Goldsmith and Dr. Malievskaia on February 1, 2022, (iv) a Form 4 filing made on April 6, 2022 to report grants of share options to Mr. Goodwin on February 1, 2022, (v) Form 4 filings made on April 19, 2022 to report grants of share options to each of Mr. Goldsmith and Dr. Malievskaia on February 1, 2022, and (vi) Form 4 filings made on February 3, 2023 to report net withholding of shares to settle taxes upon vesting of restricted stock units held by each of Mr. Goldsmith and Dr. Malievskaia on December 20, 2022.
CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH RELATED PERSONS Other than the compensation arrangements described above under the sections “Director Compensation” and “Executive Compensation Discussion and Analysis” and the transactions described below, in the period from January 1, 2021 through the date of this Proxy Statement, we have engaged in the following transactions with our directors, executive officers or holders of more than 5% of our outstanding share capital and their affiliates, which we refer to as our related parties. AGREEMENTS WITH OUR EXECUTIVE OFFICERS AND DIRECTORS We have entered into employment agreements with our executive officers and service agreements with our non-executive directors. These agreements contain customary provisions and representations, including confidentiality, non-competition, non-solicitation and inventions assignment undertakings by the executive officers. However, the enforceability of the non-competition provisions may be limited under applicable law. FAMILY RELATIONSHIPS George Goldsmith, our Chief Executive Officer and Chairman of our Board Chair, is married to Ekaterina Malievskaia, our Chief Innovation Officer and a member of our Board. On October 5, 2020, Dr. Malievskaia’s son began work with us as Stakeholder Engagement and Operations Associate, and subsequently resigned effective April 16, 2021. As of the date of this Proxy Statement, there were no other family relationships between our executive officers and any of our directors. INSURANCE AND INDEMNIFICATION To the extent permitted by the Companies Act 2006 and in accordance with our Articles of Association, we are empowered to indemnify our directors against any liability they incur by reason of their directorship. Prior to the completion of our IPO, we obtained andWe maintain directors’ and officers’ insurance to insure such persons against certain liabilities. We enteredalso enter into a deed of indemnity with each of our directors and executive officers prior to the completion of our IPO.officers. These agreements and our Articles of Association require us to indemnify our directors and executive officers to the fullest extent permitted by law. RELATED PARTY TRANSACTION POLICY We have adopted a related party transaction policy. This policy became effective on September 17, 2020, the date on which our registration statement on Form F-1 in connection with our IPO was declared effective by the SEC. Pursuant to this policy, the Audit and Risk Committee has the primary responsibility for reviewing and approving or disapproving “related party transactions,” which are transactions between us and related parties in which the related party has a direct or indirect material interest. For purposes of this policy, a related party is defined as a director, executive director, nominee for director, or greater than 5% beneficial owner of any class of our voting securities, and their immediate family members.
DELIVERY OF PROXY MATERIALS Our 2022 Annual Report, on Form 10-K, including audited financial statements, accompanies this Proxy Statement. Copies of our Annual Report on Form 10-K and the exhibits thereto are available from the Company without charge upon written request of a shareholder. Copies of these materials are also available online through the SEC at www.sec.gov. The Company may satisfy SEC rules regarding delivery of proxy materials, including this Proxy Statement and our 2022 Annual Report, by delivering a single set of proxy materials to an address shared by two or more Company shareholders or ADS holders. This delivery method can result in meaningful cost savings for the Company. In order to take advantage of this opportunity, the Company may deliver only a single set of proxy materials to multiple shareholders or ADS holders who share an address, unless contrary instructions are received prior to the mailing date. Similarly, if you share an address with another shareholder or ADS holder and have received multiple copies of our proxy materials, you may write or call us at the address and phone number below to request delivery of a single copy of the proxy materials in the future. We undertake to deliver promptly upon written or oral request a separate copy of the proxy materials, as requested, to a shareholder or ADS holders at a shared address to which a single copy of the proxy materials was delivered. If you are an ordinary shareholder of record and prefer to receive separate copies of proxy materials either now or in the future, please contact Ben Harber, Company Secretary, COMPASS Pathways plc, 3rd Floor, 1 Ashley Road, Altrincham, Cheshire, WA14 2DT, United Kingdom or by telephone at +1 (646) 905-3974. If you hold ADSs and you prefer to receive separate copies of proxy materials either now or in the future, please contact the Depositary, your brokerage firm or bank, as applicable. EACH ORDINARY SHAREHOLDER IS URGED TO COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY FORM. EACH ADS HOLDER IS URGED TO COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ADS PROXY CARD TO CITIBANK, N.A., THE DEPOSITARY FOR THE ADSs.
ADDITIONAL INFORMATION U.K. STATUTORY ANNUAL ACCOUNT AND REPORTS OF THE BOARD OF DIRECTORS AND AUDITORS OF COMPASS PATHWAYS PLC FOR THE YEAR ENDED DECEMBER 31, 20212022 Consistent with its obligations under the U.K. Companies Act 2006, our Board will present at the AGM our U.K. statutory annual accounts and reports for the year ended December 31, 2021,2022, which have been approved by and, where appropriate, signed on behalf of our Board and will be delivered to the Registrar of Companies in the United Kingdom following the AGM. A copy of our U.K. statutory directors’ remuneration report, including the annual report on remuneration, is included as Annex A to this Proxy Statement. A complete copy of our U.K. statutory annual accounts and reports, including the statutory Board of Directors report, strategic report, and auditor’s report on our U.K. accounts will be sent separately to you no less than 21 days prior to the AGM. You will be provided an opportunity to raise questions in relation to such accounts and reports at the AGM. Full accounts and reports will be available for inspection prior to and during the AGM. SHAREHOLDERS' RIGHT TO CALL A GENERAL MEETING Our shareholders have the right to call a meeting of our shareholders. The U.K. Companies Act 2006 generally requires the directors to call a general meeting once we have received requests to do so from shareholders representing at least 5% of our paid-up shares entitled to vote at a general meeting. The U.K. Companies Act 2006 generally prohibits shareholders of a U.K. public limited company from passing written resolutions. However, significant shareholders would, in any case, still have the power to call a general meeting and propose resolutions. These provisions are mandatory under the U.K. Companies Act 2006 and cannot be waived by our shareholders. SHAREHOLDER PROPOSALS Pursuant to Rule 14a-8 under the Exchange Act, in order to be considered for inclusion in our proxy statement for our 20232024 annual general meeting of shareholders, shareholder proposals must be received by the Company at the Office of the Company Secretary, 3rd Floor, 1 Ashley Road, Altrincham, Cheshire, WA14 2DT, United Kingdom no later than 120 days before the anniversary of the date on which we sent our proxy materials for the AGM, or January 11,December 30, 2023. However, if the date of such annual general meeting is more than 30 calendar days from the date of the anniversary of the AGM, then the notice must be received by our Company Secretary a reasonable time before we begin to print and send our proxy materials. To comply with the universal proxy rules, (once effective), shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice at our principal executive offices that sets forth the information required by Rule 14a-19 under the Exchange Act no later than April 17, 2023.3, 2024. We also encourage anyone sending in a shareholder proposal to additionally send such proposals via email AGM@compasspathways.com. Under Section 338 of the U.K. Companies Act 2006, shareholders representing at least 5% of holders entitled to vote on a resolution at an annual general meeting may require the Company to include such resolution in its notice of an annual general meeting. Provided the applicable thresholds are met, notice of the resolution must be received by the Company at the Office of the Company Secretary, 3rd Floor, 1 Ashley Road, Altrincham, Cheshire, WA14 2DT, United Kingdom at least six weeks prior to the date of the annual general meeting, or, if later, at the time notice of the annual general meeting is delivered to shareholders. QUESTIONS? If you have any questions or need more information about the AGM please write to us at: Ben Harber Company Secretary COMPASS Pathways plc 3rd Floor 1 Ashley Road Altrincham Cheshire WA14 2DT United Kingdom
Annex A DIRECTORS’ REMUNERATION REPORT
This part of the Remuneration Report sets out the remuneration policy for the Company. The current Directors’ Remuneration Policy (the “Policy”“Policy”) was approved by shareholders in a binding vote at the AGM held on 22 June 2021. It took effect from the date of approval and applies for a period of three years until 2024. At the 2022 annual general meeting of shareholders, 88.1% of shareholders voted in favour of the proposal to receive and approve, as a non-binding advisory resolution, the U.K. statutory Directors’ Remuneration Report for the year ended 31 December 2021, with 0.1% voted against and 11.8% withheld from such proposal. Key considerations when determining the Policy The Policy was designed by the Committee with a number of specific principles in mind: •attract, retain and motivate high calibre Senior Management and focus them on the delivery of the Company’s strategic and business objectives; •encourage a corporate culture that promotes the highest level of integrity, teamwork and ethical standards; •be competitive against appropriate market benchmarks (being predominantly the US biotech sector) and have a strong link to performance, providing the ability to earn above-market rewards for strong performance; •be simple and understandable, both internally and externally; •encourage increased equity ownership to motivate executives in the overall interests of shareholders, the Company, employees and customers; and •take due account of good governance and promote the long-term success of the Company. In seeking to achieve the above objectives, the Committee is mindful of the views of a broad range of stakeholders in the business and accordingly takes account of a number of factors when setting remuneration including: market conditions; pay and benefits in relevant comparator organizations;organisations; terms and conditions of employment across the Company; the Company’s risk appetite; the expectations of institutional shareholders; and any specific feedback received from shareholders and other stakeholders. During 2020, associated with the Company’s IPO, the Committee determined that it was appropriate to benchmark the salary, bonus and option levels of Senior Management and make necessary adjustments to ensure these remain competitive with UK and US benchmarks. In 2021, the Committee reviewed the peer groups used to benchmark remuneration for Senior Management.
In 2022, the Committee reviewed and updated the peer group used to benchmark remuneration for Senior Management. The directorsDirectors identify any conflicts of interest at the beginning of each boardBoard meeting and the beginning of each Committee meeting. Currently theMr. Goldsmith who served as Chairman and Chief Executive Mr Goldsmith, is alsountil August 2022 and continues to serve as Chairman of the Board, and is married to the Chief Innovation Officer and Executive Director, Dr Malievskaia. The Senior Independent Director, Mr Norton and the Chair of the Compensation and Leadership Development Committee, Dr Jenkins, have assumed the governance role for all matters pertaining to the compensation of Mr Goldsmith and Dr Malievskaia. No conflicts of interest relevant to remuneration have been identified to date. The Policy for Executive Directors CurrentlyDuring 2022 the Company has only twohad three Executive Directors, but the Policy will apply equally to any additional Executive Directors who may be appointed in the future. The Committee annually reviews the operation of the remuneration packages to ensure they are operating within an acceptable risk profile and that they do not inadvertently encourage any economic, social or governance issues.
The total remuneration for the Executive Directors is made up of the following elements: •salary; •benefits; •annual bonus; •long-term incentive awards; and •pension.Pension/401k contribution. Long term incentive awards: The Company adopted the 2020 Share Option Plan, or the 2020 plan and Employee Share Purchase Plan, orthe ESPP, on completion of its Nasdaq IPO in September 2020. On 1 October 2021, the Company launched the Share Incentive Plan (the “SIP”) and the ESPP. The companySince the completion of the Nasdaq IPO, the Company has only issued equity under these two plans since completionand has issued an inducement grant, on such terms as are defined under applicable NASDAQ listing rules, in connection with hiring of its Nasdaq IPO.Mr. Nath as our Chief Executive Officer in 2022. In the period 1 January 2020 to 18 September 2020, the Company granted options under the 2017 Plan.
| | | | | | | Purpose and link to strategy | | Salary | Provides market competitive fixed remuneration that reflects the responsibilities of the role undertaken, the experience of the individual and performance in the role over
time. | | Benefits | Provides market competitive, yet cost-effective employment benefits. | | Annual bonus | To incentivizeincentivise and award delivery of the Company's strategy and corporate objectives
on an annual basis. | | Equity Incentives | To align the interests of Executive Directors and management with long-term shareholder interests and to attract, incentivizeincentivise and retain staff. To incentivizeincentivise and recognizerecognise achievement of longer term corporate objectives and sustained
shareholder value creation. To effectively manage the Group's cash resources. | | Pension | To provide a competitive and tax-efficient pension savings plan which complies with
at least the minimum contributions requirements of the applicable jurisdiction. |
| | | | | | | Operation | | Salary | Reviewed annually taking into account individual responsibilities, experience, performance, inflation and market rates. The Committee will also consider the pay and employment conditions in the wider workforce when determining Executive Directors’ salaries. Where there has been a change in role, or the individual is new to the role, increases could be higher. Salary increases are normally effective from 1 January each year. Salaries are periodically benchmarked against a relevant peer group of biotech companies, most of which are listed on Nasdaq, with others listed on European stock exchanges, with a similar stage of clinical development, and similar
market capitalizationcapitalisation or net assets. | | Benefits | For Executive Directors this includes private medical insurance and life insurance. Other employment benefits may be provided from time to time on similar terms as those of other employees. If an Executive Director is based outside the UK additional benefits and assistance with relocation may be provided which reflect local market norms or legislation. Any reasonable business-related expenses can be reimbursed, including tax there-on. | | Annual bonus | Annual bonus performance targets are set at the start of the year by the Board and performance against objectives is assessed by the Compensation and Leadership Development Committee after the end of the relevant financial year. Bonuses are paid in cash after the award has been approved by the Committee.Committee and, as applicable for the Chief Executive Officer, the Board. | | Equity Incentives | ConditionalLong-term equity incentive awards are granted annually under the 2020 Plan. The awards have time-based vesting conditions and vest over a period of at least three years and may include a mix of share options, restricted share units, performance shares and other awards available for issuance under the 2020 Plan. Awards vest in accordance with the vesting schedule set for the relevant award in its equity agreement.
Under
Executive Directors are eligible to participate in the SIP and ESPP under the same conditions as other employees. The SIP and ESPP generally allow employees to save a portion (up to a specified maximum) of their salary over a six-month savings period and at the end of six months,the savings period, shares will automatically be purchased at the lower of the opening and closing price of the shares for the saving period minus a 15% discount.
The Committee maintains discretion over the types and terms of equity awards granted.
| PensionPension/401(k) | Executive Directors are eligible to join a defined contribution pension scheme. Only base salary is pensionable. Current Executive DirectorsDr Malievskaia and Mr Goldsmith have opted out of pension arrangements.arrangements while Mr Nath receives company 401k contributions. |
| | | | | | | Maximum potential value | | Salary | The current base salary of the Executive Directors is set out in the application of policy section of the Remuneration Report. Whilst there is no prescribed formulaic maximum, any increases will take into account prevailing market and economic conditions and the approach to employee pay throughout the organisation. Base salary increases are awarded at the discretion of the Committee; however, salary increases will normally be no greater than the general increase awarded to the wider workforce, in percentage of salary terms. However, a higher increase may be made where an individual had been appointed to a new role at below-market salary while gaining experience. Subsequent demonstration of strong performance may result in a salary increase which is higher than that awarded to the wider workforce. | | Benefits | The value of each benefit is not predetermined and is typically based upon the cost to the Company of providing said benefit which will vary from year to year based on the cost from third-party providers. | | Annual bonus | The maximum payable to an Executive Director is 125% of the target bonus level for each Executive Director. The target bonus level for the Chief Executive Officer is 60% of base salary (55% in 2021) and Chief Innovation Officer is 55%45% (45% in 2021) of base salary and planned to increase to 60% of base salary in 2022.salary. | | Equity Incentives | The Company initially reserved 2,074,325 of its ordinary shares for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each 1 January, beginning on 1 January 2022, by up to 4% of the outstanding number of ordinary shares on the immediately preceding 31 December, or such lesser number of shares as determined by our Compensation and Leadership Development Committee. This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. capitalisation.
The total number of ordinary shares that may be issued under the 2020 Plan was 2,074,3253,755,120 shares as of 31 December 2021,2022, of which 406,737667,802 shares remained available for future grant.
During the years ended 31 December 31,2022 and 2021, and 2020, the Company granted options to purchase 1,043,7022,120,783 and 3,405,4901,043,702 ordinary shares under the 2020 Plan to employees and non-employees, respectively.
During the year ended 31 December 2022, the Company granted options to purchase 600,000 shares to the Company’s new Chief Executive Officer as an inducement grant, as such term is defined under applicable NASDAQ listing rules. | PensionPension/401(k) | TheFor the pension, the maximum contribution, cash supplement (or combination thereof) payable by the Company is 3% of salary, which is at the same level as the general workforce. For the 401(k) defined contribution plan available to employees, including Executive Directors, in the United States, the Company match is equal to 100% of the amount an employee contributes to the 401(k) plan for each payroll period up to a maximum of 4% of cash compensation earned by such employee. |
| | | | | | | Performance metrics | | Salary | The overall performance of the individual and Company, including against individual performance objectives, is a key determinant for salary increases. | | Benefits | None. | | Annual bonus | ResearchOperational targets related to research and development, business development, financial goals and commercial targetsgoals are discussed with the Compensation and Leadership Development Committee and set at the start of the year by the Board. Details of the performance measures for the current year are provided in the Remuneration Report, subject to any nondisclosure on the basis of commercially-sensitive information. The payment of any bonus is at the absolute discretion of the Committee which has the discretion to override out-turn of the bonus if appropriate to do so, including but not limited to factors such as the underlying financial and operational performance of the Company and individual performance. | | Equity Incentives | Vesting may be on a time-phased basis or subject to performance conditions, as determined at the discretion of the Committee. During the years ended 31 December 2022 and 2021, the Company granted equity awards with time-phased vesting. | PensionPension/401(k) | None. |
The Committee operates the annual bonus and 2020 Plan, in accordance with their rules, and where relevant, the rules and regulations of the U.S. Securities and Exchange Commission and U.S. federal securities laws.NASDAQ listing rules. To maintain an efficient administrative process, the Committee retains the following discretion relating to remuneration: a.the eligibility to participate in the plans; b.the timing of grant of awards and any payments; c.the size of awards and payments (subject to the maximum limits set out in the Policy table above and the respective plan rules); d.the determination of whether any performance conditions have been met; and e.the annual review of performance objectives for the annual bonus plan. In certain exceptional circumstances, such as a material acquisition/divestment of a Group business or a change in the broader business environment, which mean the original performance conditions are no longer appropriate, the Committee may adjust the objectives, alter weightings or set different measures as necessary, to ensure the conditions achieve their original purpose and are not materially less difficult to satisfy. The Directors' service contracts and letters of appointment are kept for inspection at the Company's registered office.Non-Executive Directors are subject to fixed term contracts The Company has a classified Board with each Director serving a three-year term; each Director must seek re-election at the annual general meeting of one, twoshareholders at the end of his or three years. Executive Directors have contracts of indefinite duration.her three-year term.
Historical equity incentive awards Awards which were granted prior to 18 September 18, 2020 are disclosed separately in this Remuneration Report in the Long Term Incentive AwardsStatement of Directors’ Shareholding and Share Interests section. These awards remain eligible to vest, based on their original terms which are described separately in the Directors' Report on Remuneration.Remuneration Report. Annual bonus
The annual bonus is designed to drive the achievement of the Company’s strategic and corporate objectives. These targets are agreed by the Board and selected because of their importance in value creation for shareholders. Objectives are weighted for Executive Directors in proportion to the degree of importance of that objective for the Company. The weightings are agreed by the Committee. Remuneration on recruitment The remuneration package for any new Executive Director will be determined by the Committee in accordance with the terms of the Policy at the time of appointment (including salary, benefits, annual bonus, long-term incentive awards and pension). It is recognised that in order to attract and recruit talented individuals the Policy needs to allow sufficient flexibility with respect to remuneration on recruitment. The following policies apply to the remuneration on recruitment of new Executive Directors: Salary: Base salary will be determined based on the responsibilities of the role, experience of the individual and current market rates. It may be considered necessary to appoint a new Executive Director on or below market rates (e.g. to reflect limited boardBoard experience). In such circumstances, phased increases above those of the wider workforce may be required over an appropriate time period, to bring the salary to the desired market level, subject to the continued development in the role. Annual bonus: The ongoing annual bonus maximum will be in line with that outlined in the policy table for existing Executive Directors, pro-rated to reflect the period of service. Depending on the timing or nature of an appointment it may be necessary to set different initial performance measures and targets for the first year of appointment. Long-term incentive awards: 2020 Plan awards are granted in line with the policy outlined for existing Executive Directors. An award may be made shortly following an appointment. For internal appointments, existing awards will continue on their original terms.
Benefits:Benefits: Benefits provided should be in line with those of existing Executive Directors. For external and internal appointments, where required to meet business needs, reasonable relocation support will be provided. In addition, if it becomes necessary to appoint a new Executive Director from outside the UK, additional benefits may be provided to reflect local market norms or legislation.
Pension:Pension/401k: A company contribution or cash supplement up to the maximum as outlined for existing Executive Directors. Current Executive DirectorsOur Chair and Chief Innovation Officer have opted out of pension arrangements.arrangements while our current Chief Executive Officer receives a company contribution to his 401(k). Any new executives will be offered a pension or 401(k), as applicable, at the same level as the general workforce.
Sign-on payments and buy-out awards:awards: To enable the recruitment of exceptional talent, the Committee may offer additional cash and/or share-based remuneration to take account of and compensate for remuneration that the Executive Director is required to relinquish when leaving a former employer. The Committee will seek to structure any such replacement awards to be no more generous overall in terms of quantum or vesting than the award to be forfeited from the previous employer and will take into account the timing, form and performance requirements of the awards forgone. Where appropriate, any long-term incentive awards will be granted under the 2020 Plan, however, the Committee will have discretion to make use of the flexibility to make awards under any relevant exemptions in the SEC Rules.NASDAQ listing rules. For an internal Executive Director appointment, any variable pay element awarded in respect of the prior role will be allowed to pay out according to its terms. In addition, any other contractual remuneration obligations existing prior to appointment may continue. The fees for any new Chairman and non-Executive Director appointments will be set in accordance with the prevailing policy and at a level that is consistent with those of the existing Chairman and non-Executivenon- Executive Directors. Policy for payments on loss of office
The companyCompany does not have a policy of fixed term employment contracts, however, the Directors are required to retire and are entitled to put themselves forward for re-election at the AGM in accordance with their respective directorDirector class, as prescribed by the Company’s articles of association (“Articles of Association”Association”). The notice period for the existingcurrent Chief Executive Officer’s employment contract is 12 months, for90 days, provided however, that if the Chief Innovation Officer is 9 months, and three months forCompany terminates his employment contract without cause, the existing non-Executive Directors.Chief
Executive Officer is entitled to a cash severance payment equal to one year’s annual salary plus the target annual bonus amount for the year in which such termination occurs, for the Chief Innovation Officer is 9 months, and one months for the existing non- Executive Directors. The Committee’s approach to payments in the event that an Executive Director’s employment is terminated is to take account of the individual circumstances including the reason for termination, individual performance, contractual obligations, potential claims the Executive Director might have against the companyCompany and the terms of the equity incentive plans in which the Executive Director participates. Termination by notice from the Company: up to 12 months’ notice, with the discretion for the Committee to make a payment in lieu of notice for base salary, pension and other benefits that would otherwise have been paid during the notice period. Annual bonus: except for the current Chief Executive Officer who is entitled to his target annual bonus,: there is no automatic contractual entitlement to bonus or pro-rata bonus on termination, although this may be considered at the discretion of the Committee. Long-term incentives:incentives: whether any long-term incentive awards would vest and be exercisable upon loss of office would be subject to the relevant plan rules under which such award was granted. The 2020 Plan allows vesting and exercise of awards in the event of death, retirement, ill-health, injury, redundancy and any other reason at the discretion of the Committee. The Committee retains discretion to determine the extent to which the award will vest, taking into consideration the circumstances. Unvested awards normally lapse, although the Committee retains the power to determine, in accordance with the “good leaver” provisions of the relevant plan rules, what proportion of unvested awards will be retained and what proportion will lapse. In determining this, the Committee will give consideration to the reason for leaving, the extent of achievement of performance objectives at the date of leaving and may decide to pro-rate awards. Change of Control:Control: on a change of control, all unvested awards vest on the date of change of control. Change of control provisions in the Executive Directors’Chief Innovation Officer’s service agreementsagreement provide for a lump sum payment equal to the value of salary, bonus and contractual benefits for 12 months (or 18 months in the case of Mr. Goldsmith) if, within 12 months of the change of control, their employment by the Company is terminated (other than for reason of misconduct and certain other grounds, but including by way of constructive dismissal) less any sums paid by way of notice or payment in lieu of notice.
Additional payments:payments: the Committee reserves the right to make payments it considers reasonable under a settlement agreement, including payment or reimbursement of reasonable legal and professional fees, untaken holiday and any payment for the settlement of potential claims against the Company in the UK or other jurisdictions. Payment or reimbursement of reasonable outplacement fees may also be provided.
The Directors' service contracts are available for inspection at the Company's principal place of business: Fora - Soho 33 Broadwick Street Soho London W1F 0DQ
The Policy forfor the Chairman The Board approves fees payable to the Chairman. The Chairman (who also occupiesoccupied the role of Chief Executive Officer)Officer until August 2022) does not participate in discussions in respect of his own fees. The Policy for the Chief Executive Officer (CEO) The Board approves any compensation paid to the Chief Executive Officer and the Chief Executive Officer does not participate in any discussions relating to his own compensation. The Policy for Non-Executive Directors The Board approves the fees payable to the Company’s non-Executive Directors.
| | | | | | | | | | | | | Remuneration Element | Purpose and link to strategy | Operation and Maximum | Performance Related | | Chair’s fee | To attract and retain a high calibre individual with the requisite experience and knowledge. | The now Chair of the Board, Mr Goldsmith, served part of the year as Chief Executive Officer, is, as noted above, the current Chair of the Board; the Chief Executive Officer doesand did not receive any additional remuneration in respect of his duties as Chair. Executive Chair in 2022. His fee for 2023 was agreed by the Compensation Committee without his participation. Any fees payable in the future will be reviewed by the Committee on a periodic basis against those in similar sized companies to ensure they remain competitive and adequately reflect the time commitments and scope of the role. Any increase in fee levels may be above that of the wider workforce in a particular year to reflect the periodic nature of any review and/or any change in responsibilities/time commitments. The Chair may also receive limited travel and/or hospitality related benefits in connection with the role. The Chair may not receive any consultancy or other payments outside his fee.
| No | | Non-Executive Director fee | To attract and retain high calibre individuals with the requisite experience and knowledge. | The current fee levels are set out in the Non-ExecutiveNon- Executive Director cash fees section of the Remuneration Report. Fees are reviewed on a periodic basis against those in similar sized companies to ensure they remain competitive and adequately reflect the time commitments and scope of the role. A Board fee is paid to each non-Executivenon- Executive Director. Supplemental fees may be paid to the Senior Independent Director and for chairmanship and membership of Committees to recognizerecognise the additional time commitments and responsibilities of these roles. Any increase in fee levels may be above that of the wider workforce in a particular year to reflect the periodic nature of any review and/or any change in responsibilities/time commitments. If business needs arise, non-Executivenon- Executive Directors may also be engaged to provide limited consulting services outside their director responsibilities and receive fees for those services. Non-Executive Directors may also receive limited travel and/or hospitality related benefits in connection with the role. | No | | Non-Executive Director long-term incentive awards | To provide alignment with the interest of shareholders. | The Company has historically awarded share options to all employees and certain Non-Executive Directors in order to align long-term employee interests with those of shareholders, and this will be the case going forward for any new Non-Executive Directors. Notwithstanding anything to the contrary in the 2020 Plan, the value of all Awards awarded under this Plan and all other cash compensation paid by the Company to any Non-Employee Director in any calendar year for services as a Non-Employee Director shall not exceed £750,000. For the purpose of this limitation, the value of any Award shall be its grant date fair value, as determined in accordance with the Accounting Standards Codification (ACS) 718 Compensation – Stock Compensation or successor provision but excluding the impact of estimated forfeitures related to service-based vesting provisions. | No |
Statement of consideration of employees’ pay and remuneration conditions elsewhere in the Group
The Company does not formally consult with employees when drawing up the Policy. However, the Committee is made aware of employment conditions in the wider Group. The same broad principles apply to the Policy both for the Executive Directors and the wider employee population. However, the remuneration for the Executive Directors has a stronger emphasis on variable pay than for other employees. In particular, the following approach is used for the wider employee population in the Group: •Salaries, benefits and pensions are compared to appropriate market rates and set at approximately midmarketmid market level with allowance for role, responsibilities and experience. •When setting salary levels for the Executive Directors, the Committee considers the salary increases provided to other employees. •An annual bonus plan is available to all employees and is based on business and individual performance. Payments under the bonus plan are entirely discretionary.
ANNUAL REPORT ON REMUNERATION Single total figure of remuneration of each Director (audited). The Directors received the following remuneration for the years ended 31 December 31, 20202021 and 2021;2022;
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Base Salary | Bonus | Share-based payments | Other* | Total variable | Total fixed | Total | | | US $ | US $ | US $ | US $ | US $ | US $ | US $ | | George Goldsmith | 2021 | 584,658 | 321,562 | 415,538 | 37,304 | 321,562 | 1,037,500 | 1,359,062 | | 2020 | 453,936 | 234,743 | 567,911 | 34,113 | 234,743 | 1,055,960 | 1,290,703 | | Ekaterina Malievskaia | 2021 | 412,700 | 231,800 | 339,273 | 24,635 | 231,800 | 776,608 | 1,008,408 | | 2020 | 362,287 | 150,403 | 547,627 | 23,708 | 150,403 | 933,622 | 1,084,025 | | David York Norton | 2021 | 62,249 | — | 169,783 | — | — | 232,032 | 232,032 | | 2020 | 16,052 | — | 173,219 | — | — | 189,271 | 189,271 | | Florian Brand1 | 2021 | 13,119 | — | 87,609 | — | — | 100,728 | 100,728 | | 2020 | 10,944 | — | 11,119 | — | — | 22,063 | 22,063 | | Jason Camm2 | 2021 | — | — | (11,764) | — | — | (11,764) | (11,764) | | 2020 | 14,957 | — | 11,119 | — | — | 26,076 | 26,076 | | Annalisa Jenkins | 2021 | 66,032 | — | 169,835 | — | — | 235,867 | 235,867 | | 2020 | 17,511 | — | 176,835 | — | — | 194,346 | 194,346 | | Thomas Lönngren | 2021 | 49,535 | — | 205,092 | — | — | 254,627 | 254,627 | | 2020 | 13,133 | — | 248,321 | — | — | 261,454 | 261,454 | | Robert McQuade | 2021 | 60,529 | — | 166,155 | — | — | 226,684 | 226,684 | | 2020 | 16,052 | — | 11,119 | — | — | 27,171 | 27,171 | | Linda McGoldrick | 2021 | 62,077 | — | 111,116 | — | — | 173,193 | 173,193 | | 2020 | 16,417 | — | 15,609 | — | — | 32,026 | 32,026 | | Wayne Riley3 | 2021 | 38,531 | — | 96,716 | — | — | 135,247 | 135,247 | | 2020 | — | — | — | — | — | — | — | | Total | 2021 | 1,349,430 | 553,362 | 1,749,353 | 61,939 | 553,362 | 3,160,722 | 3,714,084 | | 2020 | 921,289 | 385,146 | 1,762,879 | 57,821 | 385,146 | 2,741,988 | 3,127,135 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Base Salary | Bonus | Share-based payments | Other* | Total variable remuneration | Total fixed remuneration | Total remuneration | | | US $ | US $ | US $ | US $ | US $ | US $ | US $ | | Kabir Nath | 2022 | 243,123 | 145,000 | — | — | 145,000 | 243,123 | 388,123 | | 2021 | — | — | — | — | — | — | — | | George Goldsmith (Executive Chairman) | 2022 | 179,843 | 123,642 | 37,355 | 17,994 | 123,642 | 235,192 | 358,834 | | George Goldsmith (CEO) | 2022 | 311,494 | 171,321 | 52,296 | 22,076 | 171,321 | 385,866 | 557,187 | | 2021 | 584,658 | 321,562 | 846,545 | 37,304 | 321,562 | 1,468,507 | 1,790,069 | | Ekaterina Malievskaia | 2022 | 378,563 | 163,549 | 89,651 | 25,802 | 163,549 | 494,016 | 657,565 | | 2021 | 412,700 | 231,800 | 739,056 | 24,635 | 231,800 | 1,176,391 | 1,408,191 | | David Norton | 2022 | 60,620 | — | 20,426 | — | — | 81,046 | 81,046 | | 2021 | 62,249 | — | 265,031 | — | — | 327,280 | 327,280 | | Florian Brand | 2022 | — | — | — | — | — | — | — | | 2021 | 13,119 | — | — | — | — | 13,119 | 13,119 | | Jason Camm | 2022 | — | — | — | — | — | — | — | | 2021 | — | — | — | — | — | — | — | | Annalisa Jenkins | 2022 | 59,382 | — | 47,601 | — | — | 106,983 | 106,983 | | 2021 | 66,032 | — | 302,913 | — | — | 368,945 | 368,945 | | Thomas Lonngren | 2022 | 45,692 | — | 47,601 | — | — | 93,293 | 93,293 | | 2021 | 49,535 | — | 258,663 | — | — | 308,198 | 308,198 | | Robert McQuade | 2022 | 54,434 | — | — | — | — | 54,434 | 54,434 | | 2021 | 60,529 | — | — | — | — | 60,529 | 60,529 | | Linda McGoldrick | 2022 | 56,290 | — | — | — | — | 56,290 | 56,290 | | 2021 | 62,077 | — | 81,691 | — | — | 143,768 | 143,768 | | Wayne Riley | 2022 | 46,393 | — | — | — | — | 46,393 | 46,393 | | 2021 | 38,531 | — | — | — | — | 38,531 | 38,531 | | Total | 2022 | 1,435,834 | 603,512 | 294,930 | 65,872 | 603,512 | 1,796,636 | 2,400,148 | | 2021 | 1,349,430 | 553,362 | 2,493,899 | 61,939 | 553,362 | 3,905,268 | 4,458,630 |
*Relates to health insurance, life assurance and income protection insurance i) The value of share-based payment awards to Directors is defined as the fairintrinsic value of the shares on the date of grant. For equity awards that vest based on a service condition, the share-based compensation expense is recognized on a straight-line basis over the requisite service period. This was a weighted average value of $18.43 per share in the year (2020: $10.75), meaningshares. The table reflects the total fair value of the options issuedshare-based expense recognised in 2021 was $2 million (2020: 1On May 14, 2021, Florian Brand resigned from the position of Director.
2On February 1, 2021, Jason Camm permanently waived any and all compensation which he was entitled to receive. Shares issued in 2020 were subsequently cancelled in 2021.
3Wayne Riley was appointed as Director, effective from March 31, 2021.2022.
$6 million). Note: the vesting of certain options accelerated upon completion of the IPO in accordance with the option grant terms which resulted in the recognition of a higher share-based compensation expense in 2020.
ii) No Director is currently in receipt of a pension contribution. Each Director is either not entitled to a pension payment or has opted out of receiving it. There are no payments made in lieu of pension entitlement. Illustrations of Base Case, Expected, and Maximum remuneration for the Executive Directors Scenarios (unaudited) The charts set out for illustrative purposes only, what annual remuneration the Company expects the Executive Directors to obtain as a base case, expected and maximum achievement of performance targets with respect to the year ending 31 December 2022.2023. The assumptions used in the calculations are set out below: | | | | | | | | | | 2022 | Chief Executive Officer | Chief Innovation Officer | | US $ | US $ | | Base salary | 585,108 | 413,017 | | Benefits | 37,304 | 24,635 | | FV of RSU's (granted on February 1, 2022) | 456,750 | 204,750 | | Base case | 1,079,162 | 642,402 | | Expected bonus (assumed at 100% of target) | 351,065 | 185,858 | | Expected case | 1,430,227 | 828,260 | | Maximum bonus (paid at 125% of target) | 438,831 | 232,322 | | Maximum bonus case | 1,517,993 | 874,724 | | Effect of 50% share price appreciation on share options (granted on February 1, 2022) | 1,362,375 | 590,625 | | 50% share price appreciation case | 2,880,368 | 1,465,349 |
| | | | | | | | | | | | | 2023 | Chief Executive Officer | Chairman | Chief Innovation Officer | | US $ | US $ | US $ | | Base salary | 594,500 | 96,824 | 370,352 | | Benefits | — | 40,070 | 25,802 | | Fair value of restricted share units (granted on 2 February 2023) | 273,420 | — | 126,945 | | Base case | 867,920 | 136,894 | 523,099 | | Expected bonus (assumed at 100% of target) | 356,700 | — | 166,658 | | Expected case | 1,224,620 | 136,894 | 689,757 | | Maximum bonus (paid at 125% of target) | 445,875 | — | 208,323 | | Maximum bonus case | 1,313,795 | 136,894 | 731,422 |
i)Base case: this illustration assumes fixed base case, as set out above. This illustration assumes no annual bonus; ii)Expected case: this illustration assumes the base case remuneration set out above, plus an annual bonus. We make the assumption that each Executive Director will receive the target annual bonus of 60% (2021: 55%) in the case of the Chief Executive Officer (2021: 60%) and 45% (2021: 45%) in the case of the Chief Innovation Officer of base salary, being $1,430,227$356,700 and $828,260$166,658 respectively; and
iii)Maximum bonus case: this illustration assumes the base case remuneration set out above, plus the maximum annual bonus of 125% x the target bonus percentage of base salary, being $1,517,993
$445,875 for the year in respect of the Chief Executive Officer and $874,724$208,323 for the year in respect of the Chief Innovation Officer. iv)50% share price appreciation case: this illustration assumes the base case remuneration set out above, plus the change in value of share options granted on 1 February 2022, if the share price appreciated by 50%, being $2,880,368 for the year in respect of the Chief Executive Officer and $1,465,349 for the year in respect of the Chief Innovation Officer.
The Group has used the exchange rate $0.7409:$0.8262:£1.00, the rate at 31 December 2021.
Annual performance bonus
In 20212022 the CEO, Executive Chairman (who served as CEO until 1 August 2022) and CIO’s annual bonus outcome of 100% of target for each, resulted in a total bonus pay out for the financial year ended 31 December 20212022 of 55%60% of the CEO’s base salary, 60% of the Executive Chair’s base salary and 45% of the
CIO’s base salary in each case for the period. The CIO was also awarded an additional bonus to increase the effective bonus percentage to 125% of the target. During a series of meetings in January and February 2022,2023, the Compensation and Leadership Development Committee evaluated achievement of the 20212022 corporate objectives and each Executive Director’s individual performance. The Compensation and Leadership Development Committee reviewed the following corporate goals and based on the results approved an overall average 100% achievement level of the 20212022 corporate objectives as the Company achieved its target goals. The goals were as follows: Corporate Goals and Achievements
•COMP360 for TRD: PrepareLaunched a phase III programme in TRD and phase II programmes in PTSD and anorexia nervosa; •Established a robust pipeline of new drug and technology assets to increase the value of COMPASS while demonstrating commitment to transforming mental health; •Prepared for a successful End of Phase IIb meeting and a promptscalable commercial launch of Phase III •Build out a portfolio of new indications for COMP360 new compounds, and technologies that have the potential to improve the safety, efficacy and accessibility of our therapies
•Position COMPASS as a leading mental health care company and fund future plans
•COMP360 for TRD: Prepare for a successful commercial launchtherapy that will ensure access for as many patients as possiblepossible; and
•DevelopDeveloped a talentedhigh-performing team and ana mission-driven organisation that makes rapid growth sustainable for employeescommitted to the highest standards of quality and compliance. Long term incentive awards during the year ended 31 December 2021.2022. During the 20212022 performance year, the Executive DirectorsMr Goldsmith and Ms Malievskaia were not awarded any furtheroptions and restricted share options or RSUs above whatunits ("RSUs") grants on 1 February 2022. Mr Nath was awarded in 2020.options and RSUs upon his hire date 1 August 2022. Payments to past Directors (audited) There were no payments to past Directors made during the financial year ending 31 December 2021 (2020:2022 (2021: nil). Payments for Loss of Office (audited)
There were no payments made to Directors for Loss of Office during the financial year ending 31 December 2021 (2020:2022 (2021: nil) and no such payments have been made in the period between 31 December 20212022 and the date of this report.
Statement of Directors’ Shareholding and Share Interests (audited) The Company does not have a formal policy on Executive or Non-Executive Director shareholdings. The table below details the total number of shares owned (including their beneficial interests), the total number of share options held, the number of share options vested but not yet exercised and the total number of restricted share units ("RSUs") held as at 31 December 20202021 and 31 December 2021,2022, respectively: | | | | | | | | | | | | | | | | | | | | | | | | | Shares | Share options | RSUs | | 2021 | Beneficially owned shares at 31 December 2021 | Total share options at 31 December 2021 | Unvested without performance conditions | Vested but unexercised | Total RSUs at 31 December 2021 | Unvested without performance conditions | Vested but unexercised | | Executive Directors | | George Goldsmith | 4,318,572 | 113,600 | 78,100 | 35,500 | 44,710 | 30,739 | — | | Ekaterina Malievskaia | 4,308,510 | 85,200 | 58,575 | 26,625 | 44,710 | 30,739 | — | | Non-Executive Directors | | David Norton | 127,984 | 147,404 | 26,839 | 120,565 | 23,740 | 16,321 | — | | Florian Brand | — | 5,396 | — | 5,396 | — | — | — | | Jason Camm | — | — | — | — | — | — | — | | Annalisa Jenkins | 113,054 | 132,474 | 26,839 | 105,635 | 23,740 | 16,321 | — | | Thomas Lonngren | 123,919 | 72,095 | 37,225 | 34,870 | — | — | — | | Robert McQuade | 1,600,523* | 33,584 | 27,738 | 5,846 | — | — | — | | Linda McGoldrick | 6,745 | 33,584 | 26,839 | 6,745 | — | — | — | | Wayne Riley | — | 24,000 | 24,000 | — | — | — | — |
*
| | | | | | | | | | | | | | | | | | | | | | | | | Shares | Share options | RSUs | | 2020 | Beneficially owned shares at 31 December 2020 | Total share options at 31 December 2020 | Unvested without performance conditions | Vested but unexercised | Total RSUs at 31 December 2020 | Unvested without performance conditions | Vested but unexercised | | Executive Directors | | George Goldsmith | 4,521,571 | 113,600 | 113,600 | | 44,710 | 44,710 | — | | Ekaterina Malievskaia | 4,521,571 | 85,200 | 85,200 | | 44,710 | 44,710 | — | | Non-Executive Directors | | David York Norton | 113,820 | 135,404 | 21,584 | 113,820 | 23,740 | 23,740 | — | | Florian Brand | — | 21,584 | 21,584 | — | — | — | — | | Jason Camm | 1,300 | 21,584 | 21,584 | — | — | — | — | | Annalisa Jenkins | 113,820 | 135,404 | 21,584 | 113,820 | 23,740 | 23,740 | — | | Thomas Lönngren | 122,227 | 60,095 | 37,906 | 22,189 | — | — | — | | Robert McQuade | — | 21,584 | 21,584 | — | — | — | — | | Linda McGoldrick | — | 21,584 | 21,584 | — | — | — | — |
| | | | | | | | | | | | | | | | | | | | | | | | | Shares | Share options | RSUs | | 2021 | Beneficially owned shares at 31 December 2021 | Total share options at 31 December 2021 | Unvested without performance conditions | Vested but unexercised | Total RSUs at 31 December 2021 | Unvested without performance conditions | Vested but unexercised | | Executive Directors | | George Goldsmith | 4,318,572 | 113,600 | 78,100 | 35,500 | 44,710 | 30,739 | — | | Ekaterina Malievskaia | 4,308,510 | 85,200 | 58,575 | 26,625 | 44,710 | 30,739 | — | | Non-Executive Directors | | David York Norton | 127,984 | 147,404 | 26,839 | 120,565 | 23,740 | 16,321 | — | | Florian Brand | — | 5,396 | — | 5,396 | — | — | — | | Jason Camm | — | — | — | — | — | — | — | | Annalisa Jenkins | 113,054 | 132,474 | 26,839 | 105,635 | 23,740 | 16,321 | — | | Thomas Lönngren | 123,919 | 72,095 | 37,225 | 34,870 | — | — | — | | Robert McQuade | 5,846 | 33,584 | 27,738 | 5,846 | — | — | — | | Linda McGoldrick | 6,745 | 33,584 | 26,839 | 6,745 | — | — | — | | Wayne Riley | — | 24,000 | 24,000 | — | — | — | — |
Includes 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Shares | Share options | RSUs | | | 2022 | Beneficially owned shares at 31 December 2022 | Total share options at 31 December 2022 | Unvested without performance conditions | Vested but unexercised | Total RSUs at 31 December 2022 | Unvested without performance conditions | Vested but unexercised | | | Executive Directors | | | Kabir Nath | — | 600,000 | 600,000 | — | 50,000 | 50,000 | — | | | George Goldsmith | 4,397,499 | 286,600 | 186,658 | 99,942 | 73,710 | 48,561 | — | | | Ekaterina Malievskaia | 4,349,794 | 160,200 | 96,650 | 63,550 | 57,710 | 32,561 | — | | | Non-Executive Directors | | | David Norton | 150,314 | 164,404 | 26,443 | 137,961 | 23,740 | 10,386 | — | | | Annalisa Jenkins | 135,384 | 149,474 | 26,443 | 123,031 | 23,740 | 10,386 | — | | | Thomas Lonngren | 149,137 | 89,095 | 30,894 | 58,201 | — | — | — | | | Robert McQuade | 1,618,818* | 50,584 | 27,342 | 23,242 | — | — | — | | | Linda McGoldrick | 25,040 | 50,584 | 26,443 | 24,141 | — | — | — | | | Wayne Riley | 11,500 | 45,250 | 34,750 | 10,500 | — | — | — | |
*Includes 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares.
The interests of the Directors in the Company’s share options and RSUs as at 31 December 20212022 is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Director | Date of grant | Price per Share ($) | Type | 01/01/2022 | Granted during the year | Exercised during the year | Vested in year | Cancelled during the period | 31/12/2022 | Date from which exercisable | Expiry date | | | Kabir Nath | 01/08/2022 | 14.94 | Option | — | 600,000 | — | — | — | 600,000 | 01/08/2022 | 31/07/2032 | | | 01/08/2022 | 0.01 | RSU | — | 50,000 | — | — | — | 50,000 | 01/08/2022 | 01/08/2026 | | | George Goldsmith | 18/09/2020 | 16.85 | Option | 113,600 | — | — | 28,400 | — | 113,600 | 18/09/2020 | 18/09/2030 | | | 01/02/2022 | 15.75 | Option | — | 173,000 | — | 36,042 | — | 173,000 | 01/02/2022 | 31/01/2032 | | | 30/06/2020 | 0.01 | RSU | 30,739 | — | — | 11,178 | — | 19,561 | 12/08/2020 | 01/08/2024 | | | 01/02/2022 | 0.01 | RSU | — | 29,000 | — | — | — | 29,000 | 01/02/2022 | 01/02/2026 | | | Ekaterina Malievskaia | 18/09/2020 | 16.85 | Option | 85,200 | — | — | 21,300 | — | 85,200 | 18/09/2020 | 18/09/2030 | | | 01/02/2022 | 15.75 | Option | — | 75,000 | — | 15,625 | — | 75,000 | 01/02/2022 | 31/01/2032 | | | 30/06/2020 | 0.01 | RSU | 30,739 | — | — | 11,178 | — | 19,561 | 12/08/2020 | 01/08/2024 | | | 01/02/2022 | 0.01 | RSU | — | 13,000 | — | — | — | 13,000 | 01/02/2022 | 01/02/2026 | | | David Norton | 20/07/2019 | 1.40 | Option | 99,049 | — | — | — | — | 99,049 | 05/05/2018 | 20/07/2029 | | | 30/03/2020 | 2.40 | Option | 14,771 | — | — | — | — | 14,771 | 05/05/2018 | 30/03/2030 | | | 18/09/2020 | 16.85 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 18/09/2020 | 18/09/2030 | | | 01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | | | 16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | | | 30/06/2020 | 0.01 | RSU | 16,321 | — | — | 5,935 | — | 10,386 | 12/08/2020 | 01/08/2024 | | | Annalisa Jenkins | 20/07/2019 | 1.40 | Option | 84,119 | — | — | — | — | 84,119 | 01/06/2018 | 20/07/2029 | | | 30/03/2020 | 2.40 | Option | 14,771 | — | — | — | — | 14,771 | 01/06/2018 | 30/03/2030 | | | 18/09/2020 | 16.85 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 18/09/2020 | 18/09/2030 | | | 01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | | | 16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | | | 30/06/2020 | 0.01 | RSU | 16,321 | — | — | 5,935 | — | 10,386 | 12/08/2020 | 01/08/2024 | | | Thomas Lonngren | 30/03/2020 | 0.01 | Option | 14,771 | — | — | — | — | 14,771 | 18/05/2018 | 30/03/2030 | | | 30/06/2020 | 0.01 | Option | 23,740 | — | — | 5,935 | — | 23,740 | 30/06/2020 | 30/06/2030 | | | 18/09/2020 | 16.85 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 18/09/2020 | 18/09/2030 | | | 01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | | | 16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | | | Robert McQuade | 23/11/2020 | 32.66 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 23/11/2020 | 22/11/2030 | | | 01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | | | 16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | | | Linda McGoldrick | 18/09/2020 | 17.05 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 18/09/2020 | 18/09/2030 | | | 01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | | | 16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | | | Wayne Riley | 31/03/2021 | 35.25 | Option | 24,000 | — | — | 10,500 | — | 24,000 | 31/03/2021 | 30/03/2031 | | | 16/06/2022 | 9.44 | Option | — | 21,250 | — | — | — | 21,250 | 16/06/2022 | 15/06/2032 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Director | Date of grant | Price Per Share ($) | Type | 01/01/2021 | Granted during the year | Exercised during the year | Vested in year | Cancelled during the period | 31/12/2021 | Date from which exercisable | Expiry date | | George Goldsmith | 18/09/2020 | 10.03 | Option | 113,600 | — | — | 35,500 | — | 113,600 | 18/09/2020 | 18/09/2030 | | 30/06/2020 | 10.15 | RSU | 44,710 | — | — | 13,971 | — | 30,739 | 12/08/2020 | 01/08/2024 | | Ekaterina Malievskaia | 18/09/2020 | 10.03 | Option | 85,200 | — | — | 26,625 | — | 85,200 | 18/09/2020 | 18/09/2030 | | 30/06/2020 | 10.15 | RSU | 44,710 | — | — | 13,971 | — | 30,739 | 12/08/2020 | 01/08/2024 | | David York Norton | 20/07/2019 | 1.50 | Option | 99,049 | — | — | — | — | 99,049 | 05/05/2018 | 20/07/2029 | | 30/03/2020 | 4.11 | Option | 14,771 | — | — | — | — | 14,771 | 05/05/2018 | 30/03/2030 | | 18/09/2020 | 10.03 | Option | 21,584 | — | — | 6,745 | — | 21,584 | 18/09/2020 | 18/09/2030 | | 01/10/2021 | 17.43 | Option | — | 12,000 | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | | 30/06/2020 | 10.15 | RSU | 23,740 | — | — | 7,419 | — | 16,321 | 12/08/2020 | 01/08/2024 | | Florian Brand | 23/11/2020 | 19.56 | Option | 21,584 | — | — | — | 21,584 | — | 23/11/2020 | 22/11/2030 | | 14/05/2021 | 18.83 | Option | — | 5,396 | — | 5,396 | — | 5,396 | 14/05/2021 | 22/11/2030 | | Jason Camm | 23/11/2020 | 19.56 | Option | 21,584 | — | — | — | 21,584 | — | 23/11/2020 | 22/11/2030 | | Annalisa Jenkins | 20/07/2019 | 1.50 | Option | 99,049 | — | 14,930 | — | — | 84,119 | 01/06/2018 | 20/07/2029 | | 30/03/2020 | 4.11 | Option | 14,771 | — | — | — | — | 14,771 | 01/06/2018 | 30/03/2030 | | 18/09/2020 | 10.03 | Option | 21,584 | — | — | 6,745 | — | 21,584 | 18/09/2020 | 18/09/2030 | | 01/10/2021 | 17.43 | Option | — | 12,000 | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | | 30/06/2020 | 10.15 | RSU | 23,740 | — | — | 7,419 | — | 16,321 | 12/08/2020 | 01/08/2024 | | Thomas Lönngren | 30/03/2020 | 5.56 | Option | 14,771 | — | — | — | — | 14,771 | 18/05/2018 | 30/03/2030 | | 30/06/2020 | 10.15 | Option | 23,740 | — | — | 5,935 | — | 23,740 | 30/06/2020 | 30/06/2030 | | 18/09/2020 | 10.03 | Option | 21,584 | — | — | 6,745 | — | 21,584 | 18/09/2020 | 18/09/2030 | | 01/10/2021 | 17.43 | Option | — | 12,000 | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | | Robert McQuade | 23/11/2020 | 19.56 | Option | 21,584 | — | — | 5,846 | — | 21,584 | 23/11/2020 | 22/11/2030 | | 01/10/2021 | 17.43 | Option | — | 12,000 | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | | Linda McGoldrick | 18/09/2020 | 10.15 | Option | 21,584 | — | — | 6,745 | — | 21,584 | 18/09/2020 | 18/09/2030 | | 01/10/2021 | 17.43 | Option | — | 12,000 | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | | Wayne Riley | 31/03/2021 | 21.45 | Option | — | 24,000 | — | — | — | 24,000 | 31/03/2021 | 30/03/2031 |
All options are subject to service rather than performance conditions. The options vestedvest monthly over 4 years with a 1 year 25% cliff for those granted after September 2020 and with a 25% cliff on the earlier of 1 year and IPO for the June 2020 grants. Awards granted in March 2020 vested fully upon IPO.
Awards granted prior to March 2020 had fully vested prior to IPO. RSU awards granted in February 2022 vest 25% per year for 4 years, and the options granted at that time vest monthly over 4 years. Mr Nath’s option grant awards vest over 4 years with a 1 year 25% cliff and his RSU awards vest 25% per year for 4 years. For the Non-Executive Officers, the options awarded on 1 October 2021 vested 100% after one year and the options awarded on 16 June 2022 vest upon the earlier of the one-year anniversary of the date of grant or the date of the 2023 annual general meeting of shareholders.
The beneficial and non-beneficial interests in the Company’s shares of the Directors and their families were as follows: | | | | | | | | | | NAME OF BENEFICIAL OWNER | ORDINARY SHARES BENEFICIALLY OWNED AT 31 December 2021 | | NUMBER | PERCENT | | Directors | | George Goldsmith | 4,318,572 | 10.3% | | Ekaterina Malievskaia | 4,308,510 | 10.3% | | Non-Executive Directors | | David York Norton | 127,984 | * | | | | | Jason Camm | — | — | | Annalisa Jenkins | 113,054 | * | | Thomas Lönngren | 123,919 | * | | Robert McQuade | 5,846 | * | | Linda McGoldrick | 6,745 | * | | Wayne Riley | — | — |
| | | | | | | | | | NAME OF BENEFICIAL OWNER | ORDINARY SHARES BENEFICIALLY OWNED AT 31 DECEMBER 2022 | | NUMBER | PERCENT | | Directors | | George Goldsmith | 4,397,499 | 10.3% | | Ekaterina Malievskaia | 4,349,794 | 10.2% | | Non-Executive Directors | | David Norton | 150,314 | * | | Annalisa Jenkins | 135,384 | * | | Thomas Lonngren | 149,137 | * | | Robert McQuade | 1,618,818** | 3.8% | | Linda McGoldrick | 25,040 | * | | Wayne Riley | 11,500 | * |
*Represents beneficial ownership of less than one percent.
**Includes 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission, or SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities and include ordinary shares that can be acquired within 60 days of 31 December 2021.2022. *Represents beneficial ownership of less than one percent.
Total Shareholder Return
The graph below shows the Company’s performance, measured by total shareholder return, for the Company’s American Depositary Shares (“ADSs”ADSs”), which are listed on Nasdaq and each representing one of the Company’s ordinary shares against the Nasdaq Composite Index (Nasdaq: CMPS vs NBI). TheNCI) and the Nasdaq Biotech Index has been(Nasdaq: CMPS vs NBI). We have selected these indices for this comparison because the Company has been admitted to trading on the Nasdaq exchange and it is consideredoperates as a Biotech and we consider them to be the most suitable comparator index.
indices.
Chief Executive Officer total remuneration history
2020 was the first year that the Company prepared a Remuneration Report. We have taken the exemption not to disclose 5 years of history of remuneration and have chosen to disclose remuneration history for 2020 onwards. Percentage change in remuneration of the Executive and Non-Executive Directors
The year on year movement to 31 December 2021 of CEO, CIO and Non-Executive Directors pay versus that of employees is disclosed in the table below. | | | | | | | | | | | | | Change in pay between 31 December 2021 and 31 December 2020 | | Salary | Annual Bonus | Benefits | | CEO % change | 29 | % | 37 | % | 9 | % | | CIO % change | 14 | % | 54 | % | 4 | % | | David Norton | 288 | % | n/a | n/a | | Jason Camm | n/a | n/a | n/a | | Annalisa Jenkins | 277 | % | n/a | n/a | | Thomas Lonngren | 277 | % | n/a | n/a | | Robert McQuade | 277 | % | n/a | n/a | | Linda McGoldrick | 278 | % | n/a | n/a | | Wayne Riley | n/a | n/a | n/a | | Employees % change | 17 | % | 29 | % | 36 | % | | | | |
| | | | | | | | | | | | | Salary | Annual Bonus (1) | Benefits (1) | | CEO % change | 29 | % | 37 | % | 9 | % | | CIO % change | 14 | % | 54 | % | 4 | % | | David Norton (2) | 288 | % | n/a | n/a | | Jason Camm (3) | n/a | n/a | n/a | | Annalisa Jenkins (2) | 277 | % | n/a | n/a | | Thomas Lonngren (2) | 277 | % | n/a | n/a | | Robert McQuade (2) | 277 | % | n/a | n/a | | Linda McGoldrick (2) | 278 | % | n/a | n/a | | Wayne Riley (4) | n/a | n/a | n/a | | Employees % change | 17 | % | 29 | % | 36 | % |
(1)
The year on year movement to 31 December 2022 of CEO, Executive Chairman, CIO and Non-Executive Directors pay versus that of employees is disclosed in the table below. | | | | | | | | | | | | | | | | | | | | | | Change in pay between 31 December 2022 and 31 December 2021 | | | | | Salary | Annual Bonus (1) | Benefits (1) | | | | | CEO % change (2)* | (1) | % | 6 | % | (100) | % | | | | | CEO % change (2)** | (8) | % | (2) | % | 7 | % | | | | | Executive Chairman % change (2) | 100 | % | 100 | % | 100 | % | | | | | CIO % change | (8) | % | (29) | % | 5 | % | | | | | David Norton | (3) | % | n/a | n/a | | | | | Annalisa Jenkins | (10) | % | n/a | n/a | | | | | Thomas Lonngren | (8) | % | n/a | n/a | | | | | Robert McQuade | (10) | % | n/a | n/a | | | | | Linda McGoldrick | (9) | % | n/a | n/a | | | | | Wayne Riley (3) | 20 | % | n/a | n/a | | | | | Employees % change | (37) | % | (27) | % | (19) | % | | | |
*Represents Kabir Nath *Represents George Goldsmith
1.None of the Non-Executive Directors are eligible for an annual bonus and none claimed any benefits during the year. (2)David Norton, Annalisa Jenkins, Thomas Lonngren, Robert McQuade2.During 2022, Kabir Nath joined as our Chief Executive Officer, effective 1 August 2022 and Linda McGoldrick joined the BoardGeorge Goldsmith transitioned to Executive Chair. The remuneration received by Mr. Nath and Mr Goldsmith in 2020 and2022 in respect of their roles as CEO were full annual amounts, therefore for comparison purposes, the remuneration received in 20202022 as CEO was notpro-rated as a full annual amount.result and was compared to Mr. Goldsmith's remuneration for the year ended 31 December 2021.
(3) On 1 February 2021, Jason Camm permanently waived any and all compensation which he was entitled to receive.
(4) 3.Wayne Riley joined the Board in 2021 and the remuneration received in 2021 was not a full annual amount.
4.Year over year decreases in average salary are the result of fluctuations in foreign currency exchange rates and as a result of the hire of additional employees at lower pay bands.
Relative importance of spend on pay
The Committee considers the Company’s research and development expenditure relative to remuneration expenditure for all employees, to be the most appropriate metric for assessing overall spend on pay due to the nature and stage of the Company’s business. Dividend distribution comparators have not been included as the Company has no history of such transactions. The graph below illustrates the gross remuneration to all employees compared to research and development expenditure in 20212022 and in 2020 post IPO (18 September 2020 to 31 December 2021).2021. The Committee notes that research and development expenditure may increase in future years as the Company continues to progress its COMP360 psilocybin therapy into later stage clinical trials for the treatment of TRD and into trials for other indications, as well as developing other neuropsychiatric therapies.
Structure and Role of Committee and Approach to Remuneration Matters The Committee is comprised of Annalisa Jenkins, who chairs the Committee, David York Norton and Wayne Riley. The constitution of the Committee is in compliance with Nasdaq requirements. The members of the Committee are Independent Directors as defined in Rule 10A-310C-1 under the US Securities Exchange Act of 1934.1934 and under applicable NASDAQ listing rules.
It is the Board's belief that good corporate governance is integral to a successful business and the Company finds instructive the standards of corporate governance prescribed by the Corporate Governance Code for Small and Mid-Size Quoted Companies from The Quoted Companies Alliance (the “QCA Code”“QCA Code”). The Board believes that this corporate governance framework is an appropriate guide for the Company, having regard to its size and nature.
The Committee’s approach to remuneration matters is to enable the Company to attract and retain talent, incentivizeincentivise long-term value generation and effectively manage the Company’s cash resources. It is the belief of the Committee that this is best achieved through a greater emphasis on variable rather than fixed remuneration, comprised of a mix of base salary and benefits, along with the flexibility to appropriately reward and incentivizeincentivise with variable pay and longer term incentives, as described within the Policy. When applying the Policy to Executive Directors, the Committee seeks to comply with the QCA Code so far as it is practical to do so, having regard to the size, nature and business requirements of the Company. Operation of the Policy will largely be compliant with the remuneration elements of the QCA Code, but we are aware that in certain instances we will differ from the QCA Code. These instances reflect differences in US market practice when compared to the UK, and the need to balance our governance obligations against the importance of offering competitive remuneration packages in the markets in which we compete and operate. The terms of reference of the Committee can be found on our website at www.compasspathways.com. External advice During the year, the Company engaged Aon Solutions UK Limited (Aon) to support management and the Committee with advice on remuneration matters, in particular peer-group benchmarking of Director and Senior Management remuneration and the grant of long term equity incentives under the 2020 Plan that became effective on the day prior to the listing of our ADSs on Nasdaq. The consultants were appointed by the Committee. The Company also engaged Aon to support management in the valuation of option awards granted under the 2020 Plan. The Committee is satisfied that Aon provides independent and objective advice, as Aon is a leading global professional services firm and the boardBoard confirm no conflicts of interest before each meeting. During 20212022 fees of $76,957 (2020: $82,500)$213,826 (2021: $76,957) were paid to Aon Consulting Inc.Solutions UK Limited (Aon).
Proposed Application of the Policy for the Year Ending 31 December 20222023 CEO remuneration i)Fixed elements of remuneration With effect from 1 January 2022,2023, the base salary of George GoldsmithKabir Nath in his role as Chairman and Chief Executive Officer (CEO) and Executive Director of the Company is £433,500 ($585,108)$594,500 (£491,201) per annum. ii)Variable elements of remuneration - Short-term incentives The target bonus for Mr. GoldsmithNath for the 20222023 performance year will be 60% of base salary. Benchmarking the CEO bonus against peers identified it would be appropriate to increase the target bonus to 60% (2021: 55%). The performance objectives for Mr. GoldsmithNath against which the Committee will determine the annual bonus were approved by the Board in February 2021.2023. The detail behind the performance objectives is currently considered to be commercially sensitive as they relate to the strategy that the Company intends to take with respect to the advancement of the COMP360 clinical development program and the Company’s financial and commercial goals. To the extent that the objectives do not comprise commercially sensitive information, the Company expects to disclose both the objectives and performance against those objectives in next year’s Remuneration Report. iii)Long-term incentive awards Long term incentives for 20222023 were awarded on 12 February 2022.2023. The Company awards share options to all employees in order to align long-term employee interests with those of shareholders. On 2 February 2023, the Company awarded Mr. Nath 153,900 share options and 25,200 restricted share units. Chairman remuneration i)Fixed elements of remuneration
With effect from 1 January 2023, the base salary of George Goldsmith in his role as non- Executive Chairman of the Company is £80,000 ($96,824) per annum. ii)Long-term incentive awards Mr Goldsmith will be awarded 25,500 options at the 2023 AGM for his role as Chairman.
CIO remuneration
i) Fixed elements of remuneration With effect from 1 January 2022,2023, the base salary of Ekaterina Malievskaia in her role as Chief Innovation Officer (CIO) and Executive Director of the Company is £306,000 ($413,017)370,352) per annum. ii) Variable elements of remuneration - Short-term incentives The target bonus for Dr Malievskaia for the 20212023 performance year will be 45% of base salary. The performance objectives for Dr Malievskaia against which the Committee will
determine the annual bonus were approved by the Board in February 2021.2023. The detail behind the performance objectives is currently considered to be commercially sensitive as they relate to the strategy that the Company intends to take with respect to the advancement of the COMP360 clinical development program and the Company’s financial and commercial goals. To the extent that the objectives do not comprise commercially sensitive information, the Company expects to disclose both the objectives and performance against those objectives in next year’s Remuneration Report. iii) Long-term incentive awards Long term incentives for 20222023 were awarded on 12 February 2022.2023. The Company awards share options to all employees in order to align long-term employee interests with those of shareholders.
On 2 February 2023, the Company awarded Dr. Malievskaia 67,500 share options and 11,700 restricted share units.
Chairman and Non-Executive Director fees (audited) Chairman fees GeorgeMr Goldsmith serves as both Chairman and CEO and does not receive any additional remuneration in respect of his role as Chair.chair other than the total amounts disclosed above.
Non-Executive Director cash fees Non-Executive Directors are paid a basic fee. In addition to the basic fee, committee fees may be paid for chairing or membership of a Board committee. Non-Executive Director fees were reviewed in 2021.2022. Non-Executive Directors are eligible to receive the following annual fees:
| | | | | | | | | | | | 2021
($) | 2020
($) | | Annual Retainer for Board Membership*: | | 41,270 | 38,524 | | Additional Annual Retainer for Lead Independent Director: | | 20,635 | 12,841 | | Additional Retainers for Committee Membership: | | | | | Audit and Risk Committee Chair: | | 16,508 | 15,410 | | Audit and Risk Committee member: | | 8,254 | 7,705 | | Compensation and Leadership Development Committee Chair: | | 11,005 | 10,273 | | Compensation and Leadership Development Committee member: | | 5,503 | 5,137 | | Nominating and Corporate Governance Committee Chair: | | 9,630 | 7,705 | | Nominating and Corporate Governance Committee member: | | 4,815 | 3,852 | | Innovation and Research Committee Chair: | | 11,005 | 10,273 | | Innovation and Research Committee member: | | 5,503 | 5,137 |
| | | | | | | | | | | | 2022
($) | 2021
($) | | Annual Retainer for Board Membership*: | | 37,114 | 41,270 | | Additional Annual Retainer for Lead Independent Director: | | 18,557 | 20,635 | | Additional Retainers for Committee Membership: | | | | | Audit and Risk Committee Chair: | | 14,846 | 16,508 | | Audit and Risk Committee member: | | 7,423 | 8,254 | | Compensation and Leadership Development Committee Chair: | | 9,897 | 11,005 | | Compensation and Leadership Development Committee member: | | 4,949 | 5,503 | | Nominating and Corporate Governance Committee Chair: | | 8,660 | 9,630 | | Nominating and Corporate Governance Committee member: | | 4,330 | 4,815 | | Innovation and Research Committee Chair: | | 9,897 | 11,005 | | Innovation and Research Committee member: | | 4,949 | 5,503 |
* for general availability and participation in meetings and conference calls of our Board of Directors, to be paid monthly, pro-rated based on the number of actual days served by the directorDirector during such calendar month. **Year over year decreases in salary are the result of fluctuations in foreign currency exchange rates rather than actual decreases in compensation paid in GBP. Note: Chair and committee member retainers are in addition to retainers for members of the Board of Directors. In accordance with the Company's Articles of Association, Directors are allocated into one of three classes. Each class of directorsDirectors serves a staggered three-year term. At each annual general meeting, the successors of directorsDirectors whose terms then expire will be elected to serve from the time of election and
qualification until the third annual meeting following election. Directors of the class retiring at the annual general meeting shall be eligible for re-appointment by ordinary resolution at such annual general meeting. The Company’s Class I directorsDirectors are David York Norton, Ekaterina Malievskaia and Wayne
Riley, allwhom were re-elected at the 2021 annual general meeting. The Company’s Class II Directors are Kabir Nath (who was appointed in August 2022 and therefore will stand for re-election at the 2023 annual general meeting), Robert McQuade and Thomas Lönngren, each of whom were re-elected at last year's annual general meeting. The Company’s Class II directors are Jason Camm, Robert McQuade and Thomas Lönngren, each of whom shall be eligible for re-appointment at this year's annual general meeting. The Company’s Class III directorsDirectors are Annalisa Jenkins, George Goldsmith and Linda McGoldrick, each of whom shall be eligible for re-electionre- election at the 2023 annual general meeting. Pursuant to our Articles of Association, if the directorDirector eligible for re-election does not seek re-election and no other directorDirector is elected to fill their respective position(s), they shall be re-elected by default if the relevant directorDirector is willing to do so.
Details of Directors’ service contracts or letters of appointment for the year ended 31 December 20212022 are as follows: | | | | | | | | | | Director | Executive/NED | Date of contract | | Kabir Nath | Executive | 01 August 2022 | | George Goldsmith | Executive | 15 September 202001 August 2022 | | Ekaterina Malievskaia | Executive | 17 September 2020 | | David York Norton | NED | 14 September 2020 | | | | Jason Camm | NED | 2 March 2020 | | Annalisa Jenkins | NED | 14 September 2020 | | Thomas Lönngren | NED | 15 September 2020 | | Robert McQuade | NED | 25 March 2021 | | Linda McGoldrick | NED | 14 September 2020 | | Wayne Riley | NED | 31 March 2021 |
The information in this part of the Remuneration Report is not subject to audit. Directors’ Remuneration Policy This remuneration policy was approved by shareholders in a binding vote at the AGM held on 22 June 2021.
Statement of consideration of shareholder views The Compensation and Leadership Development Committee will consider any shareholder feedback received and ongoing shareholder feedback throughout the year, when reviewing and applying the Policy each year.
The broad topics discussed with shareholders in 20212022 include peer groups and appropriate jurisdiction for benchmarking directorsDirectors remuneration.
The guidance from shareholder representative bodies is also considered on an ongoing basis. More specifically,The Committee submits a its U.K. Statutory Directors’ annual report on remuneration for a non-binding, advisory vote of shareholders at its annual general meeting of shareholders. At the 2022 annual general meeting of shareholders, 88.1% of shareholders voted in favor of the proposal to receive and approve, as a non-binding advisory resolution, the U.K. Statutory Directors’ Remuneration Report for the year ended 31 December 2021, with 0.1% voted against and 11.8% withheld from such proposal. Although non-binding, the Compensation and Leadership Development Committee will consult with major shareholdersreview and consider the voting results when proposing any significant changes to the Policy in the future.making future decisions regarding our Director remuneration program. The attendees of the Compensation and Leadership Development Committee meetings in 20212022 were as follows: | | | | | | | Director | Attendance | George Goldsmith | 5 of 5 | | Jason Camm* | 23 of 53 | David York NortonNorton** | 5 of 56 | | Annalisa Jenkins | 56 of 56 | Wayne Riley**Riley | 26 of 26 |
*Jason Camm attended 23 of 3 meetings prior to stepping down from the Board effective 16 June 2022. **David York Norton attended 5 of 6 meetings due to scheduling conflicts. **Wayne Riley attended every meeting after joining the Compensation and Leadership Development Committee.
FORM OF PROXY FOR ORDINARY SHAREHOLDERS
000) | Fees | December 31,
2022
(
(1) “Audit Fees” consist of fees billed for the audit of our annual consolidated financial statements and statutory accounts. (2) “Audit-related” fees consist of fees in connection with the review of our interim consolidated financial statements. (3) “Tax Fees” consist of fees billed for tax planning advice in respect of intercompany arrangements and structuring in connection with both our initial public offering (“IPO”) and ongoing operations. (4) “All Other Fees” consist of non-audit fees paid to PwC for advisory services in relation to fundraising F-3 shelfand registration and Environmental, Social and Governance landscaping.statements filed with the SEC.
The Audit and Risk Committee has determined that the rendering of non-audit services by PwC is compatible with maintaining the principal accountant’s independence. Pre-Approval Procedures The Audit and Risk Committee pre-approves all audit and permissible non-audit services provided by the independent registered certified public accounting firm unless an exception to such pre-approval exists under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or the rules of the SEC. These services may include audit services, audit-related services, tax services and other services. Our Audit and Risk Committee has pre-approved all services performed by the independent registered public accounting firm since the pre-approval policy was adopted prior to our initial public offering.
REQUIRED VOTE
REQUIRED VOTE
The ratification of the selection of PwC as our independent registered public accounting firm requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. This vote is advisory and non-binding. Abstentions and broker non-votes, if any, will have no effect on this proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board of Directors recommends that the shareholders vote “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022.2023.
PROPOSAL 5—7—AUTHORIZATION FOR THE AUDIT AND RISK COMMITTEE TO DETERMINE THE AUDITORS’ REMUNERATION FOR THE FISCAL YEAR ENDING DECEMBER 31, 20222023 Proposal 57 authorizes the Audit and Risk Committee to determine our auditors’ remuneration for the fiscal year ending December 31, 2022.2023. Fees for PwC, our independent registered public accounting firm and our statutory auditor, in respect of the years ended December 31, 20212022 and December 31, 2020,2021, are set forth in Proposal 46 above. The Audit and Risk Committee is directly responsible for the appointment, retention and termination, and for determining the compensation of the Company’s independent registered public accounting firm. The Audit and Risk Committee shall pre-approve all auditing services and the terms thereof and non-audit services (other than non-audit services prohibited under Section 10A(g) of the Exchange Act or the applicable rules of the SEC or the Public Company Accounting Oversight Board (“PCAOB”)), except that pre-approval is not required for the provision of non-audit services if the “de minimis” provisions of Section 10A(i)(1)(B) of the Exchange Act are satisfied. The Audit and Risk Committee may delegate to the chairperson of the Audit and Risk Committee the authority to grant pre-approvals for audit and non-audit services, provided such approvals are presented to the Audit and Risk Committee at its next scheduled meeting. All services provided by PwC during fiscal year 20212022 were pre-approved by the Audit and Risk Committee in accordance with the pre-approval policy described above, and all audit-related fees, tax fees and other fees during the fiscal year 20212022 were approved by the Audit and Risk Committee. REQUIRED VOTE The authorization of the Audit and Risk Committee to determine auditor remuneration requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, will have no effect on this proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board of Directors recommends that the shareholders vote “FOR” the authorization of our Audit and Risk Committee to determine our auditors’ remuneration for the fiscal year ending December 31, 2022.2023.
PROPOSAL 6—8—RESOLUTION TO RECEIVE THE COMPANY’S U.K. STATUTORY ANNUAL ACCOUNTS AND REPORTS
At the Meeting, our Board will present our U.K. statutory annual accounts and reports for the period January 1, 20212022 through December 31, 2021,2022, which includes the audited portion of the directors’ annual report on remuneration. REQUIRED VOTE The receipt of the U.K. statutory annual accounts and reports requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, will have no effect on this proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board of Directors recommends that the shareholders vote “FOR” the resolution to receive our U.K. statutory annual accounts and reports.
PROPOSAL 7—9—APPROVAL OF OUR U.K. STATUTORY DIRECTORS’ ANNUAL REPORT ON REMUNERATION Our U.K. statutory directors’ remuneration report is set forth as Annex A to this Proxy Statement. The directors’ remuneration report includes the annual report on remuneration. This document describes in detail our remuneration policies and procedures and explains how these policies and procedures help to achieve our compensation objectives with regard to our directors and the retention of high-quality directors. Our Board of Directors and our Compensation and Leadership Development Committee believe that the policies and procedures as articulated in the directors’ remuneration report are effective and that as a result of these policies and procedures we have and will continue to have high-quality directors. Our Board of Directors has approved and signed the report in accordance with English law. At the Meeting, the shareholders will vote on the annual report on remuneration. This vote is advisory and non-binding. Although non-binding, our Board and Compensation and Leadership Development Committee will review and consider the voting results when making future decisions regarding our director remuneration program. Following the Meeting, and as required under English law, the directors’ annual report on remuneration will be delivered to the U.K. Registrar of Companies. REQUIRED VOTE The approval of our U.K. statutory directors’ annual report on remuneration requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. This vote is advisory and non-binding. Abstentions and broker non-votes, if any, will have no effect on this proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board of Directors recommends that the shareholders vote “FOR” approval of our U.K. statutory directors’ annual report on remuneration set forth in Annex A.
PROPOSAL 8— NON-BINDING, ADVISORY VOTE ON THE FREQUENCY OF FUTURE VOTES ON EXECUTIVE COMPENSATION The Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended, and Section 14A of the Exchange Act enable our shareholders to vote, on a non-binding, advisory basis, for their preference as to how frequently we should hold future votes on an advisory, non-binding basis to approve the compensation of our named executive officers, also known as a “Say-on-Pay” proposal. We are asking our shareholders whether our future Say-on-Pay votes should occur every one, two, or three years. Shareholders may also abstain from voting.
This vote is advisory and non-binding. However, our Board and Compensation and Leadership Development Committee value the opinions of our shareholders and will review and consider the voting results when making future decisions regarding the frequency of votes on the compensation of our named executive officers.
Currently, the Board believes that it is in the best interests of the Company and our shareholders to hold a Say-on-Pay vote every year, and this is the frequency recommended by our Board. We believe this frequency will enable our shareholders to vote, on a non-binding,advisory basis, on our most recent executive compensation practices and decisions as presented in our annual proxy statements, which will lead to greater transparency and more meaningful and timely communication between the Company and our shareholders regarding the compensation of our named executive officers. Accordingly, we ask our shareholders to indicate their preferred voting frequency by voting for every “one year,” “two years,” or “three years” (or abstaining from voting) in response to the following resolution at the Meeting:
“RESOLVED, to approve, on a non-binding, advisory basis, the alternative of every one year, two years, or three years as the preferred frequency with which the Company is to hold an advisory vote on the compensation of the Company’s named executive officers and the frequency that receives the highest number of votes cast by shareholders in person or by proxy at the AGM will be deemed the preferred frequency.”
REQUIRED VOTE
The Ordinary Shareholder Proxy Form provides shareholders with the opportunity to vote on one of three options with respect to this proposal (for the approval of holding the vote every year, for holding the vote every two years or for holding the vote every three years). These options are included in sub-resolutions 8a, 8b and 8c on the Ordinary Shareholder Proxy Form. If a shareholder votes on more than one of this proposal's sub-resolutions on the Ordinary Shareholder Proxy Form, his or her vote will be deemed invalid and will not be counted on the matter. The ADS Proxy Card provides the holders of ADSs with the opportunity to choose among four options with respect to this proposal (holding the vote every one, two, or three years, or abstaining). The option that receives the highest number of votes from the voting power present in person or by proxy at the Meeting and entitled to vote thereon will be deemed to be the frequency preferred by our shareholders. Abstentions and broker non-votes will have no effect on this proposal.
RECOMMENDATION OF THE BOARD OF DIRECTORS
Our Board of Directors recommends that the shareholders vote “FOR” the proposal that future, non-binding advisory votes on the compensation of our named executive officers occur every year.
PROPOSAL 9—10—ADVISORY (NON-BINDING) VOTE TO APPROVE THE COMPANY’S EXECUTIVE COMPENSATION
Section 14A of the Exchange Act requires that we provide our shareholders with the opportunity to vote to approve, on a non-binding, advisory basis, not less frequently than once every three years, the compensation of our named executive officers as disclosed in this Proxy Statement in accordance withofficers. Based on the compensation disclosure rulesvoting results of the SEC.vote on the frequency of future votes on executive compensation at our 2022 Annual General Meeting of Shareholders (the "2022 AGM"), our Board has determined that an advisory vote by the shareholders regarding named executive officer compensation will be conducted on an annual basis. Our compensation programs are designed to effectively align our executives’ interests with the interests of our shareholders by focusing on long-term equity incentives that correlate with the growth of sustainable long-term value for our shareholders. Shareholders are urged to read the section titled “ExecutiveCompensation Discussion and Analysis” in this Proxy Statement, which discusses how our executive compensation policies and practices implement our compensation philosophy and contains tabular information and narrative discussion about the compensation of our named executive officers in conjunction withfor the section titled “Named Executive Officer Compensation,” which provides additional information on the 2021 compensation of our Named Executive Officers.year ended December 31, 2022. Our Board and our Compensation and Leadership Development Committee believe that these policies and practices are effective in implementing our compensation philosophy and in achieving our compensation program goals. The vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the compensation of our named executive officers, as described in this Proxy Statement in accordance with the compensation disclosure rules of the SEC. Accordingly, we are asking our shareholders to vote on the following resolution at the Meeting: RESOLVED, that the shareholders hereby approve, on a non-binding advisory basis, the compensation paid to the Company’s named executive officers, as disclosed in the Company’s Proxy Statement for the 20222023 Annual General Meeting, pursuant to the compensation disclosure rules of the SEC, including the Executive Compensation Discussion and Analysis,section, the compensation tables and the narrative discussions that accompany the compensation tables. REQUIRED VOTE The approval of this advisory non-binding proposal requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, will have no effect on this proposal. The vote is advisory, which means that the vote is not binding on the Company, our Board or our Compensation and Leadership Development Committee. To the extent there is any significant vote against our named executive officer compensation as disclosed in this Proxy Statement, our Compensation and Leadership Development Committee will evaluate whether any actions are necessary to address the concerns of shareholders. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board of Directors recommends that the shareholders vote “FOR” the approval, on a non-binding advisory basis, of the compensation of our named executive officers, as disclosed in this Proxy Statement.
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE BOARD OF DIRECTORS Below is a list of our directors and their positions and ages as of April 19, 2022.4, 2023. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Age | | | | Position | | George Goldsmith | | 6667 | | | | Chief Executive Officer, Chair of the Board | | David Norton | | 7071 | | | | Lead Director | Jason CammKabir Nath | | 3358 | | | | Chief Executive Officer, Director | | Annalisa Jenkins, MBBS | | 5657 | | | | Director | | Thomas Lönngren | | 7172 | | | | Director | | Ekaterina Malievskaia | | 5556 | | | | Chief Innovation Officer, Director | | Linda McGoldrick | | 6768 | | | | Director | | Robert McQuade | | 6566 | | | | Director | | Wayne Riley | | 6272 | | | | Director |
During the year ended December 31, 2021,2022, there were elevensix full meetings of our Board. All of our then serving Directors attended a minimum of 75% of the aggregate of the meetings of the Board of Directors and meetings of the committees of which he or she was a member during 2021.2022. Under our Corporate Governance Guidelines, each of our directors is expected to make reasonable efforts to attend meetings of the Board. Directors are also expected to attend our annual general meeting of shareholders to the extent practicable. The biographical information for Thomas LönngrenGeorge Goldsmith, Annalisa Jenkins, Linda McGoldrick and Robert McQuade,Kabir Nath, the nominees to our Board, is provided in “Proposal 1—Re-Election of Thomas LönngrenGeorge Goldsmith to the Board of Directors,” and “Proposal 2—Re-Election of Robert McQuadeAnnalisa Jenkins to the Board of Directors,” “Proposal 3—Re-Election of Linda McGoldrick to the Board of Directors,” and “Proposal 4—Re-Election of Kabir Nath to the Board of Directors,” respectively. Below is biographical information for those directors who are not standing for re-election at this Meeting and who will remain seated following the Meeting. George Goldsmith has served as our Chief Executive Officer and Chair of our Board since June 2017. Previously, Mr. Goldsmith served as Chair and Chief Executive Officer at Tapestry Networks, which he co-founded in 2002, until 2005, and he continues to serve as Non-Executive Chairman. Mr. Goldsmith was Chief Executive Officer of TomorrowLab@McKinsey from 2000 to 2001, and prior to that served as Senior Advisor to McKinsey & Company from 1997 to 2000. Prior to that he served as Managing Director of the Lotus Institute after the Lotus Development Corporation’s acquisition of his first company, The Human Interface Group. Mr. Goldsmith also serves on the board of directors of COMPASS Pathways Limited. Mr. Goldsmith received his bachelor’s degree in Psychology from the University of Rochester and his masters in Clinical Psychology from the University of Connecticut. We believe that Mr. Goldsmith is qualified to serve on our Board because of his executive experience in our industry.
David Norton has served as a member of our Board since May 2018. Until his retirement in September 2011, Mr. Norton was Company Group Chairman, Global Pharmaceuticals for Johnson & Johnson, a public healthcare company. Mr. Norton began his Johnson & Johnson career in 1979 and held a number of positions at the company, including Company Group Chairman, Worldwide Commercial and Operations for the CNS, Internal Medicine franchise from 2006 to 2009, Company Group Chairman for the pharmaceutical businesses in Europe, the Middle East and Africa from 2004 to 2006, and Company Group Chairman for the pharmaceutical businesses in North America from 2003 to 2004. Mr. Norton currently serves on the board of directors of Mallinckrodt, PLC, Forepont Capital, LLC, and the Global Alliance for TB Drug Development (now known as TB Alliance). Previously during the past five years, Mr. Norton served on the board of directors of Mallinckrodt, PLC (NYSE American: MNK) and Vivus, Inc. Mr. Norton is a graduate of Control Data Institute, Australia and the College of Distributive Trades, United Kingdom. We believe that Mr. Norton is qualified to serve on our Board because of his experience, qualifications, attributes and skills, including his extensive global pharmaceutical experience. Annalisa Jenkins, MBBS, FRCPThomas Lönngren, has served as a member of our Board since May 2018. Mr. Lönngren currently serves as the Director at PharmaExec Consulting AB and as a Strategic Advisor at the NDA Group, which he has done since 2010. He is non-executive board member and chairman at Egetis Therapeutics AB, Sweden and board member at the NDA group Sweden. He acts as an advisor to the following companies and organizations: Artis Venture, San Francisco, U.S., Baren Therapeutics, San Francisco, U.S., faculty member of GLG Institute (Gerson Lehrman Group), New York, U.S., and special advisor to the Centre for Innovation in Regulatory Science (CIRS), London, U.K. He was the Deputy General Director of the Swedish Medical Product Agency until 2000. From November 20172001 until April 2019, Dr. Jenkins2010, Mr. Lönngren served as the Chief Executive Officer of PlaqueTec Ltd., a biotechnology company focusing on coronary artery disease treatment and prevention. Previously, Dr. Jenkins served as the Chief Executive Officer and a memberDirector of the boardEuropean Medical Agency. Mr. Lönngren received his degree in pharmacy and MSc in Social and Regulatory Pharmacy from Uppsala University. He is an Honorary Member of directorsthe Royal Pharmaceutical Society of Dimension Therapeutics, Inc., a biotechnology company focused on rareGreat Britain, Honorary Fellow of the Royal College of Physicians in Great Britain, and metabolic diseases associated withholds Honorary Doctorates from the liver, from September 2014 until its sale to Ultragenyx PharmaceuticalUniversity of Uppsala and University of Bath, U.K. We
Inc. in November 2017. From October 2013believe that Mr. Lönngren is qualified to March 2014,serve on our Board because of his experience, qualifications, attributes and skills, including his extensive pharmaceutical consulting experience.
Robert McQuade, Ph.D. has served as a member of our Board since April 2020. Dr. Jenkins servedMcQuade currently serves as the Executive Vice President Head& Chief Strategic Officer at Otsuka Pharmaceutical Development & Commercialization, Inc., where he has served since 2004. Dr. McQuade is also the Officer and Manager of Globalthe McQuade Center for Strategic Research and Development for Merck Serono Pharmaceuticals, a biopharmaceutical company. Previously, from September 2011 to October 2013, she served as Merck Serono’s Executive Vice President, Global Development and Medical, and was a member of Merck Serono’s executive committee. Prior to that,LLC since February 2020. Dr. Jenkins pursued a 15-year career at Bristol-Myers Squibb Company, a biopharmaceutical company, where, from July 2009 to June 2011 she was a Senior Vice President and Head of Global Medical Affairs. Dr. Jenkins isMcQuade currently a committee member of the science board to the FDA, chairs the Court of the London School of Hygiene and Tropical Medicine and is a non-executive director of Genomics England. Dr. Jenkins serves on the board of directors of Avrobio,entities related to Otsuka, including Otsuka America Pharmaceutical, Inc. (Nasdaq: AVRO), Oncimmune Holdings plc (LSE: ONC)Astex Pharmaceutical, Inc., Affimed GmbH (Nasdaq: AFMD)Astex Pharmaceutical, Ltd., Avanir Pharmaceuticals, Visterra, Inc., Otsuka Pharmaceutical Development & Commercialization, Inc. and a numberthe McQuade Center for Strategic Research and Development. He also serves on the board of privately held biotechnology and life science companies.directors of The Technology Accelerator Co., which is based in Charleston, SC. Dr. Jenkins graduated with aMcQuade received his degree in medicinebiology from St. Bartholomew’s HospitalDavidson College and completed his Ph.D. in thebiochemistry from University of LondonNorth Carolina at Chapel Hill. Prior to joining Otsuka, Dr. McQuade worked in drug discovery research at Schering-Plough Corp. and subsequently trained in cardiovascular medicine in the U.K. National Health Service. Earlier in her career, Dr. Jenkins served as a Medical Officer in the British Royal Navy.global medical affairs at Bristol-Myers Squibb Company (NYSE: BMS). We believe that Dr. JenkinsMcQuade is qualified to serve on our Board based on her industrybecause of his experience in the fieldclinical development and regulatory affairs, in which we operateaddition to his qualifications, attributes and her executive experience with companies in our industry.skills, including his extensive pharmaceutical experience. Ekaterina Malievskaia M.D. has served as our Chief Innovation Officer since January 2020 and as a member of our Board since 2017. Prior to her role as our Chief Innovation Officer, Dr. Malievskaia served as our Head of Research and Development from January 2019 to January 2020 and as our Chief Medical Officer from June 2017 to 2019. Dr. Malievskaia also previously served as clinical faculty at Mount Sinai School of Medicine and as a research professor in Public Health at the City University of New York. Prior to these roles, Dr. Malievskaia worked in clinical, academic and public health from 1999 until co-founding COMPASS. Dr. Malievskaia received her Doctor of Medicine from St. Petersburg Medical Academy. We believe that Dr. Malievskaia is qualified to serve on our Board because of her clinical practice, executive experience and public health academic background. Linda McGoldrick has served as a director of our company since September 2020. In 1985, Ms. McGoldrick founded, and currently serves as Chair and Chief Executive Officer of, Financial Health Associates International, a strategic consulting company specializing in healthcare and life sciences. From April 2019 through December 2019, Ms. McGoldrick served as President and interim Chief Executive Officer of Zillion, Inc., a health, technology and condition management company. Over her professional career, she has served in a number of leadership roles, including senior vice president and National Development director for the Healthcare and Life Sciences Industry Practices at Marsh-MMC Companies, international operations and marketing director of Veos plc, a European medical devices company, and managing director Europe for Kaiser Permanente International. In 2018, Ms. McGoldrick was appointed by the Governor of Massachusetts to serve on the state’s Health Information Technology Commission. Ms. McGoldrick has served as a director of numerous publicly traded and private held companies and non-profit organizations in the United States, United Kingdom and Europe and currently serves on the faculty of the National Association of Corporate Directors. Ms. McGoldrick previously served on the board of directors of Avadim Health, Inc. Ms. McGoldrick received her bachelor of arts in sociology from Ohio Wesleyan University and master of social work from the University of Pennsylvania and master of business administration in management from the Wharton School, University of Pennsylvania. We believe that Ms. McGoldrick is qualified to serve on our Board because of her extensive experience as a director, global business strategy leader and policy expert for U.S. and European companies and organizations.
Wayne J Riley, M.D., MPH, M.B.A. has served as a member of our Board since March 2021. Dr. Riley serves as the President of the State University of New York (SUNY) Downstate Health Sciences University, Brooklyn, NY, USA where he holds tenured professorships in internal medicine, and health policy and management and has served since January 2017. Prior to this, Dr. Riley served as a clinical professor of medicine and adjunct professor of health policy at Vanderbilt University from July 2007 until June 2017, and as President and Chief Executive Officer of Meharry Medical College from January 2007 until July 2013. In addition, Dr. Riley currently serves as an elected member of the U.S. National Academy of Medicine, a Commissioner of the U.S. Medicare Payment Advisory Commission, Chair of the Board of the New York Academy of Medicine, President of the Society of Medical Administrators, an organization of leading North American physician executives, and a President Emeritus of the American College of Physicians. Dr. Riley is also a member of the board of directors of HCA Healthcare Inc,Inc. (NYSE: HCA), where he serves as Chair of the Patient Safety & Quality Committee and a member of the Audit & Compliance and Nominating & Corporate Governance Committees and a member of the board of directors of HeartFlow, Inc. He also previously served as a Director of Vertex Pharmaceuticals Inc. (Nasdaq: VRTX). Dr. Riley holds a BA from Yale University, Masters in Public Health from the Tulane University School of Public Health and Tropical Medicine, M.D. from the Morehouse School of Medicine, and MBA from Rice University. We believe that Dr. Riley is qualified to serve on our Board because of his experience, qualifications, attributes and skills, including his extensive medical and health policy experience.
CORPORATE GOVERNANCE Structure of our Board of Directors Our Articles of Association and Corporate Governance Guidelines gives our Board the flexibility to determine the appropriate leadership structure for the Board, including whether the offices of DirectorsChief Executive Officer and Chair of the Board should be separate or combined and why the Board’ leadership structure is appropriate given the specific characteristics or circumstances of our company and the Board’s assessment of its leadership from time to time. We currently separate the roles of Chief Executive Officer and Chair of the Board . Separating the duties of the Chair from the duties of the Chief Executive Officer allows our Chief Executive Officer to focus on our day-to-day business, while allowing the Chair to lead the Board in its fundamental role of providing advice to and independent oversight of management. Specifically, the Chair presides over meetings of the Board, facilitates communications between management and the Board and assists with other corporate governance matters. We believe that having a non-executive Chair can enhance the effectiveness of the Board as a whole.
Our Board is currently chaired by the Chief Executive Officerour co-founder and a significant shareholder, George Goldsmith. The Company believes that it is advantageous to have a Board Chair with an extensive history with and knowledge of the Company George Goldsmith.(as is the case with our current Board Chair). We have designated David Norton as our lead independent director to help reinforce the independence of our Board of Directors as a whole. As lead independent director, Mr. Norton provides leadership to our Board if circumstances arise in which the roles of Chief Executive Officerco-founder and significant shareholder and Board Chair may be, or may be perceived to be, in conflict, and performs such additional duties as our Board may otherwise determine and delegate, including serving as principal liaison between the Board Chair and our independent directors. The Company believes that combining the positions of Chief Executive Officer and Board Chair helps to ensure that our Board and management act with a common purpose. We believe that combining the positions of Chief Executive Officer and Board Chair provides a single, clear chain of command to execute our business plans. In addition, we believe that a combined Chief Executive Officer/Board Chair is better positioned to facilitate the regular flow of information between management and the Board. The Company also believes that it is advantageous to have a Board Chair with an extensive history with and knowledge of the Company (as is the case with the Company’s Chief Executive Officer).
Independence of our Board of Directors Our Board of Directors has determined that all of our current directors, other than George Goldsmith, our Board Chair, Kabir Nath, our Chief Executive Officer, and Ekaterina Malievskaia, our Chief Innovation Officer, qualify as “independent” directors in accordance with the independence requirements under the applicable Nasdaq rules as well as applicable rules promulgated by the SEC. Mr. GoldsmithNath and Dr. Malievskaia are not considered independent because they are employees of the Company. Mr. Goldsmith is not considered independent because he served as our chief executive officer during the past three years. Our Board of Directors has made a subjective determination as to each independent director that no relationships exist that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, our Board reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and our management. Mr. Goldsmith is married to Dr. Malievskaia. Additionally, until his resignation effective April 16, 2021, Dr. Maliveskaia’s son worked for us as a Stakeholder Engagement and Operations Associate. There are no other family relationships among any of our directors or executive officers. Our independent directors meet in regularly scheduled executive sessions at which only independent directors are present. All ofThe Audit and Risk Committee, the committees of our BoardCompensation and Leadership Development Committee and the Nominating and Corporate Governance Committee are each comprised entirely of directors determined by the Board of Directors to be independent. Board Oversight of Risk Management and ESG IssuesMatters Our management is primarily responsible for assessing and managing risk while ourand one of the key functions of the Board is responsible for overseeing management’s executioninformed oversight of our risk management process. In carrying out its responsibilities. Ourrisk oversight responsibilities, the Board reviews the long and short-term operational and external risks facing the Company through its participation in long-range strategic planning, and ongoing reports from various Board standing committees that address risks inherent in their respective areas of Directorsoversight. On an ongoing basis, the Board and management identify key long and short-term risks, assess their potential impact and likelihood, and, where appropriate, implement operational measures and controls or purchase insurance coverage in order to help ensure adequate risk mitigation. The Board is supported by its committees in fulfillment of this responsibility.its risk oversight responsibilities. For example, our Audit and Risk Committee focuses on our overall financial risk by evaluating our internal controls and disclosure policies as well as ensuring the integrity of our financial statements and periodic reports. The Audit and Risk Committee also monitors compliance with legal and regulatory requirements. At its meetings, our Audit and Risk Committee receives reports concerning material risks and significant updates on compliance and risk management matters from our Chief Legal Officer and other executive officers, as necessary. Our Compensation and Leadership Development Committee (the “Compensation Committee”) strives to create incentives that encourage an appropriate level of risk-taking consistent with our business strategy. Finally, our Nominating and Corporate Governance Committee ensures that our governance policies and procedures are appropriate in light of the risks we face. Most of the Environmental, Social, and Governance (“ESG”) matters prioritized as part of our ESG framework are embedded in the Company’s strategic and operational plans, and are therefore overseen by the Board as part of regular updates and discussions that the Board receives and holds on these plans. The Board also specifically discusses our ESG framework at least once a year. Furthermore, Board oversight of specific ESG matters occurs through the committees of the Board: our Nominating and Corporate Governance Committee oversees our corporate governance guidelines; our Audit and Risk Committee oversees our risk and compliance framework, our code of conduct and ethics, as well as data privacy and security matters; and our Compensation and Leadership Development Committee oversees talent and employee-related matters, and receives regular updates from our Chief People Officer onhuman capital management strategies, including our employee well-being program and equity, diversity and inclusion initiatives.
Board Evaluation Process Our Board of Directors is committed to assessing its own performance as a board in order to identify its strengths as well as areas in which it may improve its performance. The self-evaluationboard evaluation process, which is overseen by the Nominating and Corporate Governance Committee, involves the completion of annual written questionnaires by the directors review and discussioninterviews with members of the Board, key members of management and key advisors to the Board. The results of the evaluationsboard evaluation process are reviewed and discussed, including considerations of action plans to address any issues, by both the Nominating and Corporate Governance Committee and our Board, and consideration of action plans to address any issues.Board. Committees of Our Board of Directors Our Board of Directors has three standing committees: the Audit and Risk Committee, the Compensation and Leadership Development Committee, and the Nominating and Corporate Governance Committee. We have also establishedhave an Innovation and Research Committee, which met three times last year, but this committeemeets on an ad hoc, as needed basis and does not yet have a charter in place that governs its purpose and duties. The Innovation and Research Committee meets to oversee the development and progress of programs to research and develop drug and technology assets that aid our mission to accelerate patient access to evidence-based innovation in mental health. The charters for our Audit and Risk Committee, Compensation and Leadership Development Committee and Nominating and Corporate Governance Committee can be found on the “Corporate Governance–Documents and Charters” section of our investor relations website at ir.compasspathways.com. Each such committee reviews these charters at least annually. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Audit and Risk Committee | | Compensation and Leadership Development Committee | | Nominating and
Corporate
Governance | Innovation and Research Committee | | | George Goldsmith | | | | | | | | | | David Norton | | | | X | | | | | Jason CammKabir Nath | | | | X | | X | X | | | Annalisa Jenkins, MBBS | | X | | Chair | | | X | | | Thomas Lönngren | | | | | | Chair | | | | Ekaterina Malievskaia | | | | | | | X | | | Linda McGoldrick | | Chair | | | | X | | | | Robert McQuade | | X | | | | | Chair | | | Wayne Riley | | | | X | | X | | |
Audit and Risk Committee Our Audit and Risk Committee currently consists of Annalisa Jenkins, Linda McGoldrick and Robert McQuade and assists our Board in overseeing our accounting and financial reporting processes. Ms. McGoldrick serves as chair of our Audit and Risk Committee. Our Audit and Risk Committee consists exclusively of members of our Board who are financially literate, and Dr. Jenkins and Ms. McGoldrick are each considered an “audit committee financial expert” as defined by applicable SEC rules and has the requisite financial sophistication as defined under the applicable Nasdaq rules and regulations. Our Board of Directors has determined that all of the members of our Audit and Risk Committee satisfy the “independence” requirements set forth in Rule 10A-3 under the Exchange Act. Our Audit and Risk Committee met fivesix times in 20212022 and oversees and reviews our internal controls, accounting policies and financial reporting, and provides a forum through which our independent registered public accounting firm reports. Our Audit and Risk Committee meets regularly with our independent registered public accounting firm without management present. Our Audit and Risk Committee operates under a written charter that satisfies the applicable standards of the SEC and Nasdaq. Our Audit and Risk Committee’s responsibilities include: •appointing, approving the compensation of, and assessing the performance and independence of our independent registered public accounting firm; •approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm;
•reviewing the audit plan with the independent registered public accounting firm and members of management responsible for preparing our financial statements and discussing with management and the
independent registered public accounting firm our annual and quarterly financial statements and related disclosures as well as critical accounting policies and practices used by us; •discussing with the independent registered public accounting firm its independence and obtaining required written communications required by the PCAOB; •exercising general oversight over our information security and technology risks, including our information security and related risk management programs; and •monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements and reviewing all related party transactions for potential conflict of interest situations and approving all such transactions. Compensation and Leadership Development Committee Our Compensation and Leadership Development Committee currently consists of Jason Camm, Annalisa Jenkins, David Norton and Wayne Riley. Dr. Jenkins serves as chair of our Compensation and Leadership Development Committee. Under SEC and Nasdaq rules, there are heightened independence standards for members of our Compensation and Leadership Development Committee, including a prohibition against the receipt of any compensation from us other than standard board member fees. Each member of our Compensation and Leadership Development Committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act. Our Board of Directors has determined that each member of our Compensation and Leadership Development Committee is “independent” as defined under the applicable Nasdaq rules. Our Compensation and Leadership Development Committee held fivesix meetings during 2021.2022. Our Compensation and Leadership Development Committee’s responsibilities include: •reviewing policies relevant to the consideration and determination of compensation of our directors and executive officers; •overseeing and administering our employee share option scheme or equity incentive plans in operation from time to time, including reviewing and approving grants and awards; •reviewing and approving certain corporate goals and objectives relating to the compensation of our chief executive officer, evaluating the performance of our chief executive officer in light of such corporate goals and objectives, and recommending the compensation of our chief executive officer to the Board based on such evaluation; •reviewing and recommending to our Board the compensation of our other executive officers and our directors; •overseeing our strategies, programs and initiatives related to equity, diversity and inclusion, gender pay parity and creating a positive working environment; •reviewing and overseeing our human capital management strategies, policies and practices, including employee health, safety and well-being, workforce belong, inclusion and diversity efforts and overall employee engagement and retention; and •reviewing and approving the retention of consulting firm or outside advisor to assist in the evaluation of compensation matters. The Compensation and Leadership Development Committee has the authority to delegate certain responsibilities to one or more subcommittees consisting of one or more of its members, but has not delegated such authority to a subcommittee. Compensation Committee Interlocks and Insider Participation
None of the members of our Compensation Committee, which include Dr. Jenkins, Mr. Camm, Mr. Norton and Dr. Riley, has at any time during the prior year been one of our officers or employees or was formerly an officer. None of our executive officers currently serves, or in the past fiscal year has served, as a member of our Compensation Committee or the compensation committee of any entity that has one or more executive officers serving on our Board.
Our Board of Directors has delegated to the Compensation and Leadership Development Committee the authority to approve any proposed compensation for our executive officers other than the Chief Executive Officer whose compensation is recommended to the Board for approval based on the Compensation and Leadership Development Committee’s evaluation of his performance in relation to our goals and objectives. Non-executive director compensation is recommended by our Compensation and Leadership Development Committee to the Board of Directors for approval. Our Chief Executive Officer may participate in general discussions with our Compensation and Leadership Development
Committee and Board of Directors about these compensation matters, but he does not participate in discussions during which his individual compensation is being considered and approved. In 2021,2022, the Compensation and Leadership Development Committee retained the services of Aon’s Human Capital Solutions practice, a division of Aon plc (“Aon”), an independent compensation consultant, to assist the Compensation and Leadership Development Committee with respect to compensation actions in 20212022 with the goal of ensuring that our compensation arrangements for our Chief Executive Officer, our other senior executive officers and our non-executive directors were competitive.
Nominating and Corporate Governance Committee Our Nominating and Corporate Governance Committee currently consists of Thomas Lönngren, Jason Camm, Linda McGoldrick and Wayne Riley. Mr. Lönngren serves as chair of our nominatingNominating and corporate governanceCorporate Governance committee. Our Board of Directors has determined that each member of our Nominating and Corporate Governance Committee is “independent” as defined under the applicable Nasdaq rules. Our Nominating and Corporate Governance Committee held three meetings during 2021.2022. Our nominatingNominating and corporate governanceCorporate Governance committee’s responsibilities include: •developing and recommending to the Board criteria for board and committee membership; •establishing procedures for identifying and evaluating board of director candidates, including nominees recommended by shareholders, including procedures by which shareholders may recommend director candidates; •identifying individuals qualified to become members of the Board; •evaluating the suitability of individual prospective director candidates, including considering the benefits of diversity, including diversity of thought, educational and professional background, gender, race, age, sexual orientation or ethnic and national background; •recommending to our Board the persons to be nominated for election as directors and to each of our Board’s committees; •developing and recommending to our Board a set of corporate governance guidelines, and regularly reviewing policies and guidelines adopted by the Board or its committees; and •overseeing the evaluation of our Board and its committees. Our Board is responsible for filling vacancies on our Board and for nominating candidates for election by our shareholders each year in the class of directors whose term expires at the relevant annual general meeting. The Board delegates the selection and nomination process to the Nominating and Corporate Governance Committee, with the expectation that other members of the Board, and of management, will be requested to take part in the process as appropriate. The Nominating and Corporate Governance Committee considers candidates for Board of Director membership by soliciting recommendations from any of the following sources: independent directors, the Chief Executive Officer, other executive officers, third-party search firms, or any other source it deems appropriate. Additionally, the Nominating and Corporate Governance Committee will review and evaluate the qualifications of any such proposed candidate, and conduct inquiries it deems appropriate. Any shareholder who wishes to recommend a candidate for consideration by the committee as a nominee for director should follow the procedures described later in this Proxy Statement under the heading “Additional Information—Shareholder Proposals.” Our Board of Directors is responsible for filling vacancies on our Board and for nominating candidates for election by our shareholders each year in the class of directors whose term expires at the relevant annual general meeting. The Board of Directors delegates the selection and nomination process to the Nominating and Corporate Governance Committee, with the expectation that other members of the Board of Directors, and of management, will be requested to take part in the process as appropriate.
Director Nomination Process The process followed by our Nominating and Corporate Governance Committee to identify and evaluate director candidates includes requests to board members and others for recommendations, including through the use of search firms or other advisors, meetings from time to time to evaluate biographical information and background material relating to potential candidates, and interviews of selected candidates by management, recruiters, members of the committee and our Board. Once candidates have been identified, the Nominating and Corporate Governance Committee confirms that the candidates meet all of the minimum qualifications and other criteria for director nominees approved by the Board of Directors and all facts and circumstances that it deems appropriate or advisable. The Nominating and Corporate Governance
Committee may gather information about the candidates that relate to their skills, their depth and breadth of business experience or other background characteristics, their independence, the needs of the Board and any other item of information that the Nominating and Corporate Governance Committee deems to be appropriate in the evaluation process. The Nominating and Corporate Governance Committee then meets as a group to discuss and evaluate the qualities and skills of each candidate, both on an individual basis and taking into account the overall composition and needs of our Board. Based on the results of the evaluation process, the Nominating and Corporate Governance Committee recommends candidates for the Board of Directors’Board’s approval to fill a vacancy or as director nominees for election to the Board of Directors by our shareholders each year in the class of directors whose term expires at the relevant annual general meeting. The qualifications, qualities and skills that our Nominating and Corporate Governance Committee believes must be met by a committee-recommended nominee for a position on our Board are as follows:
•The nominee shall have experience at a strategic or policymaking level in a business, government, non-profit or academic organization of high standing. •The nominee shall be accomplished in his or her respective field, with superior credentials and recognition. •The nominee shall be well regarded in the community and shall have a long-term reputation for the high ethical and moral standards. •The nominee shall have sufficient time and availability to devote to the affairs of the Company, particularly in light of the number of boards of directors on which such nominee may serve. •To the extent such nominee serves or has previously served on other boards, the nominee shall have a demonstrated history of actively contributing at board meetings. WeWhile we have no formal policy regarding board diversity.diversity, our Corporate Governance Guidelines and Nominating and Corporate Governance Committee charter provide that when evaluating proposed director candidates, the Nominating and Corporate Governance Committee (or any search firm acting under the direction of the Nominating and Corporate Governance Committee) shall consider the benefits of diversity, including diversity of thought, educational and professional background, gender, race, age, sexual orientation or ethnic and national background. Our priority in selection of board members is identification of members who will further the interests of our shareholders through consideration of a number of facts and circumstances, including among other things, the skills of the prospective director candidate, his or her depth and breadth of business experience or other background characteristics, his or her independence and the needs of the Board of Directors.Board.
The table below provides certain highlights of the composition of our Board members and nominees as of April 15, 2022.4, 2023. Each of the categories listed in the below table has the meaning as it is used in Nasdaq Rule 5605(f).
| | | | | | | | | | | | | | | | Board Diversity Matrix (As of April 15, 2022) | | Total Number of Directors | 9 | | Female | Male | Non‐Binary | Did Not Disclose Gender | | Part I: Gender Identity | | | Directors | 3 | 6 | | | | Part II: Demographic Background | | | | African American or Black | | 1 | | | | Alaskan Native or Native American | | | | | | Asian | | | | | | Hispanic or Latinx | | | | | | Native Hawaiian or Pacific Islander | | | | | | White | 3 | 5 | | | | Two or More Races or Ethnicities | | | | | | LGBTQ+ | | | Did Not Disclose Demographic Background | |
| | | | | | | | | | | | | | | | Board Diversity Matrix (As of April 4, 2023) | | Total Number of Directors | 9 | | Female | Male | Non‐Binary | Did Not Disclose Gender | | Part I: Gender Identity | | | Directors | 3 | 6 | | | | Part II: Demographic Background | | | | African American or Black | | 1 | | | | Alaskan Native or Native American | | | | | | Asian | | 1 | | | | Hispanic or Latinx | | | | | | Native Hawaiian or Pacific Islander | | | | | | White | 3 | 5 | | | | Two or More Races or Ethnicities | | 1 | | | | LGBTQ+ | | | Did Not Disclose Demographic Background | |
In addition, one director has identified as a military veteran. Shareholder Recommendations and Nominees Our Nominating and Corporate Governance Committee considers both recommendations and nominations for candidates to the Board from shareholders so long as such recommendations and nominations comply with our Articles of Association, Nominating and Corporate Governance Charter and applicable laws, including the rules and regulations of the SEC. Shareholders may recommend director nominees for consideration by the Nominating and Corporate Governance Committee by writing to our Company Secretary at the address below not less than 120 days prior to the date on which the Company’s proxy statement is released to shareholders in connection with the previous year’s annual meeting. Shareholder recommendations for director candidates must include the nominee’s name and address of record, a representation that the shareholder is a holder of the Company’s securities, as well as the nominee’s detailed biographical data and qualifications for board membership, information regarding any arrangements or understandings between the shareholder and the recommended candidate, the consent of the
proposed nominee to be named in the proxy statement and serve as a director if elected and any other information regarding the nominee that is required to be included in a proxy statement. Following verification of the shareholder status of the person submitting the recommendation, all properly submitted recommendations will be promptly brought to the attention of the Nominating and Corporate Governance Committee. Shareholders who desire to nominate persons directly for election to the Board at an annual general meeting of shareholders must meet the deadlines and other requirements set forth under “Additional Information —Shareholder Proposals.” Any vacancies on the Board of Directors occurring between our annual general meetings of shareholders may be filled by persons selected by a majority of the directors then in office, in which case any director so elected will serve until the next annual general meeting of shareholders when such director will offer himself/herself for re-election, or by persons elected by an ordinary resolution of the shareholders of the Company. You may write to the Nominating and Corporate Governance Committee at: c/o Ben Harber Company Secretary COMPASS Pathways plc 3rd Floor 1 Ashley Road, Altrincham Cheshire WA14 2DT United Kingdom Code of Business Conduct and Ethics
We have adopted a Code of Business Conduct and Ethics applicable to all of our directors, officers, employees and certain designated agents. The Code of Business Conduct and Ethics is available on the “Corporate Governance –Documents and Charters” section of our investor relations website at ir.compasspathways.com. We expect that any amendments to this code or any waivers of its requirements will be disclosed on our website. Shareholder Communication with the Board of Directors Our Board of Directors has implemented a process by which our shareholders or any interested parties may communicate with our Board as a whole or with individual members of our Board. Communications directed to our Board as a whole should be addressed to COMPASS Pathways plc 3rd Floor, 1 Ashley Road, Altrincham Cheshire WA14 2DT, United Kingdom Attn: Chair of the Board, of Directors, and communications directed to individual directors, including our Lead Independent Director, should be addressed to the attention of the individual director at the same address. Such communications may be made on an anonymous or confidential basis. All such communications received by the Company shall be delivered initially to the Company’s General Counsel, who shall review and maintain a log of all such communications. Directors may at any time review this log and request copies of any shareholder communication. Communications received will be promptly forwarded to the specified addressees thereof at the Company’s discretion. In general, communications relating to board and chief executive officer succession planning, corporate governance matters, executive compensation matters, general board oversight matters and long-term corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances, and matters as to which we tend to receive repetitive or duplicative communications. Any interested party with concerns about our company may report such concerns to the Board of Directors or the chairman of our Board and Nominating and Corporate Governance Committee by following the procedures described above. A copy of any such written communication may also be forwarded to our legal counsel and a copy of such communication may be retained for a reasonable period of time. The director may discuss the matter with our legal counsel, with independent advisors, with non-management directors, or with our management, or may take other action or no action as the director determines in good faith, using reasonable judgment, and applying his or her own discretion. Communications may be forwarded to other directors if they relate to important substantive matters and include suggestions or comments that may be important for other directors to know. The Audit and Risk Committee oversees the procedures for the receipt, retention, and treatment of complaints received by us regarding accounting, internal accounting controls or audit matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting, internal accounting controls or auditing matters. Any shareholder communications that include concerns or complaints regarding accounting, internal controls or auditing matters or potential violations of the federal securities laws or the Foreign Corrupt Practices Act will be handled in accordance with procedures adopted by the Audit and Risk Committee. We have also established a toll-free telephone number for the reporting of such activity, which is +1 877 306 1965 or +44 (0) 800 032 5911.
DIRECTOR COMPENSATION Under our Directors’ Remuneration Policy for Non-Executive Directors (“Director Compensation Policy”), the Board has the discretion to pay cash and equity fees to our non-executive directors for their Board and committee service. Our compensation arrangements for non-executive directors during 2021,2022, as set forth in our Director Compensation Policy, was comprised of an award of a fixed number of share options plus cash payment. Our Director Compensation Policy in 20212022 provided that each non-executive director will receive the following annual cash retainers for service on our Board: (a) £30,000 ($41,270)37,114) for each member, (b) £15,000 ($20,635)18,557) for the lead independent director, (increased from £10,000 from September 14, 2021), (c) £12,000 ($16,508)14,846) for the chair of the Audit and Risk Committee, (d) £8,000 ($11,005)9,897) for the chair of each of the Compensation and Leadership Development Committee and Innovation and Research Committee Chair, (e) £7,000 ($9,630) for the8,660) chair of the Nominating and Corporate Governance Committee, (increased from £6,000 from September 14, 2021), (f) £6,000 ($8,254)7,423) for each member of the Audit and Risk Committee, (g) £4,000 ($5,503)4,949) for each member of the Compensation and Leadership Development Committee, (h) £3,500 ($4,815)4,330) for each member of the Nominating and Corporate Governance Committee (increased from £3,000 from September 14, 2021) and (i) £4,000 ($5,503)4,949) for each member of the Innovation and Research Committee. Cash fees are paid to directors in GBP. All amounts have been converted from GBP to USD using the 20212022 average FX rate (£1:$1.3757)1.2371). Fees are reviewed on a periodic basis against those in similar sized companies to ensure they remain competitive and adequately reflect the time commitments and scope of the role. Supplemental fees, in addition to the Board member fees, are paid to recognize the additional time commitments and responsibilities of roles on our committees or the additional commitment of our independent director. Directors may receive limited travel or hospitality related benefits in connection with their duties. In addition to cash compensation, each non-executive director is eligible to receive share options under our equity incentive plans. We have historically awarded share options to certain non-executive directors in an amount determined at the discretion of the Board or Compensation and Leadership Development Committee. The value of all equity awards and cash compensation to any non-executive director in any calendar year for services as a non-executive director shall not exceed £750,000. We do not have a formal share ownership guideline policy for non-executive directors.
During 2021,2022, our Director Compensation Policy provided that each new non-executive director elected to our board of directorsBoard was granted an initial one-time equity award of options to purchase 24,00034,000 of our ADS on the date of such director’s initial election or appointment to the boardBoard. On June 16, 2022, the date of directors. In October 2021,our 2022 AGM, each ongoing non-executive director that continued to serve on the board (excluding any non-executive directors appointed in that year) was granted an option to purchase 12,00017,000 of our ADS, except for Mr. Riley who received an option to purchase 21,250 of our ADS. For boththe initial andgrants, options vest in 36 equal monthly installments, subject to continued service on the Board. For the annual grants, options vest 25% onin full upon the earlier to occur of the first anniversary of the date of grant date, with the remainder vesting in 36 equal monthly installments thereafter.
Going forward, annual awards to the non-executive directors will be made onor the date of the next Annual Meeting, subject to continued service on the Board.
Beginning June 2023, our revised Director Compensation Policy will provide for the payment of cash fees in U.S. dollars for all non-executive directors, other than the Board Chair, and to increase the option awards for our non-executive directors. Under the revised Director Compensation Policy, each non-executive director will receive the following cash retainers for service on our Board: (a) £80,000 for our Board Chair, (b) $40,000 for each member, (c) an additional $20,000 for our lead independent director, (d) $16,000 for the chair of the Audit and Risk Committee, (e) $12,000 for the chair of each of the Compensation and Leadership Development Committee and Innovation and Research Committee, (f) $10,000 for the chair of our Nominating and Corporate Governance Committee, (g) $8,000 for each member of our Audit and Risk Committee, (h) $6,000 for each member of the Compensation and Leadership Development Committee and the Innovation and Research Committee, and (i) $5,000 for each member of our Nominating and Corporate Governance Committee. The initial equity award will be increased to 52,000 options and the annual general meeting of shareholders, with the grant guidelines amended, as appropriate, based on market researchequity awards will be increased to 39,000 options for our Board Chair and advice from its compensation consultant.26,000 options for our other non-executive directors. The table below shows the compensation paid to our non-executive directors during the year ended December 31, 2021.2022. Mr. Goldsmith, Mr. Nath and Dr. Malievskaia did not receive compensation for service on the Board and the compensation paid to Mr. Goldsmith, Mr. Nash and Dr. Malievskaia as employees of the Company are set forth under the heading “Named Executive Officer Compensation—Summary Compensation Table” below. As a U.K.-incorporated company, we have received shareholder approval at our AGM in 20212022 for our U.K. statutory directors’ remuneration report, which includes a directors’ remuneration policy for our executive and non-executive directors.
| | | | | | | | | | | | | | | | | | | | | Fees | | | | | | | | | | | Earned or | | | | | | | | | | | Paid in | | | Option | | | | | | | | Cash | | | Awards | | | | | Total | | Name | | ($) | | | ($) (1) (2) | | | | | ($) | Jason Camm (3) | | — | | | — | | | | | — | Annalisa Jenkins (4) | | 66,032 | | | 213,201 | | | | | 279,233 | | Thomas Lönngren | | 49,535 | | | 213,201 | | | | | 262,736 | | Linda McGoldrick | | 62,077 | | | 213,201 | | | | | 275,278 | | Robert McQuade | | 60,529 | | | 213,201 | | | | | 273,731 | David Norton (4) | | 62,249 | | | 213,201 | | | | | 275,450 | Wayne Riley (5) | | 38,531 | | | 513,823 | | | | | 552,354 | Florian Brand (6) | | 13,119 | | | 99,374 | | | | | 112,493 |
| | | | | | | | | | | | | | | | | Fees | | | | | | | Earned or | | | | | | | Paid in | | Option | | | | | Cash | | Awards | | Total | | Name | | ($) | | ($) (1) (2) | | ($) | | David Norton (4) | | 60,620 | | 112,479 | | 173,099 | | Jason Camm (3) | | — | | — | | — | | Annalisa Jenkins (4) | | 59,382 | | 112,479 | | 171,861 | | Thomas Lönngren | | 45,692 | | 112,479 | | 158,171 | | Robert McQuade | | 54,434 | | 112,479 | | 166,913 | | Linda McGoldrick | | 56,290 | | 112,479 | | 168,769 | | Wayne Riley(5) | | 46,393 | | 140,599 | | 186,992 |
(1) The amount reported represents the aggregate grant date fair value of share options awarded to our non-employee directors during the 20212022 fiscal year, calculated in accordance with FASB, ASC Topic 718. Such grant date fair value does not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value of the share option reported in this column are set forth in Note 11 in our annual report on Form 10-K filed with the SEC on February 24, 2022.28, 2023. The amount reported in this column reflects the accounting cost for these share option awards and does not correspond to the actual economic value that may be received by the directors upon the exercise of the share options or any sale of the shares. (2) At December 31, 2021,2022, the Directors owned the following number of outstanding and unexercised share options: Annalisa Jenkins (132,474)(149,475), Thomas Lönngren (72,095)(89,095), Linda McGoldrick (33,584)(50,584) Robert McQuade (33,584)(50,584), David Norton (147,404),(164,404) and Wayne Riley (24,000) and Florian Brand (5,396)(45,250). Jason Camm had no options outstanding and unexercised on December 31, 2021.2022. (3) On February 1, 2021, Mr. Camm permanently waived any and all compensation which he was entitled to receive during the year ended December 31, 2021.2022. Mr. Camm's service on the board ended on June 16, 2022, the date of the 2022 AGM. (4) At December 31, 2021,2022, Annalisa Jenkins held 16,32110,386 unvested restricted share units, or RSUs, and David Norton held 16,32110,386 unvested RSUs. At December 31, 20212022 no other Non-Executive Director held RSUs. (5) WayneMr. Riley was appointed as Director, effectivejoined the Board in March 2021 and received his initial equity award. As he did not receive an annual equity award at our 2021 AGM, his 2022 annual equity award included an additional number of shares covering the three- month period from March 31, 2021.2022 until June 2022 . (6) On May 14, 2021, Florian Brand resigned from his position as a director.
EXECUTIVE OFFICERS OF THE COMPANY Below is a list of our executive officers and their positions and ages as of the date of April 19, 2022.4, 2023. George Goldsmith and Ekaterina Malievskaia are married and serve on our Board. There is no arrangement or understanding between any executive officer and any other person pursuant to which the executive officer was selected. | | | | | | | | | | | | | | | | | Name | | Age | | Position | George GoldsmithKabir Nath | | 6658 | | Chief Executive Officer, Chair of our BoardDirector | | Michael Falvey | | 6364 | | Chief Financial Officer | | Guy Goodwin | | 7475 | | Chief Medical Officer | | Ekaterina Malievskaia | | 5556 | | Chief Innovation Officer, Director | | Matthew Owens | | 4445 | | General Counsel and Chief Legal Officer |
For biographical information regarding Mr. GoldsmithNath and Dr. Malievskaia, see the section titled “Board of Directors and Corporate Governance.” Michael Falvey has served as our Chief Financial Officer since January 2022. Mr. Falvey was the Chief Financial Officer of Karyopharm Therapeutics between September 2017 and January 2019. Prior to Karyopharm Therapeutics, Mr. Falvey served as Chief Financial Officer at several other high-growth companies including Seven Bridges Genomics from August 2016 to June 2017 and Analysis Group from July 2010 to April 2016. Prior to joining Analysis Group, Mr. Falvey served as Chief Financial Officer of Ahura Scientific and Aspect Medical Systems, and as Vice-President, Finance, at Millennium Pharmaceuticals Inc. In addition to his healthcare experience, Mr. Falvey held financial management positions with Fidelity Investments, Digital Equipment Corporation and General Electric. Mr. Falvey earned a Master of Science in Management from the Sloan School of Management at the Massachusetts Institute of Technology and a Bachelor of Science from Georgetown University’s School of Foreign Service. Guy Goodwin has served as our Chief Medical Officer since August 2021. Dr. Goodwin currently serves as Emeritus Professor of Psychiatry at The University of Oxford, where he has been a professor of psychiatry since October 1996. Additionally, Dr. Goodwin served as Medical Director at P1vital, where he worked between April 2018 and July 2021. Dr. Goodwin previously served as WA Handley Chair of Psychiatry and Head of the University of Oxford’s Department of Psychiatry. Dr. Goodwin is a Fellow of the American College of Neuropsychopharmacology, and former President of the British Association for Psychopharmacology and of the European College of Neuropsychopharmacology. Dr. Goodwin received his BA, DPhil, BM, and BCh from the University of Oxford. Matthew Owens has served as our General Counsel and Chief Legal Officer since February 2022. Prior to joining the Company, Mr. Owens served as Global Head Legal, Digital at Novartis International AG, beginning in January 2018. He has served in various positions with Novartis since 2010, also serving as Senior Legal Counsel, and as Head Legal, Strategic Partnerships and Digital. Prior to Novartis, he was Senior Counsel at Solvay Pharmaceuticals, and Corporate Counsel at Mettler-Toledo. He holds a Bachelor of Arts (Pre-Law & Political Science, History & Criminology) from Capital University, Columbus, Ohio, and a Juris Doctorate from Capital University Law School where he was a Presidential Scholar. He ispreviously was a lecturer at the University of Zurich Law School’s Europa Institute.
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS This Executive Compensation Discussion and Analysis (“CD&A”)section describes our executive compensation program and the 20212022 compensation awarded to, earned by, or paid to each individual who served as our principal executive officer for the year ended December 31, 2022, or fiscal year 2022, and our next two most highly compensated executive officers in respect of their service to our company for fiscal year 2022. We refer to these individuals as our named executive officers (“NEOs”).officers. This CD&AExecutive Compensation section should be read with the compensation tables and related disclosures for our NEOs.named executive officers. Our NEOsnamed executive officers for 2021*2022 were as follows: •George Goldsmith, our Chairman and former Chief Executive Officer; •Guy Goodwin,Kabir Nath, our Chief MedicalExecutive Officer (joined August 2021);and a Director; •Ekaterina Malievskaia, our Chief Innovation Officer; •Piers Morgan, our former Chief Financial Officer;Information Officer and a Director; and
•Nate Poulsen,Matthew Owens, our former General Counsel & Chief Legal Officer.Officer and General Counsel. *Nate Poulsen ceased to be an executive officer in October 2021 and left the organization in December 2021. Piers Morgan ceased to be an executive officer upon his departure on December 31, 2021.
This CD&AExecutive Compensation section describes the material elements of our executive compensation program during 2021.2022. It also provides an overview of our executive compensation philosophy and objectives. Finally, it discusses how the Compensation and Leadership Development Committee of our Board of Directors arrived at the specific compensation decisions for our executive officers, including our NEOs,named executive officers, for 2021,2022, including the key factors that our Compensation and Leadership Development Committee considered in determining their compensation. EXECUTIVE SUMMARY Business Overview We are a clinical-stage, mental health care company dedicated to accelerating patient access to evidence-based innovation in mental health. Our initial focus is on treatment-resistant depression, or TRD, a subset of major depressive disorder, or MDD, comprising patients who are inadequately served by the current treatment paradigm. In 2021, we completed a2022, the results from our large-scale randomized, controlled, double-blind Phase IIb2b clinical trial of our COMP360 psilocybin therapy in 233 patients suffering with TRD in 22 sites in 10 countries in North America and Europe. This is the largest psilocybin trial completed to date. We completed our IPO in September 2020. From that time through December 31, 2021, we were a “foreign private issuer” within the meaning of the Exchange Act, and an “emerging growth company” as definedpublished in the Jumpstart Our Business Startups Act New England Journal of 2012, as amended. Effective January 1, 2022, we no longer meet those designations andMedicine. We commenced our Phase 3 clinical program in TRD, consisting of two pivotal trials, which are instead subject to the reporting and other requirements applicable to U.S. domestic issuers and “large accelerated filers” as defined in Rule 12b-2 of the Exchange Act. As a U.S. domestic issuer and large accelerated filer, we have increased U.S. disclosure obligations regarding executive compensation and are required to file for the first timePhase 3 trials of a proxy statement pursuant to Section 14(a) of Exchange Act, including this CD&A, and hold for the first time a non-binding advisory vote on executive compensation.psilocybin agent.
Corporate Performance Highlights We have made substantial progress during 2021,2022, including: Positive results from ground-breaking phase IIb clinical trial ofAdvanced COMP360 psilocybin therapy for TRD, despite the ongoing challenges posed by the COVID-19 pandemic:TRD:
•Positive results from ground-breaking phase IIbPhase 2b clinical trial in TRD were published in the New England Journal of Medicine •Additional data showing patient improvements beyond reduction of depression symptoms •Positive results from open-label study of 25mg COMP360 psilocybin therapy as adjunct to SSRI antidepressants in treatment-resistant depression
•End-of-phase IIHeld end-of-phase 2 meeting scheduled with the U.S. Food and Drug Administration for late April
•Transitioned to a Phase III3 company and launched a Phase 3 program expected to begin in second halfTRD - the first ever Phase 3 program of 2022psilocybin, a unique achievement
Additional COMP360 development programs: •Launched a Phase II trial2 program in post-traumatic stress disorder launched at Kings College Londonanorexia nervosa, an area of critical unmet need with no FDA-approved pharmaceutical treatments available and high mortality rate for patients suffering from anorexia nervosa •Positive results reported from two investigator-led clinical initiatives in severe TRD, anorexia nervosa, bipolar 2 and major depressive disorder one of which has been published in The New England Journal of Medicine •Additional investigator-initiated studies ongoing in multiple indications Significantly strengthened our balance sheet through:Pipeline development:
•CompletedProgressed development of our artificial intelligence model and authored an article titled Psilocybin Therapy for Treatment Resistant Depression: Prediction of Clinical Outcome by Natural Language Processing, which we have shared openly and submitted to a follow-on offering of American Depositary Shares, raising $154.8m Pipeline development:
•Development of new product candidates through exclusive research project with Dr. Matthias Grill of MiHKAL GmbH, complementing work being done at COMPASS's Discovery Center
Commercial exclusivity and intellectual property:
•10 granted patents issued to-date covering composition, formulation, and method of usejournal for publication
•Several additional filings completedOngoing research on prodrug development has led to a number of potential candidate leads being identified that we plan to continue through further research based development Prepare for successful and scalable commercial launch of COMP360 to ensure broad patient access: •Progress towards issuance by the American Medical Association of new CPT III codes, which are a type of reimbursement code assigned to emerging technologies, services and procedures, to facilitate reimbursement for the psychological support that we anticipate would accompany administration of COMP360, if regulatory approval is obtained •Pioneering collaboration with King’s College London and South London and Maudsley NHS Foundation Trust to create The Center for Mental Health Research and Innovation in the U.K.
•Launched retrospective real world evidence studies
OVERVIEW OF EXECUTIVE COMPENSATION PROGRAM Executive Compensation Philosophy Our executive compensation program is guided by our overarching philosophy of paying for performance. Consistent with this philosophy, we have designed our executive compensation program with the following principles in mind: | | | | | | | | | | | | | | • | | Attract, retain, and motivate high caliber executive talent and focus them on the delivery of the Company’s strategic and business objectives; | | • | | Be competitive against appropriate market benchmarks and have a strong link to performance, providing the ability to earn above-market rewards for strong performance; | | • | | Be simple and understandable, both internally and externally; | | • | | Encourage increased equity ownership to motivate executives in the overall interests of shareholders, the Company, employees and customers; and | | • | | Take due account of good governance and promote the long-term success of the Company. |
Executive Compensation Program Design Our executive compensation program is designed to be reasonable and competitive, and balance our goal of attracting, motivating, rewarding and retaining top-performing senior executives with our goal of aligning their interests with those of our shareholders. The Compensation and Leadership Development Committee annually evaluates our executive compensation program to ensure that it is consistent with our short-term and long-term goals and market competitive practices. Our executive compensation program consists of a mix of compensation elements that balance achievement of our short-term goals with our long-term performance. We provide short-term incentive compensation opportunities in the form of annual cash bonuses, which focus on our achievement of annual goals. We also provide long-term incentive compensation opportunities in the form of equity awards. We provide a combination of share options with an exercise price equal to fair market value, or "market-priced" options and full-value awards which have historically primarily been in(in the form of restricted share units for U.S. taxpayers and options with an exercise price equal to the nominal value of a share, or nominal cost options for non-U.S. taxpayers) and which focus executive attention on our long-term performance. We believe that market-priced share options provide a strong reward for growth in the market price of our shares because their entire value depends on future share price appreciation. In connectionWe believe that restricted share units and nominal cost options are important elements of a competitive compensation program from a retention perspective, as the companies with our IPO in 2020,whom we grantedcompete for talent typically offer a combination of share options to our executive team, which were intended to serve as our long-term equity compensation throughout the duration of 2021. As such, we did not issue any additional equity awards to ongoing executives in 2021 and our 2022 awards will serve as the first regular cycle of annual equity grants as a publicly traded company. We did, however, offer a sign-on option award to our newly appointed Chief Medical Officer in the year.
Our executive compensation program is also designed to incorporate sound practices for compensation governance. Below we summarize such practices.
What We Do: | | | | | | | | | | | ✓ | Maintain an Independent Compensation and Leadership Development Committee. The Compensation and Leadership Development Committee consists solely of independent directors. |
| | | | | | | | | | | ✓ | Retain an Independent Compensation Advisor. The Compensation and Leadership Development Committee engages its own compensation advisor to provide information and analysis related to annual executive compensation decisions, including the 20212022 executive compensation decisions, and other advice on executive compensation independent of management. |
| | | | | | | | | | | ✓ | Review Executive Compensation Annually. The Compensation and Leadership Development Committee annually reviews our compensation strategy, including a review and determination of our compensation peer group used for comparative purposes. |
| | | | | | | | | | | ✓ | Design Compensation At-Risk. Our executive compensation program is designed so that a significant portion of our executive officers’ compensation is “at risk” based on our corporate performance, as well as equity-based, to align the interests of our executive officers and shareholders. |
| | | | | | | | | | | ✓ | Use a Pay-for-Performance Philosophy. The majority of ourOur executive officers’ compensation is directly linked to corporate performanceachievement of company goals and includes a significant long-term equity component, thereby making a substantial portion of each executive officer’s total compensation dependent upon our share price. |
What We Don’t Do: | | | | | | | | | | | ✗ | No Executive Retirement Plans. We do not offer pension arrangements or retirement plans or arrangements to our executive officers that are different from or in addition to those offered to our other employees. |
| | | | | | | | | | ✗ | Limited Perquisites. We provide limited perquisites and other personal benefits to our executive officers.
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| | | | | | | | | | ✗ | No Special Health and Welfare Benefits. Our executive officers participate in our health and welfare benefits programs on the same basis as our other employees.
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| | | | | | | | | | | ✗ | No Post-Employment Tax Payment Reimbursement. We do not provide any tax reimbursement payments (including “gross-ups”) on any change-in-control or severance payments or benefits. |
| | | | | | | | | | ✗ | No Hedging or Pledging. Our Insider Trading Policy prohibits our executive officers, the non-employee members of our Board and certain designated employees from hedging or pledging our securities, or engaging in short sales or trading in standardized options related to our securities. |
“Say-on-Pay” Vote on Executive Compensation In prior years,Annually, at our general meeting of shareholders, we were both a “foreign private issuer” and an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended; therefore, we were not required to hold a non-binding advisory vote on the compensation of our NEOs (a “Say-on-Pay” vote). At this AGM, we will hold our first Say-on-Pay vote. Our Board of Directors and Compensation Committee will consider the result of the Say-on-Pay vote, and the related vote on the frequency of whichregarding the compensation of our named executive officers, is submittedwhich we refer to as say-on-pay. The Compensation and Leadership Development Committee has considered and will continue to consider the outcome of such say-on-pay votes, including the percentage of votes cast in favor and against the say-on-pay proposal, when making future compensation decisions for our named executive officers. The Compensation and Leadership Development Committee also relies on advice from its compensation consultants, its evaluation of Company performance against pre-defined corporate goals, its understanding of the challenges facing the Company and its observations of executive officer performance to determine executive officer compensation.
At our 2022 AGM, the non-binding advisory vote of shareholders supported the compensation of the named executive officers identified in our 2022 proxy statement by 99.7% of the votes cast at the meeting. These votes for a vote (a “and against the say-on-pay proposal, together with available feedback from investors, have been and will continue to be considered by the Compensation and Leadership Development Committee Say-on-Frequency” vote), when making compensation decisions for our executive officers in the future because we value the opinions.
As a U.K.-incorporated company, we have received shareholder approval at our AGM in 2021 for our U.K. statutory directors’ remuneration report,Directors’ Remuneration Policy which includes a directors’ remuneration policy forapplies to our executive and non-executive directors. This binding policy is in effect for three years and covers allowable compensation for twoour current and future executive and non-executive directors. Our Directors' Remuneration Policy applies to three of our NEOs,named executive officers, Mr. Goldsmith, our CEO,current Chairperson and former Chief Executive Officer, Mr. Nath, our current Chief Executive Officer, and Dr. Malievskaia our CIO, bothChief Innovation Officer, each of whom were executive directors of the Company
during 20212022 and will continue to serve on our Board of Directors for 2022. In 2021,2023, subject to re-election of Mr. Goldsmith and Mr. Nath at this annual general meeting of shareholders. In 2022, Mr. Goldsmith, Mr. Nath and Dr. Malievskaia did not receive compensation for their service on our Board. Among other things, our directors’ remuneration policyDirectors’ Remuneration Policy sets a cap on the annual bonus payable to an executive director at 125% of the target bonus level and limits the pension contribution or cash supplement payable by the Company to 3% of salary for the U.K.-based executive directors, in line with the wider workforce.workforce, which generally has a 3% pension contribution, but may be up to 8%. Mr. Nath joined us in 2022 and is eligible to participate in our 401(K) retirement plan on the same terms as our U.S. based employees, including the company match of up to 4% of salary, subject to statutory limitations on contributions. Governance of Executive Compensation Program Role of the Compensation and Leadership Development Committee and the Board of Directors Our Compensation and Leadership Development Committee, which is comprised entirely of independent directors, is responsible for discharging our Board of Directors’Board’s responsibilities relating to compensation of our directors and executives, overseeing our overall compensation structure, policies and programs, and reviewing our processes and procedures for the consideration and determination of director and executive compensation. The Compensation and Leadership Development Committee’s approach to remuneration matters is to enable the Company to attract and retain talent, incentivize long-term value generation, and effectively manage the Company’s cash resources. It is the belief of the Compensation and Leadership Development Committee that this is best achieved through a greater emphasis on variable rather than fixed remuneration, comprised of a mix of base salary and benefits, along with the flexibility to appropriately reward and incentivize with variable pay and long-term incentives. Our Compensation and Leadership Development Committee has the authority to retain, at our expense, one or more third-party compensation consultants to assist the Compensation and Leadership Development Committee in performing its responsibilities. At the beginning of the year, the Compensation and Leadership Development Committee reviews and recommends, in the case of our Executive Chair and our Chief Executive Officer, and approves, in the case of our other named executive officers, the primary elements of compensation—base salary increases, cash bonus targets, and annual equity awards—for our NEOs,awards, as authorized by the Board of Directors pursuant to the Compensation and Leadership Development Committee charter. In addition, the Compensation and Leadership Development Committee may deem it advisable to review and approve subsequent compensation opportunities for our executive officers, including our NEOs.named executive officers. Compensation-Setting Factors When reviewing and approving the amount of each compensation element and the target total compensation opportunity for our executive officers, the Compensation and Leadership Development Committee considers the following factors: the Company’s performance during the year, based on business and corporate goals and priorities established by the Chief Executive Officer (“CEO”) and the Board of Directors; each executive officer’s skills, experience and qualifications relative to other similarly-situated executives at the companies in our compensation peer group; the scope of each executive officer’s role compared to other similarly-situated executives at the companies in our compensation peer group; the performance of each individual executive officer, based on an assessment of their contributions to our overall performance, ability to lead their department and work as part of a team, all of which reflect our values;
compensation parity among our executive officers; the dilutive impact of equity awards;
general economic and market conditions and rate of inflation; changes in the size and complexity of the Company as we transitioned to a Phase 3 clinical development company and prepare to transition from a clinical-stage company to a fully integrated biotechnology company in anticipation of our first product launch; the expectations of institutional shareholders and any specific feedback received from shareholders; the recommendations provided by the CEOChief Executive Officer with respect to the compensation of our executive officers, other executive officers.than our Executive Chair and our Chief Executive Officer. These factors provide the framework for compensation decisions for each of our executive officers, including our NEOs.named executive officers. The Compensation and Leadership Development Committee and the Board, of Directors, as applicable, do not assign relative weights or rankings to these factors, and do not consider any single factor as determinative in the compensation of our executive officers. Rather, the Compensation and Leadership Development Committee and the Board, of Directors, as applicable, rely on their own knowledge and judgment in assessing these factors and making compensation decisions. Our CEO doesDuring the time Mr. Goldsmith served as our Executive Chair and Chief Executive Officer, he did not make recommendations to our Compensation and Leadership Development Committee or participate in the Compensation and Leadership Development Committee’s deliberations
concerning his own compensation nor the compensation of Dr. Malievskaia, our CIO,Chief Innovative Officer, because of their spousal relationship. Our Chief Executive Officer, Mr. Nath does not participate in the Compensation and Leadership Development Committee's deliberations concerning his own compensation. Role of Management In discharging its responsibilities, the Compensation and Leadership Development Committee works with management, including our CEO.Chief Executive Officer. Our management assists the Compensation and Leadership Development Committee by providing information on corporate and individual performance, market compensation data and management’s perspective on compensation matters. In addition, at the beginning of each year, our CEOChief Executive Officer reviews the performance of our other executive officers, including our other NEOs (other than our CIO, as discussed above),named executive officers based on our achievement of our corporate goals and each executive officer’s overall performance during that year. The Compensation and Leadership Development Committee solicits and reviews our CEO’sChief Executive Officer’s recommendations for base salary increases, annual cash bonuses, annual equity awards and any other compensation opportunities for our other executive officers, including our other NEOs (other than our CIO),named executive officers, and considers our CEO’sChief Executive Officer’s recommendations in determining such compensation. As discussed above, while Mr. Goldsmith served as our Chief Executive Officer during 2022, he did not review the performance of our Chief Innovation Officer nor recommend any base salary increases, annual cash bonuses, annual equity awards and any other compensation opportunities for our Chief Innovation Officer. Role of Compensation Consultant The Compensation and Leadership Development Committee engages an external compensation consultant to assist it by providing information, analysis and other advice relating to our executive compensation program. For 2021,2022, the Compensation and Leadership Development Committee engaged Aon as its independent compensation consultant to advise on executive compensation matters including: review and analysis of the compensation for our executive officers, including our NEOs;named executive officers; research, development and review of our compensation peer group; and support on other compensation matters as requested throughout the year.
Aon reports directly to the Compensation and Leadership Development Committee and to the Compensation and Leadership Development Committee chair. Aon also coordinates with our management for data collection and job matching for our executive officers. The Compensation and Leadership Development Committee reviewed its relationship with Aon and considered Aon’s independence in light of all relevant factors, including those set forth in the Exchange Act and in applicable Nasdaq listing rules. The Compensation and Leadership Development Committee concluded that the work performed by Aon and Aon’s senior advisors involved in the engagements did not raise any conflict of interest. In reaching these conclusions, our Compensation and Leadership Development Committee considered the factors set forth in the SEC rules and the applicable Nasdaq rules. Role of Market Data For purposes of comparing our executive compensation against the competitive market, the Compensation and Leadership Development Committee reviews and considers the compensation levels and practices of a group of peer companies. This compensation peer group consists of public biotechnology companies that are similar to us in terms of market capitalization, stage of development and number of employees. As a Nasdaq-listed health care company with operations in the United StatesU.S. and Europe, we operate within a global marketplace for talent. Given that the market for experienced health care executive talent is competitive, particularly in the United States,U.S., the Compensation and Leadership Development Committee references the U.S. market as the leading indicator for remuneration levels and practices. The Committee also considers the general U.K. compensation frameworks when making decisions on executive compensation. The Compensation and Leadership Development Committee reviews our compensation peer group annually and makes adjustments to our peer group if necessary, taking into account changes in both our business and our peer companies’ businesses. The Compensation and Leadership Development Committee also uses market data—from our compensation peer group and from a life sciences cut of the Radford Global Compensation Database—as one factor in evaluating whether the compensation for our executive officers is competitive in the market. The Compensation and Leadership Development Committee and the Board, of Directors, as applicable, also rely on their own knowledge and judgment in evaluating market data and making compensation decisions. To determine the composition of the peer group for 2021, which was established in connection with2022, the IPO in July 2020, the Compensation and Leadership Development Committee considered the following criteria: publicly-traded companies listed in the United States (including both U.S.-headquartered and European-headquartered companies), with a preference towards companies with a recent IPO (i.e., within the past five years); companies in the pre-commercial biotechnology or health care technology sectors, with preference towards mental health care and healthcare technology platform companies, as appropriate;
similar market capitalization—within a range of approximately 0.33x to approximately 3.0x our anticipated market capitalization at IPO;in mid-2021; the stage of development of each company’s development candidates;candidates, with a focus on companies with Phase 2 clinical programs (our stage of development in mid-2021); and similar headcount—within a range of 2530 to 250300 employees based on our then headcount of roughly 5090 full-time employees. This analysis led to the selection of the following peer group which was used to make the relevant compensation assessments for 20212022 for purposes of establishing 20212022 annual base salary, and target bonus and equity awards for our NEOs. We alsonamed executive officers and used thethis peer group market data to determine at-IPO equity awards we made tosupport our NEOs in 2020, which served asnegotiations with our long-term incentive compensation for 2021.new executive officers, our Chief Executive Officer and our Chief Legal Officer and General Counsel, who were hired during 2022. 20212022 Compensation Peer Group
| | | | | | | | | | | | | | | AC Immune SA | CareDx, Inc. | Orchard Therapeutics plc | | Adaptimmune Therapeutics plc | Constellation Pharmaceuticals, Inc. | Prothena Corporation plc | | Applied Molecular Transport | Crinetics Pharmaceuticals, Inc. | PureTech Health | | Arcus Biosciences, Inc. | Intra-Cellular Therapies, Inc. | Replimmune Group, Inc. | | ATAI Life Sciences SA | Karuna Therapeutics, Inc. | Rocket Pharmaceuticals, Inc. | | Autolus Therapeutics plc CareDx, Inc.
Constellation Pharmaceuticals, Inc.
Crinetics Pharmaceuticals, Inc.
| | Fulgent Genetics, Inc.
Livongo Health, Inc.
Magenta Therapeutics, Inc. Merus N.V.
Myovant Sciences Ltd.
NantHealth, Inc.
NextCure, Inc.
| | Orchard Therapeutics plc
Replimmune Group
Rocket Pharmaceuticals, Inc.
Scholar Rock Holding Corporation Syros Pharmaceuticals,
| | Axsome Therapeutics, Inc. | Merus N.V. | Translate Bio, Inc. | | Bicycle Therapeutics plc | Myovant Sciences Ltd. | Y-mAbs Therapeutics, Inc; | Fulcrum Therapeutics, Inc. | | | | |
PRIMARY ELEMENTS OF EXECUTIVE COMPENSATION PROGRAM The primary elements of our executive compensation program are:base salary; short-term incentive compensation in the form of annual cash bonuses; and long-term incentive compensation in the form of annual equity awards. Our executive officers, including our NEOs,named executive officers, are also eligible to participate in our standard employee benefit plans, such as our health and welfare benefits plans, and defined contribution retirement plans on the same basis as our other employees.employees in the U.S. or U.K., as applicable. In addition, as described below, our executive officers, including our NEOs,named executive officers, are entitled to certain change-in-control severance payments and benefits pursuant to their employment agreements, described herein. Base Salary We pay base salaries to our executive officers, including our NEOs,named executive officers, to provide a market competitive fixed remuneration that reflects the responsibilities of the role undertaken, the experience of the individual, and their performance in the role over time. At the time of hire, base salaries are determined for our executive officers, including our NEOs,named executive officers, based on the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above. With the exception of 2021 (as described below), typically,Typically, at the beginning of each year, the Compensation and Leadership Development Committee reviews base salaries for our executive officers, including our NEOs,named executive officers, based on such factors to determine if an increase is appropriate. In addition, base salaries may be adjusted in the event of a promotion or significant change in responsibilities. 20212022 Annual Base Salary
In September 2020, upon completion of our IPO,January 2022, the Compensation and Leadership Development Committee implemented market-basedbase salary adjustments to reflect our status as a newly-public company. As competitiveincreases of 2% for the named executive officers, who were employed at that time, after considering rising inflation rates. Each of Mr. Nath's and Mr. Owen's base salaries were implementeddetermined through negotiations when they were hired. | | | | | | | | | | | | Named Executive Officer (1) | 2021 Annual
Base Salary | 2022 Annual
Base Salary | Percentage
Increase | | Kabir Nath(2) | $— | $580,000 | N/A | | George Goldsmith (3) | $525,768 | $536,283 | 2.0% | | Matthew Owens(4) | $— | $371,130 | N/A | | Ekaterina Malievskaia | $371,130 | $378,553 | 2.0% |
(1) All amounts, except those for Mr. Nath, have been converted from GBP to USD using the 2022 average FX rate (£1:$1.2371). (2) Kabir Nath was appointed as our Chief Executive Officer effective August 1, 2022, with his base salary established at that time in the latterU.S. dollars. (3) In connection with his transition to Executive Chair effective August 1, 2022, Mr. Goldsmith's base salary was adjusted to £346,800 ($429,026). (4) Matthew Owens was appointed as our Chief Legal Officer and General Counsel effective February 1, 2022, with his
half of 2020 in connection with the IPO, the Compensation Committee did not approve any additional increases for 2021, with base salaries for the NEOs remaining at the same levels as were approved at IPO.
| | | | | | | | | | | | Named Executive Officer (1) | 2020 Post-
IPO Annual
Base Salary | 2021 Annual
Base Salary | Percentage
Increase | | George Goldsmith | $584,658 | $584,658 | 0.0% | | Piers Morgan | $440,213 | $440,213 | 0.0% | | Ekaterina Malievskaia | $412,700 | $412,700 | 0.0% | | Nate Poulsen | $370,000 | $370,000 | 0.0% | Guy Goodwin (2) | N/A | $446,335 | N/A |
(1) All amounts, except those for Mr. Poulsen, have been converted from GBP to USD using the 2021 average FX rate (£1:$1.3757).
(2) Guy Goodwin was appointed as our Chief Medical Officer in July 2021, with an August 2021 start date, and his base salary was established at that time.
The actual base salaries paid to our NEOsnamed executive officers in 20212022 are set forth in the “Summary Compensation Table” below. Short-Term Incentive Compensation Annual Cash Bonuses We provide short-term incentive compensation opportunities to our executive officers, including our NEOs,named executive officers, in the form of annual cash bonuses to incentivize and award delivery of the Company’s strategy and corporate objectives on an annual basis. For 2021,2022, we focuseddetermined annual cash bonuses based on a review of our overall corporate performance to determine the cash incentives of our CEO and after discussion with management, other NEOs, with some discretion applied based on individual achievements in the year. Going forward, for 2022, we will incorporate a distinct individual performance assessment for each of the NEOs beyond the CEOnamed executive officers to recognize their individual and team objectives within their respective functional areas. Performance Goals At the beginning of each year, the Board of Directors discusses with the CEOChief Executive Officer the annual corporate performance objectives that are intended to be the most significant drivers of our short-term and long-term success. After the end of the relevant financial year, the Compensation and Leadership Development Committee assesses the results of the corporate goals, reviews management’s self-assessment, evaluates specific achievements that advanced the prior year’s corporate objectives, and determines our overall success in the prior year. The Compensation and Leadership Development Committee considers our CEO’sChief Executive Officer’s recommendations, and independently reviews and approves the total percentage achievement level for each of the other NEOs.named executive officers. Target Annual Bonuses At the time of hire, the target annual bonus is determined for each of our NEOs,named executive officers, and at the beginning of each year, the Compensation and Leadership Development Committee reviews and determines whether to change the target annual bonus for each such individual. The Compensation and Leadership Development Committee considers the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above, with an emphasis on market data from our compensation peer group for comparable positions. Target annual bonuses represent a specific percentage of annual base salary. At the time of our IPO, we adjusted our targets based on a review of peer public companies. Each year, we evaluate our target annual bonuses relative to our executive peer group and adjust the targets, as appropriate, to stay aligned with our compensation philosophy. The last undertaking of this analysis occurred around the time of our IPO in September 2020, whenIn January 2022, we adjusted Mr. Goldsmith’s target from 50%55% to 55%,60%. Dr. Malievskaia’s target from 40% toremained at 45%,. Each of Mr. Morgan’s target from 50% to 45%,Nath's and Mr. Poulsen’sOwen's target from 33% to 35%. We expect to undertake a further analysis this year.bonus for 2022 (60% and 40% of base salary, respectively) was established through negotiations when they were hired.
20212022 Annual Cash Bonuses
The 20212022 corporate goals and achievements are set forth below. The Compensation and Leadership Development Committee determines the range of our corporate performance from a threshold of 50% to a maximum of 125%. No bonus is paid to any executive officer unless 50% of the corporate goals are achieved. Corporate Goals and Achievements
Advance COMP360 for TRD: Prepare for a successful end-of-phase 2b meeting and a prompt launchTRD into Phase 3 trials – In November 2022, The New England Journal of phase 3 – Results ofMedicine, the world’s leading peer-reviewed medical journal, published the positive results from our Phase 2b study were delivered on timetrial of COMP360 psilocybin therapy for treatment resistant depression, or TRD. We transitioned to a Phase 3 company and as planned, despitelaunched a Phase 3 program in TRD, the uncertainties linked tofirst ever Phase 3 program of psilocybin, a unique achievement. We received Innovative Licensing and Access Pathway (ILAP) designation in the pandemic. We conducted a comprehensive regulatory engagement with the FDA and various European agencies, while ensuring operational readiness for Phase 3.U.K.
Build outAdvance Phase 2 trials of COMP360 for Anorexia Nervosa and PTSD – We launched our Phase 2 trial in anorexia nervosa, an area of critical unmet need with no FDA-approved pharmaceutical treatments available and high mortality rate for patients suffering from anorexia nervosa. We commenced patient recruitment in our Phase 2 trials in anorexia nervosa and PTSD.
Develop a portfoliopipeline of new indications for COMP360, new compoundsdrug and technologies thattechnology assets to increase the value of COMPASS while demonstrating commitment to transforming mental health – We have strengthened the potential to improve the safety, efficacy, and accessibilityintegration of our therapies – Clinical development programs for PTSDinternal and anorexia were initiated. We strengthened our drugexternal discovery capabilities throughand prioritized our Discovery Centercompound portfolio. We have identified potential prodrug lead candidates. We have continued development of our artificial intelligence model and other partnerships, successfully filing three PCT patents. In the areahave authored an article titled Psilocybin Therapy for Treatment Resistant Depression: Prediction of researching technologiesClinical Outcome by Natural Language Processing, which we have shared openly and submitted to improve safety, efficacya journal for publication. We deployed improved versions of our MyPathfinder app and efficiency, we developed a prototypeour Therapist COMPanion app, which are able to transcribe our patient session recordings, which is more cost efficient than externally available tools. We developed a secure and compliant centralised data storage repository and additional computational tools, including a proprietary web application allowing for confidential and secure recording reviews.support multiple clinical studies in different disease areas. Position COMPASS as a leading mental health care company, drive and fund future plansshape the narrative of mental health care transformation across all stakeholders and secure additional equity financing – We raised $165mconducted an intensive investor relations program and communications strategy, culminating in a secondary offeringour first Capital Markets Day event. However, conditions in the equity markets in the U.S. remain challenging, particularly in the biotechnology industry. We had cash and cash equivalents of American Depository Shares, above our target$143.2 million as of $140m, and have prepared for other fundraising opportunities.the end of 2022, which enable us to fund operations into 2024. COMP360 for TRD: Prepare for a successful and scalable commercial launch, should COMP360 receive regulatory approval, that will ensure access for as many patients as possible – We developed our commercial and patient access model at launch, including reimbursement codes, real world data and payer partnerships, services and a go-to-market model. We developed and tested the first version of a scalable therapist training platform, as well as a scalable patient support platform, in accordance with regulatory requirements. | | | | | | | | | | | | | • | | Develop a talented team and an organisation that makes rapid growth sustainable for employees – We strengthened talent hiring and people development capabilities and processes, including recruitment, onboarding, performance management, learning and development and equity, diversity and inclusion. We managed strong headcount growth, strengthened our People and IT capabilities, and maintained a score >85% on the engagement dimensions of our People survey.Develop a high-performing, mission-driven organization – We deployed our first career performance management system and developed our first management training curriculum. We managed strong headcount growth, growing by 59% during 2022, and maintained a very strong 39% net promoter score (according to Qualtrics XM Institute, a score of between 10 to 30% is good and a score of 30% or more is excellent). In 2022, we were certified a Most Loved Workplace by Best Practice Institute (BPI) and its Most Loved Workplaces® operation, which is a company that assesses and certifies a company as a workplace employees love based on internal surveys, external public ratings and interviews with corporate officials, ranking number 31 in the U.K.
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In January 2022,2023, the Compensation and Leadership Development Committee evaluated our achievement of the 20212022 corporate objectives. Based on our 20212022 results, the Compensation and Leadership Development Committee determined that we had not only achieved eachmost of our performancethe above corporate goals at target but had also achievedoverachieved certain stretch goals, in particular aroundelements related to developing technology assets under our above-described goal of "Develop a pipeline of new drug and technology assets to increase the continued developmentvalue of COMPASS while demonstrating commitment to transforming mental health" and commercial preparations for COMP360 for TRD and the extensionunderachieved our above-described goal of COMP360 to different indications.securing additional equity financing. Based on this assessment, the Compensation and Leadership Development Committee determined to fund the annual bonus pool at 110%100%, a percentage reached as a weighted average of scores against our corporate goals as applied to a maximum bonus of 125% and which reflected our above-target corporate performance.goals. The Compensation and Leadership Development Committee awarded bonuses at this funding level for the CEOChief Executive Officer and other NEOs,named executive officers, after evaluating each person’s contributions in light of company goals, with adjustments to award sizes for named executive officers other than each of our Chief Executive Officers, based on corporate achievement in applicable function and individual performance in the year. While all of our NEOs met their targets, exceptional performance was rewarded with payouts above 110%.
The table below sets forth the 20212022 annual base salaries, target annual cash bonuses, and the 20212022 annual cash bonuses earned by our NEOs.named executive officers. | | | | | | | | | | | | | | | | | | | | Named Executive Officer (1) | 2021 Annual Base Salary | Target Annual Cash Bonus (% of Annual Base Salary) | 2021 Payout (% of Target) | 2021
Annual
Cash Bonus | | George Goldsmith | $584,658 | 55% | 100% | $321,562 | | Ekaterina Malievskaia | $412,700 | 45% | 125% | $231,800 | Guy Goodwin (2) | $167,716 | 35% | 110% | $64,572 | Piers Morgan (3) | $440,213 | 45% | N/A (4) | $137,567 | | Nate Poulsen | $370,000 | 35% | 104% | $134,472 |
| | | | | | | | | | | | | | | | | | | | Named Executive Officer (1) | 2022 Annual Base Salary | Target Annual Cash Bonus (% of Annual Base Salary) | 2022 Payout (% of Target) | 2022 Annual Cash Bonus | Kabir Nath(2) | $580,000 | 60% | 100% | $145,000 | George Goldsmith(3) | $491,337 | 60% | 100% | $294,964 | Matthew Owens(4) | $371,130 | 40% | 96% | $133,131 | | Ekaterina Malievskaia | $378,563 | 45% | 96% | $163,539 |
(1) All amounts, except those for Mr. Poulsen,Nath, have been converted from GBP to USD using the 20212022 average FX rate (£1:$1.3757)1.2371). (2) Mr. GoodwinNath was appointed as our Chief MedicalExecutive Officer in July 2021, with aneffective August 2021 start date,1, 2022, and his target bonus was calculated based on a pro-rated salary from his point of hire to year-end. (3) A discretionary 2021 bonus payment of £100,000 ($137,567) was made to Mr. Morgan in connection with his continued fulfillment of his functionGoldsmith served as Chief FinancialExecutive Officer until the endAugust 1, 2022 and as Executive Chair between August 1, and December 31, 2022. His target bonus was calculated based on a pro-rated salary for each of 2021.these roles during 2022. (4) Mr. Morgan ceasedOwens was appointed as our Chief Legal Officer and General Counsel effective February 1, 2022 and his target bonus was calculated based on a pro-rated salary from his point of hire to be an employee of the Company on December 31, 2021 and was not entitled to his annual bonus.year-end.
Long-Term Incentive Compensation Long-term incentive compensation in the form of equity incentives aligns the interests of our executive officers, including our NEOs,named executive officers, with long-term shareholder interests and allows us to attract, incentivize, and retain staff in a competitive market. As a form of compensation, share-based incentives also enable us to more effectively manage the Company’s cash resources. In connection with the IPO, we adopted the COMPASS Pathways plc 2020 Share Option and Incentive Plan (the “2020 Plan”). The 2020 Plan allows for the grant of options, restricted share awards, restricted share unit awards (“RSUs”), other share or cash-based awards and dividend equivalent awards to employees, non-employee directors and consultants. At the time of hire, equity awards are granted to our executive officers, including our NEOs,named executive officers, based on the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above. WithMr. Nath and Mr. Owens joined us during 2022 and their equity awards were negotiated during the exceptionhiring process. The below table reflects the new hire grants negotiated with each of 2021 (as discussed above), typically,Mr. Nath and Mr. Owens.
| | | | | | | | | | | | | Named Executive Officer | New Hire Option Award | New Hire Restricted Share Unit Award | | Kabir Nath | 600,000 | 50,000 | | Matthew Owens | 100,000 | 12,400 |
Typically, at the beginning of each year, the Compensation and Leadership Development Committee determines the size and relative weighting of the annual equity awards for our executive officers, including our NEOs,named executive officers, it deems reasonable and appropriate based on such factors. The size and relative weighting is the same for each of our executive officers, including our NEOs,named executive officers, who are at the same level. In addition, the Compensation and Leadership Development Committee may deem it advisable to grant subsequent equity awards to our executive officers, including our NEOs,named executive officers, and may adjust their equity awards in the event of a promotion or significant change in responsibilities. As the Company made share option grants to executive officers, including our NEOs, at the time of IPO in September 2020 under the 2020 Plan, no additional equity grants were issued to Named Executive Officers during 2021, barring our Chief Medical Officer, who received a sign-on equity grant of 100,000 options that vest 25% on the one-year anniversary of the grant date and over 36 equal installments over the subsequent 36 months, subject to his continued service. With the help of our compensation consultant, we determine whether to grant additional equity awards, the mix of RSUs and options and the amount of equity awards to give to our executive officers based on benchmarking the position of each executive officer against the compensation paid to people in similar positions in our peer group.
In February 2022, the Compensation and Leadership Development Committee approved the following annual equity grants to our named executive officers employed at that time. | | | | | | | | | | | | | Named Executive Officer | Annual Option Award | Annual Restricted Share Unit Award | | George Goldsmith | 173,000 | 29,000 | | Ekaterina Malievskaia | 75,000 | 13,000 |
Employment Arrangements with our Named Executive Officers In connection with our IPO, the Compensation and Leadership Development Committee reviewed the employment agreements with our executive officers, including our NEOs,Mr. Goldsmith and Dr. Malievskaia, with a focus on public market practices and severance arrangements in the event of involuntary termination not in connection with a change in control and involuntary termination or good reason termination in connection with a change in control, and determined to revise the terms of employment agreements with our executive officers in line with prevailing market practice for our peer companies and prevailing practices in the NEO’snamed executive officer's jurisdiction of employment, providing similar terms to executives hired since the IPO.IPO, such as Mr. Nath and Mr. Owens. We engage our NEOsnamed executive officers using standard terms as set out in our executive employment agreements. These agreements set forth the
individual’s base salary and bonus target based on a percentage of annual base salary and entitle the executive officer to participate in our equity incentive plans, with the amount of such equity participation to be determined at the Compensation and Leadership Development Committee’s sole discretion, and other employee benefits generally available to our employees. If an executive officer is based outside the U.K., additional benefits and assistance with relocation may be provided which reflect local market norms or legislation. The agreements also prohibit our NEOsnamed executive officers from engaging directly or indirectly in competition with us, recruiting or soliciting our employees, diverting our customers to a competitor, or disclosing our confidential information or business practices. Our post-employment compensation arrangements set forth in the employment agreements are designed to provide reasonable compensation to executive officers who leave the Company under certain circumstances to facilitate their transition to new employment. Further, we seek to mitigate any potential employer liability and avoid future disputes or litigation by requiring a departing executive officer to sign a separation and release agreement acceptable to us as a condition to receiving post-employment compensation payments or benefits. Mr. Poulsen received severance payments consistent with the terms of his employment agreement in connection with his departure from the Company on December 31, 2021. Our Compensation and Leadership Development Committee and the Board of Directors do not consider specific amounts payable under these post-employment compensation arrangements when establishing annual compensation. It does believe, however, that these arrangements are necessary to offer compensation packages that are competitive. For more information on the service and employment agreements with our NEOsnamed executive officers and post-employment compensation arrangements, see the discussion under the headings “Employment Agreements, Change of Control and Severance Arrangements with Named Executive Officers” and “Potential Payments upon Termination or Change in Control” later in this Proxy Statement. Other Elements of Compensation Retirement Plans We currently maintain a 401(k) retirement savings plan for our U.S.-based employees, including any U.S.-based NEOs,named executive officers, who satisfy certain eligibility requirements. The U.S. Internal Revenue Code (the “Code”) allows eligible employees to defer a portion of their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k) plan. We currently contribute a 4% safe harbor match on employee contributions up to the statutory limit. We also maintain a defined contribution plan for U.K. employees, including any U.K.-based NEOs,named executive officers, who satisfy certain eligibility requirements. All employees who participate in the plan receive aan employer contribution, which is generally 3% contribution. Mr. Morgan received ancontribution and in some cases may be up to 8% contribution in line with the terms of his employment agreement. 2020 Share Option and Incentive Plan
In September 2020, we adopted the 2020 Plan. The 2020 Plan allows the Compensation Committee to make equity-based and cash-based incentive awards to our officers, employees, directors and other key persons (including consultants). The 2020 Plan is more fully described below, see “Grants of Plan Based Awards for Fiscal Year 2021.”
The 2020 Plan permits the granting of both options to purchase ordinary shares intended to qualify as incentive share options under Section 422 of the Code, and options that do not so qualify. The option exercise price of each option will be determined by our Compensation Committee but may not be less than 100% of the fair market value of our ordinary shares on the date of grant. The term of each option will be fixed by our Compensation Committee and may not exceed ten years from the date of grant. Our Compensation Committee development committee will determine at what time or times each option may be exercised.
Our Compensation Committee may award share appreciation rights subject to such conditions and restrictions as it may determine. Share appreciation rights entitle the recipient to ordinary shares, or cash, equal to the value of the appreciation in our share price over the exercise price. The exercise price of each share appreciation right may not be less than 100% of the fair market value of the ordinary shares on the date of grant.
Other Compensation Policies and Practices Policy Prohibiting Hedging and Pledging Our Insider Trading Policy prohibits our executive officers, the non-employee members of our Board of Directors and certain designated employees who in the course of the performance of their duties have access to material, non-public information regarding the Company from engaging in the following transactions: selling any of our securities that they do not own at the time of the sale (a “short sale”); buying or selling puts, calls, other derivative securities of the Company or any derivative securities that provide the economic equivalent of ownership of any of our securities or an opportunity, direct or indirect, to profit from any change in the value of our securities or engaging in any other hedging transaction with respect to our securities at any time; using our securities as collateral in a margin account; and pledging our securities as collateral for a loan (or modifying an existing pledge) unless the pledge has been approved by the Audit and Risk Committee of the Board of Directors. Tax and Accounting Considerations Taxation of “Parachute” Payments Sections 280G and 4999 of the U.S. Code provide that executive officers and directors who hold significant equity interests and certain other service providers may be subject to significant additional taxes if they receive payments or benefits in connection with a change in control of the company that exceeds certain prescribed limits, and that the company (or a successor) may forfeit a deduction on the amounts subject to this additional tax. We have not agreed to provide any executive officer, including any NEO,named executive officer, with a “gross-up” or other reimbursement payment for any tax liability that the executive officer might owe as a result of the application of Sections 280G or 4999 of the U.S. Code. Risk Assessment
Our Compensation Committee annually assesses our compensation plans, policies and practices for NEOs and other employees, including whether the policies and practices are reasonably likely to have a material adverse effect on us. We believe that the mix and design of our executive compensation plans and policies do not encourage management to assume excessive risks and are not reasonably likely to have a material adverse effect on us for the following reasons: we offer an appropriate balance of short and long-term incentives and fixed and variable amounts; our variable compensation provides enhanced incentives for executives to outperform and strong disincentives for executives to underperform against our Company goals and is based on a balanced mix of Company performance criteria; and the Board and compensation committee have the authority to adjust variable compensation as appropriate.
COMPENSATION & LEADERSHIP DEVELOPMENT COMMITTEE REPORT
The Compensation and Leadership Development Committee of our Board has reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K and contained in this proxy statement. Based on this review and discussion, the Compensation Committee has recommended to our Board that the Compensation Discussion and Analysis be included in this proxy statement.
The COMPASS Pathways plc Compensation and Leadership Development Committee
Annalisa Jenkins (Chair)
Jason Camm
David Norton
Wayne Riley
The information contained in this Compensation and Leadership Development Committee report shall not be deemed to be “soliciting material,” “filed” with the SEC, subject to Regulations 14A or 14C of the Exchange Act, or subject to the liabilities of Section 18 of the Exchange Act. No portion of this Compensation and Leadership Development Committee report shall be deemed to be incorporated by reference into any filing under the Securities Act, or the Exchange Act, through any general statement incorporating by reference in its entirety the proxy statement in which this report appears, except to the extent that we specifically incorporate this report or a portion of it by reference. In addition, this Compensation and Leadership Development Committee report shall not be deemed filed under either the Securities Act or the Exchange Act.
NAMED EXECUTIVE OFFICER COMPENSATION
SUMMARY COMPENSATION TABLE The following table provides information regardingshows the total compensation for services rendered in all capacities that was earnedpaid or accrued during the last two fiscal year indicated.years ended December 31, 2022 and 2021 to each individual who served as our principal executive officer during fiscal 2022 and our two next most highly compensated executive officers were serving as executive officers as of December 31, 2022. These individuals are our named executive officers. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Non-Equity | | | | | | | | | | | | | | | Incentive | | | | | | | | | | | | | | Option | Plan | | All Other | | | | | | | Salary | | Bonus | | | Awards | Compensation | | Compensation | | Total | Name and Principal Position (1) | | Year | | ($) | | ($) | | | ($) (2) | ($) | | ($) | | ($) | | George Goldsmith | | 2021 | | 584,658 | | | | | — | 321,562 | | 37,304 (3) | | 943,523 | | Chief Executive Officer | | 2020 | | 453,936 | | | | | 1,707,007 | 234,743 | | 34,113 | | 2,429,800 | | | 2019 | | 346,782 | | | | | — | — | | 28,752 | | 375,534 | Piers Morgan (4) | | 2021 | | 440,213 | | 137,567 (5) | | | 123,260 (6) | | | 35,217 (7) | | 736,256 | | Former Chief Financial Officer | | 2020 | | 262,523 | | | | | 1,377,094 | 149,207 | | 19,643 | | 1,808,467 | Guy Goodwin (8) | | 2021 | | 167,719 | | | | | 1,817,184 | 64,572 | | — | | 2,049,475 | | Chief Medical Officer | | — | | — | | | | | — | — | | — | | — | | Ekaterina Malievskaia | | 2021 | | 412,700 | | | | | — | 231,800 | | 24,635 (3) | | 669,134 | | Chief Innovation Officer | | 2020 | | 362,287 | | | | | 1,401,736 | 150,403 | | 23,708 | | 1,938,134 | | | 2019 | | 306,659 | | | | | — | — | | 21,027 | | 327,686 | Nate Poulsen (9) | | 2021 | | 370,000 | | | | | — | 134,472 | | 900,748 (10) | | 1,405,220 | | Former GC and Chief Legal Officer | | 2020 | | 370,000 | | | | | 722,133 | 107,250 | | 2,000 | | 1,201,383 | | 2019 | | 325,000 | | | | | 330,664 | — | | — | | 655,664 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Stock | | Option | | | | All Other | | | | | | | Salary | | Bonus | | Awards | | Awards | | | | Compensation | | Total | | Name and Principal Position(1) | | Year | | ($) | | ($) (2) | | ($) (3) | | ($) (3) | | | | ($) | | ($) | | Kabir Nath (4) | | 2022 | | 243,123 | | 145,000 | | 754,668 | | 6,422,963 | | | | 77,822 (5) | | 7,643,576 | | Chief Executive Officer | | 2021 | | — | | — | | — | | — | | | | — | | — | | George Goldsmith (6) | | 2022 | | 491,337 | | 294,964 | | 418,629 | | 1,732,031 | | | | 40,070 (7) | | 2,977,030 | | Former Chief Executive Officer | | 2021 | | 584,658 | | 321,562 | | — | | — | | | | 37,304 (7) | | 943,524 | | Matthew Owens(8) | | 2022 | | 339,619 | | 133,131 | | 179,000 | | 1,004,560 | | | | 155,879 (9) | | 1,812,188 | | General Counsel and Chief Legal Officer | | 2021 | | — | | — | | — | | — | | | | — | | — | | Ekaterina Malievskaia | | 2022 | | 378,563 | | 163,549 | | 187,661 | | 750,880 | | | | 25,802 (10) | | 1,506,456 | | Chief Innovation Officer | | 2021 | | 412,700 | | 231,800 | | — | | — | | | | 24,635 (10) | | 669,135 |
(1) All 2022 amounts, except those for Mr. Poulsen,Nath, have been converted from GBP to USD using the 2022 average FX rate (£1:$1.2371). All 2021 amounts have been converted from GBP to USD using the 2021 average FX rate (£1:$1.3757). (2) The amounts reported in this column represent bonuses paid to each named executive officer based on the Compensation and Leadership Development Committee’s determination of performance against 2022 goals in its discretion. (3) The amount reported in the Stock Awards and Option Awards column represents the aggregate grant date fair value of time-based RSUs and time-based share options granted to each of the NEOsnamed executive officers in the applicable year, calculated in
accordance with the provisions of FASB ASC Topic 718. The assumptions we used in calculating these amounts are included in Note 10 of our audited consolidated financial statements for the year ended December 31, 20212022 included in our Annual Report on Form 10-K, filed with the SEC on February 24, 2022.28, 2023. The amounts reported in the Summary Compensation Table for these time-based option awardsRSUs and options may not represent the amounts that the NEOsnamed executive officers will actually realize from the awards. Whether, and to what extent, a NEOnamed executive officer realizes value will depend on our actual operating performance, share price fluctuations and the NEO’snamed executive officer’s continued employment. (3)(4) Effective August 1, 2022, Mr. Nath was appointed as our Chief Executive Officer and a member of our Board. The amount reported for salary represents the amount earned following his commencement of employment, and the amount of his annual bonus was prorated to reflect his partial year of employment.
(5) All other compensation received byfor Mr. Nath consists of (i) housing allowance of £60,000 ($74,228), (ii) 401(k) company contributions of $1,794 and (iii) health savings account contributions of $1,800. (6) Effective August 1, 2022, Mr. Goldsmith transitioned to the role of Executive Chair, a position he held until December 31, 2022. The amount reported for salary represents the amount earned in his role as Chief Executive Officer until August 1, 2022 and Dr. Malievskaia relates tothe amount earned in his role as Executive Chair between August 1, 2022 and December 31, 2022. (7) All other compensation for Mr. Goldsmith consists of health insurance premiums paid under a separate policy than what is applicable to all other employees. (4) On December 31, 2021,(8) Effective February 1, 2022, Mr. Morgan’s resignation from the position ofOwens was appointed as our Chief FinancialLegal Officer became effective.
(5)A discretionary 2021 bonus payment of $137,567 was made to Mr. Morgan in connection with his continued fulfillment of his function as Chief Financial Officer until the end of 2021.
(6) As part of Mr. Morgan’s separation agreement with the Company, there were two modifications in relation to his previously granted options. This amount represented the additional charges the Company recognized as part of these modifications calculated in accordance with FASB ASC Topic 718.
(7) All other compensation received by Mr. Morgan relates to Company pension contributions of 8%.
(8) Dr. Goodwin joined us in July 2021 (with an August 2021 start date).and General Counsel. The amount reported for salary represents the amount earningearned following his commencement of employment, and the amount of his non-equity incentive compensationannual bonus was prorated to reflect his partial year of employment.
(9) On December 31, 2021,All other compensation for Mr. Poulsen employment termination with the Company became effective.Owens consists of (i) housing allowance of £110,000 ($136,085) and (ii) employer pension contributions of £16,000 ($19,794). (10) This amount represents the severance equalAll other compensation for Dr Malievskaia consists of health insurance premiums paid under a separate policy than what is applicable to nine months of his base salary ($277,500) plus an additional $615,000 paid to Mr. Poulsen upon termination of employment consistent with the terms of his employment agreement entered into in September 2020. This amount also includes $8,248 in 401(k) matching contributions by the Company.
GRANTS OF PLAN BASED AWARDS FOR FISCAL YEAR 2021
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | All Other | | | | Grant Date | | | | | Estimated Future Payouts | | Option Awards: | | | | Fair Value | | | | | Under Non-Equity Incentive | | Number of | | Exercise or | | Of Stock | | | | | Plan Awards (1) | | Securities | | Base Price of | | and Option | | | | | Threshold | | Target | | Maximum | | Underlying Options (3) | | Option Awards | | Awards (4) | | Name | | Grant Date | | ($) | | ($) | | ($) (2) | | (#) | | ($/Sh) | | ($) | George Goldsmith (5) | | — | | 160,781 | | 321,562 | | 401,952 | | — | | — | | — | Piers Morgan (5) | | — | | 99,048 | | 198,096 | | 247,620 | | — | | — | | — | Guy Goodwin (5) | | 8/16/2021 | | — | | — | | — | | 100,000 | | 30.27 | | 1,817,184 | | | — | | 29,351 | | 58,702 | | 73,377 | | — | | — | | — | Ekaterina Malievskaia (5) | | — | | 92,857 | | 185,715 | | 232,144 | | — | | — | | — | | Nate Poulsen | | — | | 64,750 | | 129,500 | | 161,875 | | — | | — | | — |
(1) The amounts shown reflect the target annual cash bonus for our NEOs, which are disclosed in the “2021 Annual Cash Bonuses” section of the above “Compensation Discussion and Analysis.” The actual amounts paid for 2021 are disclosed in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.
(2) The non-equity incentive plan award maximum can be modified by an individual performance modifier up to 125%.
(3) The amounts shown represent time-based share options granted pursuant to our 2020 Plan.
(4) The amount reported represents the aggregate grant date fair value of share options awarded to our NEOs during 2021, calculated in accordance with FASB, ASC Topic 718. Such grant date fair value does not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value of the share option reported in this column are set forth in Note 11 in our Annual Report on Form 10-K. The amount reported in this column reflects the accounting cost for these share option awards and does not correspond to the actual economic value that may be received by the NEOs upon the exercise of the share options or any sale of the shares.
(5)All amounts, except those for Mr. Poulsen, have been converted from GBP to USD using the 2021 average FX rate (£1:$1.3757).
2020 Share Option and Incentive Plan
In September 2020, we adopted the 2020 Plan. The 2020 Plan allows the Compensation Committee to make equity-based and cash-based incentive awards to our officers, employees, directors and other key persons (including consultants).
We have initially reserved 2,074,325 ordinary shares (the “Initial Limit”) for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by four percent of the outstanding number of ordinary shares on the immediately preceding December 31, or such lesser number of shares as determined by ourCompensation Committee (the “Annual Increase”). This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. The ordinary shares underlying any awards that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by us prior to vesting, satisfied without any issuance of shares, expire or are otherwise terminated (other than by exercise) under the 2020 Plan will be added back to the ordinary shares available for issuance under the 2020 Plan.
The maximum aggregate number of shares that may be issued in the form of incentive share options shall not exceed the Initial Limit cumulatively increased on January 1, 2022 and on each January 1 thereafter by the lesser of the Annual Increase for such year or 2,074,325 ordinary shares.
The 2020 Plan is administered by our Compensation Committee. Our Compensation Committee has full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants, and to determine the specific terms and conditions of each award, subject to the provisions of the 2020 Plan. Persons eligible to participate in the 2020 Plan will be those full or part-time officers, employees, non-employee directors and other key persons (including consultants) as selected from time to time by our Compensation Committee in its discretion.
The 2020 Plan permits the granting of both options to purchase ordinary shares intended to qualify as incentive share options under Section 422 of the Code, and options that do not so qualify. The option exercise price of each option will be determined by our Compensation Committee but may not be less than 100% of the fair market value of our ordinary shares on the date of grant. The term of each option will be fixed by our Compensation Committee and may not exceed 10 years from the date of grant. Our Compensation Committee will determine at what time or times each option may be exercised.
Our Compensation Committee may award share appreciation rights subject to such conditions and restrictions as it may determine. Share appreciation rights entitle the recipient to ordinary shares, or cash, equal to the value of the appreciation in our share price over the exercise price. The exercise price of each share appreciation right may not be less than 100% of the fair market value of the ordinary shares on the date of grant.
Our Compensation Committee may award restricted shares and restricted share units to participants subject to such conditions and restrictions as it may determine. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with us through a specified vesting period. Our Compensation Committee may also grant ordinary shares that are free from any restrictions under the 2020 Plan. Unrestricted shares may be granted to participants in recognition of past services or other valid consideration and may be issued in lieu of cash compensation due to such participant. Our Compensation Committee may grant cash bonuses under the 2020 Plan to participants, subject to the achievement of certain performance goals.
The 2020 Plan provides that in the case of, and subject to, the consummation of a “sale event” as defined in the 2020 Plan, all outstanding awards may be assumed, substituted or otherwise continued by the successor entity. To the extent that the successor entity does not assume, substitute or otherwise continue such awards, then (i) all share options and share appreciation rights will automatically become fully exercisable and the restrictions and conditions on all other awards with time-based conditions will automatically be deemed waived, and awards with conditions and restrictions relating to the attainment of performance goals may become vested and non-forfeitable in connection with a sale event in the Compensation Committee’s discretion and (ii) upon the effectiveness of the sale event, the 2020 Plan and all awards will automatically terminate. In the event of such termination, (i) individuals holding options and share appreciation rights will be permitted to exercise such options and share appreciation rights (to the extent exercisable) prior to the sale event, or (ii) we may make or provide for a cash payment to participants holding options and share appreciation rights equal to the difference between the per share cash consideration payable to shareholders in the sale event and the exercise price of the options or share appreciation rights (to the extent then exercisable).
Our Board of Directors may amend or discontinue the 2020 Plan and our Compensation Committee may amend the exercise price of options and amend or cancel outstanding awards for purposes of satisfying changes in law or any other lawful purpose but no such action may adversely affect rights under an award without the holder’s consent. Certain amendments to the 2020 Plan require the approval of our shareholders. No awards may be granted under the 2020 Plan after the date that is ten years from the date of shareholder approval.
OUTSTANDING EQUITY AWARDS AT 2021 FISCAL YEAR-END
The following table summarizes the options and restricted share units that we granted to our executive officers pursuant to the terms of our equity program established in our 2017 Equity Incentive Plan (the “2017 Plan”) and the 2020 Plan and were outstanding as of December 31, 2021:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | | | | | | | | | | | | | | | | | | | | | | | | | Market | | | | | | | | | | | Number of | | Value of | | | Number of Securities | | | | | | Shares or | | Shares or | | | Underlying Unexercised | | Option | | | | Units That | | Units That | | | Options | | Exercise | | Option | | Have Not | | Have Not | | | Exercisable | | Unexercisable | | Price | | Expiration | | Vested | | Vested | | Name | | (#) | | (#) | | ($) | | Date | | (#) | | ($) (1) | George Goldsmith (2) | | 35,500 | | 78,100 | | 17.00 | | 9/18/2030 | | | | | | (3) | | | | | | | | | | 30,739 | | 679,332 | Piers Morgan (4) | | 73,280 | | — | | 4.72 | | 3/30/2030 | | | | | | (5) | | 27,990 | | — | | 0.01 | | 6/30/2030 | | | | | | (6) | | 28,000 | | — | | 17.00 | | 9/18/2030 | | | | | Guy Goodwin (7) | | — | | 100,000 | | 30.27 | | 8/15/2031 | | | | | Ekaterina Malievskaia (8) | | 26,625 | | 58,575 | | 17.00 | | 9/18/2030 | | | | | | (9) | | | | | | | | | | 30,739 | | 679,332 | Nate Poulsen (10) | | 111,178 | | — | | 1.37 | | 7/20/2029 | | | | | | (11) | | 30,466 | | — | | 2.32 | | 3/30/2030 | | | | | | (12) | | 12,247 | | — | | 17.00 | | 9/18/2030 | | | | |
(1) Market value has been computed in accordance with SEC rules as the number of unvested shares or units multiplied by the closing price per share of our ADSs on The Nasdaq Global Select Market as of 12/31/2021 ($22.10).
(2) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is September 18, 2020. This grant was made under the 2020 Plan.
(3) The restricted share units are subject to 25% vesting upon the earlier of (i) the one year anniversary of the date of grant, or (ii) the first day following the six-month anniversary of the listing of the Company’s ordinary shares on any stock exchange on which the closing price of the shares is 20% higher than the listing price for at least five consecutive trading days. They vest quarterly thereafter over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is August 12, 2020. This grant was made under the 2017 Plan.
(4) Nominal options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is March 23, 2020. This grant was made under the 2017 Plan.
(5) Nominal options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is 30 June 2020. This grant was made under the 2017 Plan.
(6) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is September 18, 2020. This grant was made under the 2020 Plan.
(7) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is August 16, 2021. This grant was made under the 2020 Plan.
(8) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is September 18, 2020. This grant was made under the 2020 Plan.
(9) The restricted share units are subject to 25% vesting upon the earlier of (i) the one year anniversary of the date of grant, or (ii) the first day following the six-month anniversary of the listing of the Company’s ordinary shares on any stock exchange on which the closing price of the shares is 20% higher than the listing price for at least five consecutive trading days. They vest quarterly thereafter for three years, subject to continued service through each applicable vesting date. The vesting commencement date is August 12, 2020. This grant was made under the 2017 Plan.
(10) Nominal options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is June 5, 2019. This grant was made under the 2017 Plan.
(11) Nominal options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is June 5, 2019. This grant was made under the 2017 Plan.
(12) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is September 18, 2020. This grant was made under the 2020 Plan.
OPTION EXERCISES AND STOCK VESTED IN FISCAL YEAR 2021
The following table sets forth the number of shares acquired and the value realized upon exercises of share options and vesting of RSUs during the fiscal year ended December 31, 2021 by each of our NEOs.
| | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | | | | | | | | | | | Number of Shares | | Value Realized | | Number of Shares | | Value Realized | | | Acquired on Exercise | | on Exercise | | Acquired on Vesting | | on Vesting | | Name | | (#) | | ($) (1) | | (#) | | ($) (2) | | George Goldsmith | | — | | — | | 13,971 | | 463,891 | | Piers Morgan | | 94,229 | | 1,690,293 | | — | | — | | Guy Goodwin | | — | | — | | — | | — | | Ekaterina Malievskaia | | — | | — | | 13,971 | | 463,891 | | Nate Poulsen | | 92,195 | | 2,867,112 | | 12,570 | | 417,374 |
(1) The value realized upon the exercise of share options is calculated by (a) subtracting the share option exercise price from the market price on the date of exercise to get the realized value per share, and (b) multiplying the realized value per share by the number of shares underlying the share options exercised.
(2) The value realized upon vesting of RSUs is calculated by multiplying the number of shares of RSUs vested by the market price on the vest date.employees.
EMPLOYMENT AGREEMENTS, CHANGE OF CONTROL AND SEVERANCE ARRANGEMENTS WITH NAMED EXECUTIVE OFFICERS George Goldsmith GeneralCEO Terms. In September 2020, we entered into an employment agreement with Mr. Goldsmith in connection with his continued employment as our Chief Executive Officer. This agreement was amended effective August 1, 2022 in connection with Mr. Goldsmith's transition to Executive Chair to, among other things, adjust his salary and eliminate the notice and payment upon termination provisions in his employment agreement.
Mr. Goldsmith’s employment agreement providesprovided for an initial base salary of £425,000 ($584,658)525,768), which is subject to annual review and redetermination. This salary was increased to £433,500 ($596,351)536,283), effective January 1, 2022. In addition, Mr. Goldsmith iswas entitled to participate in our executive variable cash compensation program. In his employment agreement, Mr. Goldsmith is eligible to earn an annual incentive bonus, with a target bonus amount of 55% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances) as determined by our Board of Directors in its discretion. Mr. Goldsmith iswas only entitled to payment of a bonus payment if he is in the Company’s employment and not under notice, given or received, on the date that the bonus is paid and iswas not eligible for a bonus payment if he iswas subject to any disciplinary action or investigation at the date any bonus is being considered or paid. Mr. Goldsmith iswas also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time. Executive Chair Terms. In connection with his appointment as Executive Chair, Mr. Goldsmith's employment agreement was amended. Pursuant to the terms of the amended employment agreement, Mr. Goldsmith served as Executive Chairman until December 31, 2022, at which time his employment ended, without the need for notice by either party. Between August 1, 2022 and December 31, 2022, Mr. Goldsmith was entitled to an annual base salary of £346,800 (approximately $414,200). He was eligible to receive an annual incentive bonus for the year ending December 31, 2022, with a target bonus amount of 60% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances), notwithstanding the termination of his employment prior to the date of the bonus payment, provided, however, that such bonus amount was pro-rated to reflect his reduced salary for the period from August 1, 2022 to December 31, 2022. During this time, Mr. Goldsmith received no additional compensation for his services as a director of the Company. Kabir Nath General Terms. Effective August 1, 2022, we entered into an employment agreement with Mr. Nath in connection with his appointment as our Chief Executive Officer. The Employment Agreement has an initial term through the earlier to occur of (i) the date Mr. Nath relocates to the United Kingdom or (ii) December 31, 2023. On or before
December 31, 2023, Mr. Nath will re-locate to the United Kingdom and will enter into a new agreement on substantially similar terms to his current employment agreement and those of our other U.K.-based executives. Mr. Nath's employment agreement provides for an annual base salary of $580,000 (upon Mr. Nath's relocation to the United Kingdom, such salary will be paid in pound sterling (“GBP”) and be equal to the greater of (i) £431,000 GBP or (ii) the GBP equivalent of $580,000 U.S. dollars calculated at the then-prevailing exchange rate), which is subject to annual review and redetermination. Pursuant to his employment agreement, Mr. Nath is eligible to earn an annual incentive bonus, with a target bonus amount of 60% of his then-current annual base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances) as determined by our Board in its discretion. In addition, Mr. Nath will receive (i) a housing stipend of £12,000 per month through August 2023; (ii) a one-time reimbursement payment of up to $5,000 for attorneys’ fees; and (iii) a one-time cash payment of $250,000 when Mr. Nath relocates to the United Kingdom. Mr. Nath will receive no additional compensation for his services as a director of the Company. Mr. Nath is also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time. Payments Upon Termination. Either party may terminate the employment agreement upon ninety (90) days’ written notice. The Company may terminate the Employment Agreement at any time for “cause” (as such term is defined in the employment agreement). Mr. Nath may terminate the Employment Agreement upon thirty (30) days’ written notice for “good reason” (as such term is defined in the Employment Agreement), subject to Company’s right to cure the deficiency. In the event we terminate Mr. Nath’s employment without “cause” or Mr. Nath terminates his employment for “good reason”, Mr. Nath is entitled to a cash severance payment equal to one year’s annual salary plus the target annual bonus amount for the year in which such termination occurs. Matthew Owens General Terms. Effective February 1, 2022, we entered into an employment agreement with Mr. Owens in connection with his appointment as our Chief Legal Officer and General Counsel. Mr. Owens’ employment agreement provides for an initial base salary of £300,000 ($371,130), which is subject to annual review and redetermination. In addition, Mr. Owens is entitled to participate in our executive variable cash compensation program. Pursuant to his employment agreement, Mr. Owens is eligible to earn an annual incentive bonus, with a target bonus amount of 40% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances). To assist with his relocation to the U.K., we agreed to pay a cash contribution towards housing costs of £10,000 ($12,371) per month through August 2023 and to provide tax advisory services in connection with the preparation and filing of tax returns for the first two tax years of his employment. Mr. Owens is also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time. His employment agreement also provides for a pension contribution equivalent to 8% of his monthly base salary. Payments upon Termination.The Company may, in its discretion, terminate Mr. Goldsmith’sOwens' employment at any time with immediate effect by providing notice to Mr. GoldsmithOwens that it is exercising its right and will make a a payment in lieu of notice (“PILON”). Such PILON is equal to the base salary which Mr. GoldsmithOwens would be entitled to receive during the notice period of nine months less deductions required by law and will be paid within 28 days. Mr. Goldsmith is subject to immediate termination and is not entitled to any further payment, including any PILON which the Company is entitled to recover if payment was already made, other than amounts accrued as of the
termination date in the event he is terminated for certain reasons for cause, including gross misconduct, serious breach of his employment agreement, gross negligence or incompetence and certain other requirements, as set forth in his employment agreement. In the event Mr. Goldsmith is terminated for any reason, under most circumstances, the Company is required to reimburse him for any unused holiday entitlements.
Following service of notice to terminate the employment by either party, which is required to be given with not less than nine months’ prior written notice, the Company may place Mr. Goldsmith on garden leave for the whole or part of the remainder of his employment. Under garden leave, Mr. Goldsmith would receive his base salary for the period, but would not be entitled to receive any bonus or other incentive in respect of the period of garden leave.
If Mr. Goldsmith is terminated other than for misconduct, lack of capability or poor performance, or if Mr. Goldsmith terminates employment in response to a fundamental breach of contract by the Company within 12 months following a change of control of the Company (as defined in the employment agreement), subject to certain conditions, Mr. Goldsmith is entitled to (a) 18 months’ base salary, (b) the pro rata bonus Mr. Goldsmith would have received for the year in which his employment is terminated had he not been dismissed, but not including any pro rata bonus for a notice period which is not worked and (c) an amount equivalent to the cost to the Company of providing Mr. Goldsmith with his other employment benefits for 18 months.
Piers Morgan
General Terms. In September 2020, we entered into an employment agreement with Mr. Morgan in connection with his continued employment as our Chief Financial Officer.
Mr. Morgan’s employment agreement provided for an initial base salary of £320,000 ($440,224), which is subject to annual review and redetermination. In addition, Mr. Morgan was entitled to participate in our executive variable cash compensation program. Mr. Morgan was eligible to earn an annual incentive bonus, with a target bonus amount of 45% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances).A discretionary 2021 bonus payment of £100,000 ($137,570) was awarded to Mr. Morgan in connection with the continued fulfillment of his function as Chief Financial Officer until December 31, 2021. Mr. Morgan was also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time.
Settlement Agreement. On July 29, 2021, we entered into a settlement agreement with Mr. Morgan, which provided, among other things, that Mr. Morgan would receive (i) his salary up to his termination date of December 31, 2021, (ii) compensation for any outstanding holiday accrued and unused as of the termination date and (iii) his contractual benefits up to his termination date of December 31, 2021. Mr. Morgan did not receive any additional payments in connection with his voluntary termination with the Company.
As part of Mr. Morgan’s settlement agreement with the Company, there were two modifications in relation to his previously granted options regarding vesting condition accelerating some options to be vested by December 31, 2021 and expected terms changing from 90 days to 6 months after final employment date, which resulted in an additional charge of $123,260 for the Company under FASB ASC Topic 718.
Guy Goodwin
General Terms. In July 2021, we entered into an employment agreement with Dr. Goodwin in connection with his appointment as our Chief Medical Officer.
Dr. Goodwin’s employment agreement provides for a base salary of £324,450 ($446,346), which is subject to annual review and redetermination. In addition, Dr. Goodwin is entitled to participate in our executive variable cash compensation program. In his employment agreement, Dr. Goodwin is eligible to earn an annual incentive bonus, with a target bonus amount of 35% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances) as determined by our Board of Directors in its discretion. Dr. Goodwin is only entitled to payment of a bonus payment if he is in the Company’s employment on the date that the bonus is paid and is not eligible for a bonus payment if he is subject to any disciplinary action or investigation at the date any bonus is being considered or paid. Dr. Goodwin is also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time.
Payments upon Termination. The Company may, in its discretion, terminate Dr. Goodwin’s employment at any time with immediate effect by providing notice to Dr. Goodwin that it is exercising its right and will make a PILON. Such PILON is equal to the base salary which Dr. Goodwin would be entitled to receive during the notice period of three months less deductions required by law and will be paid within 28 days.
Dr. GoodwinOwens is subject to immediate termination and is not entitled to any further payment, including any PILON which the Company is entitled to recover if payment was already made, other than amounts accrued as of the termination date in the event he is terminated for certain reasons for cause, including gross misconduct, serious breach of hisher employment agreement, gross negligence or incompetence and certain other requirements, as set forth in hisher employment agreement. In the event Dr. GoodwinMr. Owens is terminated for any reason, under most circumstances, the Company is required to reimburse him for any unused holiday entitlements.
Following service of notice to terminate the employment by either party, which is required to be given with not less than threenine months’ prior written notice, the Company may place Dr. GoodwinMr. Owens on garden leave for the whole or part of the remainder of hisher employment. Under garden leave, Dr. GoodwinMr. Owens would receive his base salary for the period, but would not be entitled to receive any bonus or other incentive in respect of the period of garden leave. If Dr. GoodwinMr. Owens is terminated other than for misconduct, lack of capability or poor performance, or if Dr. GoodwinMr. Owens terminates employment in response to a fundamental breach of contract by the Company within 12 months following a change of control of the Company (as defined in the employment agreement), subject to certain conditions, Dr. GoodwinMr. Owens is entitled to (a) 12 months’ base salary, (b) the pro rata bonus Dr. GoodwinMr. Owens would have received for the year in which his employment is terminated had he not been dismissed, but not including any pro
rata bonus for a notice period which is not worked and (c) an amount equivalent to the cost to the Company of providing Dr. GoodwinMr. Owens with his other employment benefits for 12 months. Ekaterina Malievskaia General Terms. In September 2020, we entered into an employment agreement with Dr. Malievskaia in connection with her continued employment as our Chief Innovation Officer. Dr. Malievskaia’s employment agreement provides for an initial base salary of £300,000 ($412,710)371,130), which is subject to annual review and redetermination. This salary was increased to £306,000 ($420,964)378,563), effective January 1, 2022. In addition, Dr. Malievskaia is entitled to participate in our executive variable cash compensation program. In her employment agreement, Dr. Malievskaia is eligible to earn an annual incentive bonus, with a target bonus amount of 45% of her base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances). Dr. Malievskaia is also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time. Payments upon Termination. The Company may, in its discretion, terminate Dr. Malievskaia’s employment at any time with immediate effect by providing notice to Dr. Malievskaia that it is exercising its right and will make a PILON. Such PILON is equal to the base salary which Dr. Malievskaia would be entitled to receive during the notice period of nine months less deductions required by law and will be paid within 28 days. Dr. Malievskaia is subject to immediate termination and is not entitled to any further payment, including any PILON which the Company is entitled to recover if payment was already made, other than amounts accrued as of the termination date in the event he is terminated for certain reasons for cause, including gross misconduct, serious breach of her employment agreement, gross negligence or incompetence and certain other requirements, as set forth in her employment agreement. In the event Dr. Malievskaia is terminated for any reason, under most circumstances, the Company is required to reimburse him for any unused holiday entitlements. Following service of notice to terminate the employment by either party, which is required to be given with not less than nine months’ prior written notice, the Company may place Dr. Malievskaia on garden leave for the whole or part of the remainder of her employment. Under garden leave, Dr. Malievskaia would receive her base salary for the period, but would not be entitled to receive any bonus or other incentive in respect of the period of garden leave. If Dr. Malievskaia is terminated other than for misconduct, lack of capability or poor performance, or if Dr. Malievskaia terminates employment in response to a fundamental breach of contract by the Company within 12 months following a change of control of the Company (as defined in the employment agreement), subject to certain conditions, Dr. Malievskaia is entitled to (a) 12 months’ base salary, (b) the pro rata bonus Dr. Malievskaia would have received for the year in which his employment is terminated had she not been dismissed, but not including any pro rata bonus for a notice period which is not worked and (c) an amount equivalent to the cost to the Company of providing Dr. Malievskaia with her other employment benefits for 12 months.
2020 Share Option and Incentive Plan In September 2020, we adopted the 2020 Plan. The 2020 Plan allows the Compensation and Leadership Development Committee to make equity-based and cash-based incentive awards to our officers, employees, directors and other key persons (including consultants). We have initially reserved 2,074,325 ordinary shares (the “Initial Limit”) for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by four percent of the outstanding number of ordinary shares on the immediately preceding December 31, or such lesser number of shares as determined by ourCompensation and Leadership Development Committee (the “Annual Increase”). This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. The ordinary shares underlying any awards that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by us prior to vesting, satisfied without any issuance of shares, expire or are otherwise terminated (other than by exercise) under the 2020 Plan will be added back to the ordinary shares available for issuance under the 2020 Plan.
Nate PoulsenThe maximum aggregate number of shares that may be issued in the form of incentive share options shall not exceed the Initial Limit cumulatively increased on January 1, 2022 and on each January 1 thereafter by the lesser of the Annual Increase for such year or 2,074,325 ordinary shares.
General Terms. In SeptemberThe 2020 we entered into an employment agreement with Mr. Poulsen in connection with his continued employment asPlan is administered by our General CounselCompensation and Chief Legal Officer.
Mr. Poulsen’s employment agreement providedLeadership Development Committee. Our Compensation and Leadership Development Committee has full power to select, from among the individuals eligible for an initial base salaryawards, the individuals to whom awards will be granted, to make any combination of $370,000. In addition, Mr. Poulsen was entitledawards to participate in our executive variable cash compensation program. In his employment agreement, Mr. Poulsen was eligibleparticipants, and to earn an annual incentive bonus, with a target bonus amountdetermine the specific terms and conditions of 35%each award, subject to the provisions of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances). Mr. Poulsen was also2020 Plan. Persons eligible to participate in allthe 2020 Plan will be those full or part-time officers, employees, non-employee directors and other key persons (including consultants) as selected from time to time by our generally-available employee benefit plansCompensation and programs.Leadership Development Committee in its discretion.
Transition Agreement. On September 29, 2021, we entered into a transition agreement with Mr. Poulsen.UnderThe 2020 Plan permits the termsgranting of options to purchase ordinary shares intended to qualify as incentive share options under Section 422 of the transition agreement, Mr. Poulsen ceasedCode, options intended to servequalify as U.K. tax advantaged options under our company share option plan, or CSOP, which is a sub-plan under the General Counsel2020 Plan and Chief Legal Officeroptions that do not so qualify for any tax advantages. Other than the nominal cost options granted to non-U.S. tax persons in lieu of restricted share units, the option exercise price of each option will be determined by our Compensation and tookLeadership Development Committee but may not be less than 100% of the fair market value of our ordinary shares on the role of Chief Legal Officer, IP until his termination date. The transition agreement also provided, among other things, that Mr. Poulsen would receive (i) his salary up to his termination date of December 31, 2021, (ii) his contractual benefits up to his terminationgrant. The term of each option will be fixed by our Compensation and Leadership Development Committee and may not exceed ten years from the date of December 31, 2021,grant. Our Compensation and (iii)Leadership Development Committee development committee will determine at what time or times each option may be exercised.
Our Compensation and Leadership Development Committee may award share appreciation rights subject to such conditions and restrictions as it may determine. Share appreciation rights entitle the continued vestingrecipient to ordinary shares, or cash, equal to the value of his outstanding equity awards through his terminationthe appreciation in our share price over the exercise price. The exercise price of each share appreciation right may not be less than 100% of the fair market value of the ordinary shares on the date of December 31, 2021.grant. UnderOur Compensation and Leadership Development Committee may award restricted shares and restricted share units to participants subject to such conditions and restrictions as it may determine. These conditions and restrictions may include the termsachievement of hiscertain performance goals and/or continued employment agreementwith us through a specified vesting period. Our Compensation and transition agreement,Leadership Development Committee may also grant ordinary shares that are free from any restrictions under the 2020 Plan. Unrestricted shares may be granted to participants in recognition of past services or other valid consideration and may be issued in lieu of cash compensation due to such participant. Our Compensation and Leadership Development Committee may grant cash bonuses under the 2020 Plan to participants, subject to the achievement of certain performance goals.
The 2020 Plan provides that in the case of, and subject to, the consummation of a “sale event” as defined in the 2020 Plan, all outstanding awards may be assumed, substituted or otherwise continued by the successor entity. To the extent that the successor entity does not assume, substitute or otherwise continue such awards, then (i) all share options and share appreciation rights will automatically become fully exercisable and the restrictions and conditions on all other awards with time-based conditions will automatically be deemed waived, and awards with conditions and restrictions relating to the attainment of performance goals may become vested and non-forfeitable in connection with his departurea sale event in the Compensation and Leadership Development Committee’s discretion and (ii) upon the effectiveness of the sale event, the 2020 Plan and all awards will automatically terminate. In the event of such termination, (i) individuals holding options and share appreciation rights will be permitted to exercise such options and share appreciation rights (to the extent exercisable) prior to the sale event, or (ii) we may make or provide for a cash payment to participants holding options and share appreciation rights equal to the difference between the per share cash consideration payable to shareholders in the sale event and the exercise price of the options or share appreciation rights (to the extent then exercisable). Our Board may amend or discontinue the 2020 Plan and our Compensation and Leadership Development Committee may amend the exercise price of options and amend or cancel outstanding awards for purposes of satisfying changes in law or any other lawful purpose but no such action may adversely affect rights under an award without the holder’s consent. Certain amendments to the 2020 Plan require the approval of our shareholders. No awards may be granted under the 2020 Plan after the date that is ten years from employment with the Company and subject to certain other conditions, Mr. Poulsen was entitled to nine months of his base pay and an additional $615,000 as severance. Mr. Poulsen was also entitled to his earned base salary, any unused vacation time, unpaid expense reimbursements and any vested benefits through the termination date. Since Mr. Poulsen did not breach any of his continuing obligations through his termination date of December 31, 2021, he received $892,500 (an amount equal to nine months of his base salary plus an additional $615,000) as severance and $134,472 for his 2021 annual incentive compensation. Potential Payments upon Termination or Change in Control
The following table sets forth the estimated payments payable to our NEOs upon termination of employment under various circumstances. Payments and benefits are estimated assuming that the triggering event took place on December 31, 2021. There can be no assurance that a triggering event would produce the same or similar results as those estimated below if such event occurs on any other date or at any other price, of if any other assumption used to estimate potential payments and benefits is not correct. Due to the number of factors that affect the nature and amount of any potential payments or benefits, any actual payments and benefits may be different. GBP amounts have been converted to USD using the 2021 average FX rate (£1:$1.3757).shareholder approval.
| | | | | | | | | | | | | | | | | | | Name | Triggering Event (1) | Cash based on Base Salary ($)(2) | Pro Rated Annual Bonus ($) | Benefits ($)(3) | Accrued Vacation ($)(4) | | George Goldsmith | Notice of immediate termination by the Company without cause | 438,504 | — | — | 59,637 | | Notice by the Company or employee to termination and the employee is on garden leave | 438,504 | — | — | — | | Termination by the Company or by the employee in response to a fundamental breach of contract by the Company within 12 months following a Change in Control (5) | 877,009 | 321,570 | 55,956 | 59,637 | | Termination for cause | — | — | — | 58,637 | | Guy Goodwin | Notice of immediate termination by the Company without cause | 111,584 | — | — | 44,633 | | Notice by the Company or employee to terminate and the employee is on garden leave | 111,584 | — | — | — | | Termination by the Company or by the employee in response to a fundamental breach of contract by the Company within 12 months following a Change in Control(5) | 446,335 | 64,572 | — | 44,633 | | Termination for cause | — | — | — | 44,633 | | Ekaterina Malievskaia | Notice of immediate termination by the Company without cause | 309,525 | — | — | 41,270 | | Notice by the Company or employee to terminate and the employee is on garden leave | 309,525 | — | — | — | | Termination by the Company or by the employee in response to a fundamental breach of contract by the Company within 12 months following a Change in Control(5) | 412,700 | 231,800 | 24,635 | 41,270 | | Termination for cause | — | — | — | 41,270 |
(1) The vesting offollowing table sets forth information concerning the outstanding equity awards is only accelerated in the event of termination at the discretionheld by each of the administrator.named executive officers as of December 31, 2022:
(2) In | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | Stock Awards | | | | | | | | | | | Market | | | | | | | | | Number of | | Value of | | Number of Securities | | | | | Shares or | | Shares or | | Underlying Unexercised | | Option | | | Units That | | Units That | | Options | | Exercise | | Option | Have Not | | Have Not | | Exercisable | | Unexercisable | | Price | | Expiration | Vested | | Vested | | Name | (#) | | (#) | | ($) | | Date | (#) | | ($) (1) | | Kabir Nath (2) | — | | 600,000 | | 14.94 | | 7/31/2032 | | | | | (5) | | | | | | | | 50,000 | | 401,500 | | George Goldsmith (3) | 63,900 | | 49,700 | | 17.00 | | 9/18/2030 | | | | | (4) | 36,042 | | 136,958 | | 15.75 | | 1/31/2032 | | | | | (6) | | | | | | | | 19,561 | | 157,075 | | (7) | | | | | | | | 29,000 | | 232,870 | | Matthew Owens (8) | — | | 100,000 | | 15.75 | | 1/31/2032 | | | | | (9) | | | | | | | | 12,400 | | 99,572 | | Ekaterina Malievskaia (3) | 47,925 | | 37,275 | | 17.00 | | 9/18/2030 | | | | | (4) | 15,625 | | 59,375 | | 15.75 | | 1/31/2032 | | | | | (6) | | | | | | | | 19,561 | | 157,075 | | (7) | | | | | | | | 13,000 | | 104,390 |
(1) Market value has been computed in accordance with SEC rules as the eventnumber of immediate termination without causeunvested shares or units multiplied by the Company,closing price per share of our ADSs on The Nasdaq Global Select Market as of December 30, 2022 ($8.03). (2) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is August 1, 2022. This grant was awarded outside the 2020 Plan pursuant to the inducement grant exception under Nasdaq Listing Rule 5635(c). (3) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is September 18, 2020. This grant was made under the 2020 Plan. (4) Options vest over a 4 year service period in 48 equal monthly installments, subject to continued service through each applicable vesting date. The vesting commencement date is February 1, 2022. This grant was made under the 2020 Plan. (5) The restricted share units vest in four equal annual installments, subject to continued service through each applicable vesting date. The vesting commencement date is August 1, 2022. This grant was made under the 2020 Plan. (6) The restricted share units are subject to 25% vesting upon the earlier of (i) the one year anniversary of the date of grant, or if(ii) the executive orfirst day following the six-month anniversary of the listing of the Company terminate’s ordinary shares on any stock exchange on which the executive’s employment,closing price of the shares is 20% higher than the listing price for at least five consecutive trading days. They vest quarterly thereafter over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is August 12, 2021. This grant was made under the 2017 Plan. (7) The restricted share units vest in four equal annual installments, subject to continued service through each applicable vesting date. The vesting commencement date is February 1, 2022. This grant was made under the 2020 Plan. (8) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and assuming the executivebalance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is placed on garden leave forFebruary 1, 2021. This grant was made under the full2020 Plan. (9) The restricted share units vest in four equal annual installments, subject to continued service through each applicable notice period, (i) Mr. Goldsmith and Dr. Malievskaia are each entitled to nine months’ salary and (ii) Dr. Goodwinvesting date. The vesting commencement date is entitled to three months salary.February 1, 2022. This grant was made under the 2020 Plan.
(3) Benefits received byPAY VERSUS PERFORMANCE
The following table shows the total compensation for each of our principal executive officers (each a "PEO") and the average compensation for our other named executive officers during the last two fiscal years ended December 31, 2022 and 2021 compared to our net income and total shareholder return for the last two fiscal years.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Year | Summary Compensation Table Total for First PEO(1) | Summary Compensation Table Total for Second PEO(2) | Compensation Actually Paid to First PEO(1)(4) | Compensation Actually Paid to Second PEO(2)(5) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers(3) | Average Compensation Actually Paid to Non-PEO Named Executive Officers(3)(6) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return | Net Income | | (a) | (b) | (b) | (c) | (c) | (d) | (e) | (f) | (g) | | 2022 | 2,977,030 | 7,643,576 | 786,153 (4) | 3,848,172 (4) | 1,659,322 | 639,499 (4) | 47 | (91,505,000) | | 2021 | 943,524 | — | (2,553,688) (5) | — | 1,215,021 | (1,893,965) (5) | 130 | (71,742,000) |
(1) Mr. Goldsmith served as our PEO throughout 2021 and Dr.during 2022 until July 31, 2022. (2) Mr. Nath served as our PEO beginning on August 1, 2022.
(3) For fiscal 2022, our non-PEO named executive officers were Matthew Owens and Ekaterina Malievskaia. For fiscal 2021, our non-PEO named executive officers were Ekaterina Malievskaia, upon termination relates to health insurance. Dr.Guy Goodwin, does not participate in our benefits plan.Piers Morgan (our former Chief Financial Officer) and Nate Poulsen (our former General Counsel).
(4) Assumes each Named Executive Officer has 26 accrued but untaken holidays. InThe 2022 compensation actually paid to our PEO and the event any Named Executive Officer ceasesaverage compensation actually paid to be an employeeour non-PEO named executives reflects the following adjustments from total compensation reported in the Summary Compensation Table:
| | | | | | | | | | | | | First PEO | Second PEO | Average of Non-PEO's | | Total compensation reported in the Summary Compensation Table | 2,977,030 | 7,643,576 | 1,659,322 | | Deduct the equity compensation reported in the Summary Compensation Table in column (Stock Awards) and column (Option Awards), | (2,150,660) | (7,177,631) | (1,061,051) | | Add year end fair value all awards granted during 2022 that are outstanding and unvested as of the end of the fiscal year; | 881,954 | 3,382,227 | 476,050 | | Add change in fair value (from prior year-end) of prior year equity awards that are unvested and outstanding | (854,742) | — | (354,936) | | Add for awards that were granted and vested in 2022, the fair value as of the vesting date | 264,337 | — | 57,296 | | Add the change in fair value (from prior year-end to vesting date) of prior year equity awards that vested in the 2022 | (331,766) | — | (137,183) | | Compensation Actually Paid for Fiscal Year 2022 | 786,153 | 3,848,172 | 639,498 |
(5) The 2021 compensation actually paid to our first PEO and the average compensation actually paid of our non-PEO named executives reflects the following adjustments from total compensation reported in the Summary Compensation Table:
| | | | | | | | | | First PEO | Average of Non-PEO's | | Total compensation reported in the Summary Compensation Table | 943,524 | 1,215,022 | | Deduct the equity compensation reported in the Summary Compensation Table in column (Stock Awards) and column (Option Awards), | — | (485,111) | | Add year end fair value all awards granted during 2021 that are outstanding and unvested as of the end of the fiscal year; | — | 353,522 | | Add change in fair value (from prior year-end) of prior year equity awards that are unvested and outstanding | (2,691,551) | (1,331,837) | | Add for awards that were granted and vested in 2021, the fair value as of the vesting date | — | — | | Add the change in fair value (from prior year-end to vesting date) of prior year equity awards that vested in 2021 | (785,661) | (385,451) | | Subtract for any awards granted in any prior fiscal year that fail to meet the applicable vesting conditions during 2021, the amount equal to the fair value at the end of the prior fiscal year | — | (1,260,109) | | Compensation Actually Paid for Fiscal Year 2021 | (2,533,688) | (1,893,964) |
Analysis of the Company, regardlessInformation Presented in the Pay Versus Performance Table
We generally seek to incentivize long-term performance, and therefore do not specifically align our performance goals with “compensation actually paid” (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the reason,relationships between information presented in the Pay Versus Performance table. Since our second PEO was not employed during 2021, he or she would be entitledis not included in either of the below comparisons.
Compensation Actually Paid and Net Loss
As a clinical-stage company primarily focused on research and development of novel therapies to paymenttreat series mental health conditions, our company has not historically utilized net income (loss) as a performance measure for any accrued but untaken holiday equalour executive compensation program. From 2021 to 1/260th of his or her salary for each day. If either party has served notice2022, our net loss increased and the compensation actually paid to terminate, the Company may require theour first PEO and named executive to take any accrued but unused holiday entitlement during the notice period. Any accrued but unused holiday entitlement shall be deemed to be taken during any period of garden leave. (5) In the event the executive’s employment is terminated by the Company or by the employee in response toofficers as a fundamental breach of contract by the Company within 12 months following a change in control, (a) Mr. Goldsmith is entitled to 18 months salary, his pro rated bonus and an amount equivalent to the cost to the Company of providing Mr. Goldsmith with 18 months of employment benefits, (b) Dr. Goodwin is entitled to 12 months’ salary, his pro rated bonus and an amount equivalent to the cost to the Company of providing Mr. Goldsmith with 12 months of employment benefits, and (c) Dr. Malievskaia is entitled to 12 months’ salary, her pro rata bonus, and (c) an amount equivalent to the cost to the Company of providing Dr. Malievskaia with her other employment benefits for 12 months.group (excluding our PEOs) also increased between those years.
Each
Compensation Actually Paid and TSR
As shown in the following graph, the compensation actually paid to our first PEO and the average amount of Mr. Poulsen and Mr. Morgan were no longer servingcompensation actually paid to our named executive officers as a group (excluding our First PEO) during the periods presented are negatively correlated. As discussed above in "Executive Compensation - Primary Elements of Compensation Program" we use a combination of short-term cash incentive compensation opportunities for our named executive officerofficers, in the form of annual cash bonuses to incentivize and award delivery of the Company atCompany’s strategy and corporate objectives, and long-term equity incentive compensation consisting of share options, which provide value only if the endmarket price of fiscal year 2021. Additionally, since Mr. Poulsen did not breach anyour shares increases and if the executive officer continues in our employment over the vesting period, and restricted share units, which provide value only if the executive officer continues in our employment over the vesting period. These equity awards strongly align our executive officers’ interests with those of hisour shareholders by providing a continuing obligations through his termination date, he received $892,500 (an amount equalfinancial incentive to nine monthsmaximize long-term value for our shareholders and by encouraging our executive officers to continue in our employment for the long-term.
Mr. Morgan did not receive any termination related payments in connection with his voluntary termination of employment with the Company.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS Equity Compensation Plans Table The following table sets forth information as of December 31, 20212022 regarding ordinary shares that may be issued under our equity compensation plans: | | | | | | | | | | | | | Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (#) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights ($) (1) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column) (3) | Equity Compensation Plans Approved by Security Holders (2) | 3,195,503 (4) | 13.53 | 1,260,865 | | Equity Compensation Plans not Approved by Security Holders | — | — | — | | Total | 3,915,503 | 13.53 | 1,260,865 |
| | | | | | | | | | | | | Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (#) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights ($) (1) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column) (3)(4) | Equity Compensation Plans Approved by Security Holders (2) | 4,492,732 | $12.08 | 1,390,436 | Equity Compensation Plans not Approved by Security Holders(5) | 600,000 | $1.78 | — | | Total | 5,092,732 | $13.85 | 1,390,436 |
(1) The weighted average exercise price is calculated based solely on outstanding share options. (2) Includes the following plans: our 2020 Plan, our 2017 Plan and our Employee Stock Purchase Plan (“ESPP”). (3) The Company initially reserved 2,074,325 of its ordinary shares for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by up to 4% of the outstanding number of ordinary shares on the immediately preceding December 31, or such lesser number of shares as determined by our Compensation and Leadership Development Committee. This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. The total number of ordinary shares that may be issued under the 2020 Plan was 2,074,3253,755,120 shares as of December 31, 2021,2022, of which 406,737 667,802shares remained available for future grant. As of December 31, 2021, the Company was authorized under the shareholder agreements to issue a total of 13,601,246 ordinary shares, including shares underlying options granted pursuant to the 2017 Plan. Forfeitures are accounted for as they occur. As of December 31, 2021, there were 514,075 shares available for issuance as incentives to the Company’s employees and directors, which includes shares underlying options that may be granted from time to time subsequent to December 31, 2021 under the terms of the 2017 Plan.
The ESPP initially reserves and authorizes the issuance of up to a total of 340,053 ordinary shares to participating employees. The ESPP provides that the number of shares reserved and
available for issuance will automatically increase each January 1, beginning on January 1, 2022 and each January 1 thereafter through January 1, 2022, by the lesser of (i) 1% of the outstanding number of ordinary shares on the immediately preceding December 31 or (ii) 510,058 ordinary shares. The number of shares reserved under the ESPP is subject to change in the event of a share split, share dividend or other change in our capitalization. On October 1, 2021, the Company launched the Share Incentive Plan and the ESPP, through which employees can purchase shares at a discounted price. At the end of each six months,month purchase period, shares will automatically be purchased at the lower of the opening and closing price of the shares for the savingpurchase period minus a 15% discount.
(4) Amount does not include any purchase rights accruing under the ESPP during the current purchase period, which commenced on OctoberNovember 1, 2021,2022, because the purchase right (and therefore the number of shares to be purchased) will not be determined until the end of the purchase period on March 31, 2022.April 30, 2023.
(5) On August 1, 2022, we granted a non-qualified share option to purchase an aggregate of 600,000 shares to Mr. Nath in connection with his appointment as Chief Executive Officer. In accordance with Nasdaq Listing Rule 5635(c)(4), the non-qualified share option award was approved by Compensation and Leadership Development Committee and made as a material inducement to Mr. Nath’s entry into employment as our new Chief Executive Officer. The non-qualified share option has a 10-year term and vests as to one-fourth on August 1, 2023 (the first anniversary of his employment commencement date) and as to the remaining three-fourths in equal monthly installments over the following 36 months, subject to Mr. Nath remaining an employee on the applicable vesting dates. The non-qualified share option has other terms that mirror those of non-qualified share options granted under our 2020 Plan and the standard form of non-qualified share option agreement.
AUDIT AND RISK COMMITTEE REPORT The Audit and Risk Committee oversees the accounting and financial reporting processes of COMPASS Pathways plc (the “Company”) and the audits of the Company’s financial statements, evaluates auditor performance, manages relations with the Company’s independent registered public accounting firm and evaluates policies and procedures relating to internal control systems. The Audit and Risk Committee operates under a written Audit and Risk Committee charter that has been adopted by the Board of Directors of the Company (the “Board”). All members of the Audit and Risk Committee currently meet the independence and qualification standards for audit committee membership set forth in the listing standards provided by Nasdaq and the U.S. Securities and Exchange Commission (“SEC”), and the Board has determined that Annalisa Jenkins and Linda McGoldrick are “audit committee financial experts,” as the SEC has defined that term in Item 407 of Regulation S-K. The Audit and Risk Committee members are not professional accountants or auditors. The members’ functions are not intended to duplicate or to certify the activities of management and the independent registered public accounting firm. The Audit and Risk Committee serves a board-level oversight role in which it provides advice, counsel and direction to management and the auditors on the basis of the information it receives, discussions with management and the auditors, and the experience of the Audit and Risk Committee’s members in business, financial and accounting matters. The Audit and Risk Committee oversees the Company’s financial reporting process on behalf of the Board. The Company’s management has the primary responsibility for the financial statements and reporting process, including the Company’s system of internal controls. In fulfilling its oversight responsibilities, the Audit and Risk Committee reviewed with management the audited financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021.2022. This review included a discussion of the quality and the acceptability of the Company’s financial reporting, including the nature and extent of disclosures in the financial statements and the accompanying notes. The Audit and Risk Committee also reviewed the progress and results of the testing of the design and effectiveness of its internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002. The Audit and Risk Committee also reviewed with PricewaterhouseCoopers LLP (“PwC”), our independent registered public accounting firm, which is responsible for expressing an opinion on the conformity of the audited financial statements with accounting principles generally accepted in the United States of America, their judgments as to the quality and the acceptability of the Company’s financial reporting and such other matters as are required to be discussed with the Committee by Public Company Accounting Oversight Board (“PCAOB”) AU 380, Communications with Audit Committees, and SEC Regulation S-X Rule 207, Communication with Audit Committees. The Audit and Risk Committee has received the written disclosures and the letter from PwC required by the applicable requirements of the PCAOB regarding PwC’s communications with the audit committee concerning independence. The Audit and Risk Committee has discussed with PwC its independence from management and the Company. In addition to the matters specified above, the Audit and Risk Committee discussed with PwC the overall scope, plans and estimated costs of their audit. The Audit and Risk Committee met with PwC periodically, with and without management present, to discuss the results of PwC’s examinations, the overall quality of the Company’s financial reporting and PwC’s reviews of the quarterly financial statements, and drafts of the quarterly and annual reports. Based on the reviews and discussions referred to above, and subject to the limitations of the Audit and Risk Committee’s role and responsibilities referred to above and in the Audit and Risk Committee charter, Audit and Risk Committee recommended to the Board that the Company’s audited financial statements should be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 20212022 for filing with the SEC.
| | | | | The Audit and Risk Committee of the Board | | Linda McGoldrick, Chair Annalisa Jenkins Robert McQuade |
The information contained in this Audit and Risk Committee report shall not be deemed to be “soliciting material,” “filed” with the SEC, subject to Regulations 14A or 14C of the Exchange Act, or subject to the liabilities of Section 18 of the Exchange Act. No portion of this audit and risk committee report shall be deemed to be incorporated by reference into any filing under the Securities Act, or the Exchange Act, through any general statement incorporating by reference in its entirety the proxy statement in which this report appears, except to the extent that we specifically incorporate this report or a portion of it by reference. In addition, this Audit and Risk Committee report shall not be deemed filed under either the Securities Act or the Exchange Act.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table and related footnotes set forth information with respect to the beneficial ownership of our ordinary shares, as of April 19, 2022,4, 2023, by: •each beneficial owner of more than 5% of our ordinary shares; •each of our named executive officers and directors; and •all of our current executive officers and directors as a group. Beneficial ownership is determined in accordance with the rules and regulations of the SEC. Under these rules, beneficial ownership includes any shares as to which a person has sole or shared voting power or investment power. In computing the number of ordinary shares beneficially owned by a person and the percentage ownership of that person, ordinary shares subject to options, or other rights held by such person that are currently exercisable or will become exercisable within 60 days of April 19, 20224, 2023 are considered outstanding. These ordinary shares, however, are not included in the computation of the percentage ownership of any other person. Applicable percentage ownership is based on 42,511,35745,343687 ordinary shares outstanding as of April 19, 2022.4, 2023. Unless otherwise indicated, addresses of the directors, executive officers and named beneficial owners are in care of COMPASS Pathways plc, 3rd Floor, 1 Ashley Road, Altrincham, Cheshire WA14 2DT, United Kingdom.
| | | | | | | | | | | | | | | | | Ordinary Shares Beneficially Owned | | Name of Beneficial Owner | | Number | | Percent | | Greater than 5% Shareholders | | | | | ATAI Life Sciences AG(1) | | 9,435,758 | | 19.74% | George Goldsmith(2) | | 4,345,249 | | 10.20% | Ekaterina Malievskaia(3) | | 4,324,653 | | 10.16% | | Named Executive Officers and Directors | | | | | George Goldsmith(2) | | 4,345,249 | | 10.20% | Piers Morgan(4) | | 206,382 | | * | Nate Poulsen(5) | | 12,570 | | * | Guy Goodwin(6) | | 3,750 | | * | Ekaterina Malievskaia(3) | | 4,324,653 | | 10.16% | | Jason Camm | | — | | * | Annalisa Jenkins(7) | | 118,720 | | * | Thomas Lönngren(8) | | 124,584 | | * | David Norton(9) | | 133,650 | | * | Linda McGoldrick(10) | | 9,443 | | * | Robert McQuade(11) | | 1,602,771 | | 3.77% | Wayne Riley(12) | | 7,000 | | * | All Current Executive Officers and Directors as a Group (12 persons)(13) | | 10,669,820 | | 24.85% |
| | | | | | | | | | | | | | | | | Ordinary Shares Beneficially Owned | | Name of Beneficial Owner | | Number | | Percent | | Greater than 5% Shareholders | | | | | ATAI Life Sciences AG(1) | | 9,435,758 | | 20.81% | George Goldsmith(2) | | 4,419,691 | | 9.72% | Ekaterina Malievskaia(3) | | 4,371,525 | | 9.62% | | Named Executive Officers and Directors | | | | | George Goldsmith(2) | | 4,419,691 | | 9.72% | Kabir Nath(4) | | 12,825 | | * | Michael Falvey(5) | | 56,875 | | * | Guy Goodwin(6) | | 3,750 | | * | Ekaterina Malievskaia(3) | | 4,371,525 | | 9.62% | Matthew Owens(7) | | 40,063 | | * | Annalisa Jenkins(8) | | 138,217 | | * | Thomas Lönngren(9) | | 151,970 | | * | David Norton(10) | | 153,147 | | * | Linda McGoldrick(11) | | 26,389 | | * | Robert McQuade(12) | | 1,620,167 | | 3.57% | Wayne Riley(13) | | 13,000 | | * | All Current Executive Officers and Directors as a Group (12 persons)(14) | | 11,072,004 | | 23.99% |
* Represents beneficial ownership of less than one percent.
(1) Based solely on a Schedule 13G/13D/A filed with the SEC by ATAI Life Sciences AG (“ATAI AG”) and ATAI Life Sciences N.V. (“ATAI N.V.”) on December 1, 2021. Consists of 9,435,758 ordinary shares owned by ATAI AG, a wholly-owned subsidiary of ATAI N.V. ATAI Life Sciences N.V. and ATAI Life Sciences AG both hold shared voting and dispositive power over 9,435,758 shares. ATAI Life Sciences AG is a German public limited company. Its address is Barer Straße 7, 80333 München, Germany. (2) Represents (i) 4,278,3394,280,702 ordinary shares, (ii) 2,7942,795 ordinary shares issuable upon the settlementvesting of RSUs releasable within 60 days of April 19, 20224, 2023 and (ii) 64,116136,194 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 4, 2023. Mr. Goldsmith and Dr. Malievskaia are married
but they expressly disclaim beneficial ownership of each other’s shares in the Company. Pursuant to the terms of call option agreements dated May 19, 2022.2020, as amended and restated on July 21, 2020, as further amended and restated on September 9, 2020, and as further amended effective February 15, 2023, Lars Christian Wilde, a former co-founder of the Company, has an option to purchase 776,565 of our ordinary shares for an exercise price of less than £0.01 per share from each of Mr. Goldsmith and Dr. Malievskaia, exercisable at any time following our initial public offering until September 9, 2033. (3) Represents (i) 4,278,512 ordinary shares, (ii) 2,795 ordinary shares issuable upon vesting of RSUs within 60 days of April 4, 2023 and (iii) 90,218 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 4, 2023. Mr. Goldsmith and Dr. Malievskaia are married but they expressly disclaim beneficial ownership of each other’s shares in the Company.
(3) Represents (i) 4,278,335call option agreements dated May 19, 2020, as amended and restated on July 21, 2020, as further amended and restated on September 9, 2020, and as further amended effective February 15, 2023, Lars Christian Wilde, a former co-founder of the Company, has an option to purchase 776,565 of our ordinary shares (ii) 2,794 ordinary shares issuable upon the settlementfor an exercise price of RSUs releasable within 60 daysless than £0.01 per share from each of April 19, 2022Mr. Goldsmith and (iii) 43,524Dr. Malievskaia, exercisable at any time following our initial public offering until September 9, 2033.
(4) Represents 12,825 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022. Mr. Goldsmith and Dr. Malievskaia are married but they expressly disclaim beneficial ownership of each other’s shares in the Company.4, 2023. (4)
(5) Represents (i) 150,382 ordinary shares and (ii) 56,00056,875 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022.4, 2023. (5) Represents 12,570 ordinary shares.
(6) Represents 3,750(i) 2,062 ordinary shares and (ii) 66,073 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022.4, 2023.
(7) Represents (i) 8,9031,407 ordinary shares and (ii) 38,656 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 4, 2023.
(8) Represents (i) 9,970 ordinary shares, (ii) 1,484 ordinary shares issuable upon vesting of RSUs within 60 days of April 4, 2023 and (iii) 126,763 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 4, 2023. (9) Represents (i) 89,049 ordinary shares and (ii) 62,921 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 4, 2023. (10) Represents (i) 9,970 ordinary shares, (ii) 1,484 ordinary shares issuable upon the settlement of RSUs releasable within 60 days of April 19, 20224, 2023 and (iii) 108,333141,693 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022.4, 2023. (8)
(11) Represents (i) 84,049 ordinary shares and (ii) 40,53526,389 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022.4, 2023. (9)(12) Represents (i) 8,9031,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC and (ii) 1,484 ordinary shares issuable upon the settlement of RSUs releasable within 60 days of April 19, 2022 and (iii) 123,26325,490 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022.
(10) Represents 9,443 ordinary shares underlying4, 2023 held by Dr. McQuade. Dr. McQuade holds the share options to purchase ordinary shares fromfor the Company exercisable within 60 days after April 19, 2022.
(11) Represents (i) 1,594,677 ordinary shares held bybenefit of the McQuade Center for Strategic Research and Development LLC and (ii) 8,094 ordinarydisclaims beneficial ownership of any shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022 held by Dr. McQuade.such share options. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares.
(12)(13) Represents 7,00013,000 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022.4, 2023.
(13)(14) Represents (i) 10,253,20610,266,349 ordinary shares, (ii) 8,5568,558 ordinary shares issuable upon the settlement of RSUs releasable within 60 days of April 19, 20224, 2023 and (iii) 408,058797,097 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 20224, 2023 held by our current officers and directors.
DELINQUENT SECTION 16(a) REPORTS
Under Section 16(a) of the Exchange Act, directors, executive officers, our principal accounting officer and beneficial owners of 10% or more of our common stock, or reporting persons, are required to report to the SEC on a timely basis the initiation of their status as a reporting person and any changes with respect to their beneficial ownership of our common stock. Based solely on our review of copies of such forms that have been filed with the SEC, or written representations from reporting persons, we believe that during the fiscal year ended December 31, 2022, all reporting persons complied with all applicable filing requirements, except with respect to (i) a Form 4 filing made on February 15, 2022 to report grants of share options and restricted share units to Mr. Owens on February 1, 2022, (ii) a Form 3 filing made on February 28, 2022 by ATAI Life Sciences N.V. to report initiation of their status as a reporting person on January 1, 2023, (iii) Form 4 filings made on March 31, 2022 to report grants of restricted share units to each of Mr. Goldsmith and Dr. Malievskaia on February 1, 2022, (iv) a Form 4 filing made on April 6, 2022 to report grants of share options to Mr. Goodwin on February 1, 2022, (v) Form 4 filings made on April 19, 2022 to report grants of share options to each of Mr. Goldsmith and Dr. Malievskaia on February 1, 2022, and (vi) Form 4 filings made on February 3, 2023 to report net withholding of shares to settle taxes upon vesting of restricted stock units held by each of Mr. Goldsmith and Dr. Malievskaia on December 20, 2022.
CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH RELATED PERSONS Other than the compensation arrangements described above under the sections “Director Compensation” and “Executive Compensation Discussion and Analysis” and the transactions described below, in the period from January 1, 2021 through the date of this Proxy Statement, we have engaged in the following transactions with our directors, executive officers or holders of more than 5% of our outstanding share capital and their affiliates, which we refer to as our related parties. AGREEMENTS WITH OUR EXECUTIVE OFFICERS AND DIRECTORS We have entered into employment agreements with our executive officers and service agreements with our non-executive directors. These agreements contain customary provisions and representations, including confidentiality, non-competition, non-solicitation and inventions assignment undertakings by the executive officers. However, the enforceability of the non-competition provisions may be limited under applicable law. FAMILY RELATIONSHIPS George Goldsmith, our Chief Executive Officer and Chairman of our Board Chair, is married to Ekaterina Malievskaia, our Chief Innovation Officer and a member of our Board. On October 5, 2020, Dr. Malievskaia’s son began work with us as Stakeholder Engagement and Operations Associate, and subsequently resigned effective April 16, 2021. As of the date of this Proxy Statement, there were no other family relationships between our executive officers and any of our directors. INSURANCE AND INDEMNIFICATION To the extent permitted by the Companies Act 2006 and in accordance with our Articles of Association, we are empowered to indemnify our directors against any liability they incur by reason of their directorship. Prior to the completion of our IPO, we obtained andWe maintain directors’ and officers’ insurance to insure such persons against certain liabilities. We enteredalso enter into a deed of indemnity with each of our directors and executive officers prior to the completion of our IPO.officers. These agreements and our Articles of Association require us to indemnify our directors and executive officers to the fullest extent permitted by law. RELATED PARTY TRANSACTION POLICY We have adopted a related party transaction policy. This policy became effective on September 17, 2020, the date on which our registration statement on Form F-1 in connection with our IPO was declared effective by the SEC. Pursuant to this policy, the Audit and Risk Committee has the primary responsibility for reviewing and approving or disapproving “related party transactions,” which are transactions between us and related parties in which the related party has a direct or indirect material interest. For purposes of this policy, a related party is defined as a director, executive director, nominee for director, or greater than 5% beneficial owner of any class of our voting securities, and their immediate family members.
DELIVERY OF PROXY MATERIALS Our 2022 Annual Report, on Form 10-K, including audited financial statements, accompanies this Proxy Statement. Copies of our Annual Report on Form 10-K and the exhibits thereto are available from the Company without charge upon written request of a shareholder. Copies of these materials are also available online through the SEC at www.sec.gov. The Company may satisfy SEC rules regarding delivery of proxy materials, including this Proxy Statement and our 2022 Annual Report, by delivering a single set of proxy materials to an address shared by two or more Company shareholders or ADS holders. This delivery method can result in meaningful cost savings for the Company. In order to take advantage of this opportunity, the Company may deliver only a single set of proxy materials to multiple shareholders or ADS holders who share an address, unless contrary instructions are received prior to the mailing date. Similarly, if you share an address with another shareholder or ADS holder and have received multiple copies of our proxy materials, you may write or call us at the address and phone number below to request delivery of a single copy of the proxy materials in the future. We undertake to deliver promptly upon written or oral request a separate copy of the proxy materials, as requested, to a shareholder or ADS holders at a shared address to which a single copy of the proxy materials was delivered. If you are an ordinary shareholder of record and prefer to receive separate copies of proxy materials either now or in the future, please contact Ben Harber, Company Secretary, COMPASS Pathways plc, 3rd Floor, 1 Ashley Road, Altrincham, Cheshire, WA14 2DT, United Kingdom or by telephone at +1 (646) 905-3974. If you hold ADSs and you prefer to receive separate copies of proxy materials either now or in the future, please contact the Depositary, your brokerage firm or bank, as applicable. EACH ORDINARY SHAREHOLDER IS URGED TO COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY FORM. EACH ADS HOLDER IS URGED TO COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ADS PROXY CARD TO CITIBANK, N.A., THE DEPOSITARY FOR THE ADSs.
ADDITIONAL INFORMATION U.K. STATUTORY ANNUAL ACCOUNT AND REPORTS OF THE BOARD OF DIRECTORS AND AUDITORS OF COMPASS PATHWAYS PLC FOR THE YEAR ENDED DECEMBER 31, 20212022 Consistent with its obligations under the U.K. Companies Act 2006, our Board will present at the AGM our U.K. statutory annual accounts and reports for the year ended December 31, 2021,2022, which have been approved by and, where appropriate, signed on behalf of our Board and will be delivered to the Registrar of Companies in the United Kingdom following the AGM. A copy of our U.K. statutory directors’ remuneration report, including the annual report on remuneration, is included as Annex A to this Proxy Statement. A complete copy of our U.K. statutory annual accounts and reports, including the statutory Board of Directors report, strategic report, and auditor’s report on our U.K. accounts will be sent separately to you no less than 21 days prior to the AGM. You will be provided an opportunity to raise questions in relation to such accounts and reports at the AGM. Full accounts and reports will be available for inspection prior to and during the AGM. SHAREHOLDERS' RIGHT TO CALL A GENERAL MEETING Our shareholders have the right to call a meeting of our shareholders. The U.K. Companies Act 2006 generally requires the directors to call a general meeting once we have received requests to do so from shareholders representing at least 5% of our paid-up shares entitled to vote at a general meeting. The U.K. Companies Act 2006 generally prohibits shareholders of a U.K. public limited company from passing written resolutions. However, significant shareholders would, in any case, still have the power to call a general meeting and propose resolutions. These provisions are mandatory under the U.K. Companies Act 2006 and cannot be waived by our shareholders. SHAREHOLDER PROPOSALS Pursuant to Rule 14a-8 under the Exchange Act, in order to be considered for inclusion in our proxy statement for our 20232024 annual general meeting of shareholders, shareholder proposals must be received by the Company at the Office of the Company Secretary, 3rd Floor, 1 Ashley Road, Altrincham, Cheshire, WA14 2DT, United Kingdom no later than 120 days before the anniversary of the date on which we sent our proxy materials for the AGM, or January 11,December 30, 2023. However, if the date of such annual general meeting is more than 30 calendar days from the date of the anniversary of the AGM, then the notice must be received by our Company Secretary a reasonable time before we begin to print and send our proxy materials. To comply with the universal proxy rules, (once effective), shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice at our principal executive offices that sets forth the information required by Rule 14a-19 under the Exchange Act no later than April 17, 2023.3, 2024. We also encourage anyone sending in a shareholder proposal to additionally send such proposals via email AGM@compasspathways.com. Under Section 338 of the U.K. Companies Act 2006, shareholders representing at least 5% of holders entitled to vote on a resolution at an annual general meeting may require the Company to include such resolution in its notice of an annual general meeting. Provided the applicable thresholds are met, notice of the resolution must be received by the Company at the Office of the Company Secretary, 3rd Floor, 1 Ashley Road, Altrincham, Cheshire, WA14 2DT, United Kingdom at least six weeks prior to the date of the annual general meeting, or, if later, at the time notice of the annual general meeting is delivered to shareholders. QUESTIONS? If you have any questions or need more information about the AGM please write to us at: Ben Harber Company Secretary COMPASS Pathways plc 3rd Floor 1 Ashley Road Altrincham Cheshire WA14 2DT United Kingdom
Annex A DIRECTORS’ REMUNERATION REPORT
This part of the Remuneration Report sets out the remuneration policy for the Company. The current Directors’ Remuneration Policy (the “Policy”“Policy”) was approved by shareholders in a binding vote at the AGM held on 22 June 2021. It took effect from the date of approval and applies for a period of three years until 2024. At the 2022 annual general meeting of shareholders, 88.1% of shareholders voted in favour of the proposal to receive and approve, as a non-binding advisory resolution, the U.K. statutory Directors’ Remuneration Report for the year ended 31 December 2021, with 0.1% voted against and 11.8% withheld from such proposal. Key considerations when determining the Policy The Policy was designed by the Committee with a number of specific principles in mind: •attract, retain and motivate high calibre Senior Management and focus them on the delivery of the Company’s strategic and business objectives; •encourage a corporate culture that promotes the highest level of integrity, teamwork and ethical standards; •be competitive against appropriate market benchmarks (being predominantly the US biotech sector) and have a strong link to performance, providing the ability to earn above-market rewards for strong performance; •be simple and understandable, both internally and externally; •encourage increased equity ownership to motivate executives in the overall interests of shareholders, the Company, employees and customers; and •take due account of good governance and promote the long-term success of the Company. In seeking to achieve the above objectives, the Committee is mindful of the views of a broad range of stakeholders in the business and accordingly takes account of a number of factors when setting remuneration including: market conditions; pay and benefits in relevant comparator organizations;organisations; terms and conditions of employment across the Company; the Company’s risk appetite; the expectations of institutional shareholders; and any specific feedback received from shareholders and other stakeholders. During 2020, associated with the Company’s IPO, the Committee determined that it was appropriate to benchmark the salary, bonus and option levels of Senior Management and make necessary adjustments to ensure these remain competitive with UK and US benchmarks. In 2021, the Committee reviewed the peer groups used to benchmark remuneration for Senior Management.
In 2022, the Committee reviewed and updated the peer group used to benchmark remuneration for Senior Management. The directorsDirectors identify any conflicts of interest at the beginning of each boardBoard meeting and the beginning of each Committee meeting. Currently theMr. Goldsmith who served as Chairman and Chief Executive Mr Goldsmith, is alsountil August 2022 and continues to serve as Chairman of the Board, and is married to the Chief Innovation Officer and Executive Director, Dr Malievskaia. The Senior Independent Director, Mr Norton and the Chair of the Compensation and Leadership Development Committee, Dr Jenkins, have assumed the governance role for all matters pertaining to the compensation of Mr Goldsmith and Dr Malievskaia. No conflicts of interest relevant to remuneration have been identified to date. The Policy for Executive Directors CurrentlyDuring 2022 the Company has only twohad three Executive Directors, but the Policy will apply equally to any additional Executive Directors who may be appointed in the future. The Committee annually reviews the operation of the remuneration packages to ensure they are operating within an acceptable risk profile and that they do not inadvertently encourage any economic, social or governance issues.
The total remuneration for the Executive Directors is made up of the following elements: •salary; •benefits; •annual bonus; •long-term incentive awards; and •pension.Pension/401k contribution. Long term incentive awards: The Company adopted the 2020 Share Option Plan, or the 2020 plan and Employee Share Purchase Plan, orthe ESPP, on completion of its Nasdaq IPO in September 2020. On 1 October 2021, the Company launched the Share Incentive Plan (the “SIP”) and the ESPP. The companySince the completion of the Nasdaq IPO, the Company has only issued equity under these two plans since completionand has issued an inducement grant, on such terms as are defined under applicable NASDAQ listing rules, in connection with hiring of its Nasdaq IPO.Mr. Nath as our Chief Executive Officer in 2022. In the period 1 January 2020 to 18 September 2020, the Company granted options under the 2017 Plan.
| | | | | | | Purpose and link to strategy | | Salary | Provides market competitive fixed remuneration that reflects the responsibilities of the role undertaken, the experience of the individual and performance in the role over
time. | | Benefits | Provides market competitive, yet cost-effective employment benefits. | | Annual bonus | To incentivizeincentivise and award delivery of the Company's strategy and corporate objectives
on an annual basis. | | Equity Incentives | To align the interests of Executive Directors and management with long-term shareholder interests and to attract, incentivizeincentivise and retain staff. To incentivizeincentivise and recognizerecognise achievement of longer term corporate objectives and sustained
shareholder value creation. To effectively manage the Group's cash resources. | | Pension | To provide a competitive and tax-efficient pension savings plan which complies with
at least the minimum contributions requirements of the applicable jurisdiction. |
| | | | | | | Operation | | Salary | Reviewed annually taking into account individual responsibilities, experience, performance, inflation and market rates. The Committee will also consider the pay and employment conditions in the wider workforce when determining Executive Directors’ salaries. Where there has been a change in role, or the individual is new to the role, increases could be higher. Salary increases are normally effective from 1 January each year. Salaries are periodically benchmarked against a relevant peer group of biotech companies, most of which are listed on Nasdaq, with others listed on European stock exchanges, with a similar stage of clinical development, and similar
market capitalizationcapitalisation or net assets. | | Benefits | For Executive Directors this includes private medical insurance and life insurance. Other employment benefits may be provided from time to time on similar terms as those of other employees. If an Executive Director is based outside the UK additional benefits and assistance with relocation may be provided which reflect local market norms or legislation. Any reasonable business-related expenses can be reimbursed, including tax there-on. | | Annual bonus | Annual bonus performance targets are set at the start of the year by the Board and performance against objectives is assessed by the Compensation and Leadership Development Committee after the end of the relevant financial year. Bonuses are paid in cash after the award has been approved by the Committee.Committee and, as applicable for the Chief Executive Officer, the Board. | | Equity Incentives | ConditionalLong-term equity incentive awards are granted annually under the 2020 Plan. The awards have time-based vesting conditions and vest over a period of at least three years and may include a mix of share options, restricted share units, performance shares and other awards available for issuance under the 2020 Plan. Awards vest in accordance with the vesting schedule set for the relevant award in its equity agreement.
Under
Executive Directors are eligible to participate in the SIP and ESPP under the same conditions as other employees. The SIP and ESPP generally allow employees to save a portion (up to a specified maximum) of their salary over a six-month savings period and at the end of six months,the savings period, shares will automatically be purchased at the lower of the opening and closing price of the shares for the saving period minus a 15% discount.
The Committee maintains discretion over the types and terms of equity awards granted.
| PensionPension/401(k) | Executive Directors are eligible to join a defined contribution pension scheme. Only base salary is pensionable. Current Executive DirectorsDr Malievskaia and Mr Goldsmith have opted out of pension arrangements.arrangements while Mr Nath receives company 401k contributions. |
| | | | | | | Maximum potential value | | Salary | The current base salary of the Executive Directors is set out in the application of policy section of the Remuneration Report. Whilst there is no prescribed formulaic maximum, any increases will take into account prevailing market and economic conditions and the approach to employee pay throughout the organisation. Base salary increases are awarded at the discretion of the Committee; however, salary increases will normally be no greater than the general increase awarded to the wider workforce, in percentage of salary terms. However, a higher increase may be made where an individual had been appointed to a new role at below-market salary while gaining experience. Subsequent demonstration of strong performance may result in a salary increase which is higher than that awarded to the wider workforce. | | Benefits | The value of each benefit is not predetermined and is typically based upon the cost to the Company of providing said benefit which will vary from year to year based on the cost from third-party providers. | | Annual bonus | The maximum payable to an Executive Director is 125% of the target bonus level for each Executive Director. The target bonus level for the Chief Executive Officer is 60% of base salary (55% in 2021) and Chief Innovation Officer is 55%45% (45% in 2021) of base salary and planned to increase to 60% of base salary in 2022.salary. | | Equity Incentives | The Company initially reserved 2,074,325 of its ordinary shares for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each 1 January, beginning on 1 January 2022, by up to 4% of the outstanding number of ordinary shares on the immediately preceding 31 December, or such lesser number of shares as determined by our Compensation and Leadership Development Committee. This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. capitalisation.
The total number of ordinary shares that may be issued under the 2020 Plan was 2,074,3253,755,120 shares as of 31 December 2021,2022, of which 406,737667,802 shares remained available for future grant.
During the years ended 31 December 31,2022 and 2021, and 2020, the Company granted options to purchase 1,043,7022,120,783 and 3,405,4901,043,702 ordinary shares under the 2020 Plan to employees and non-employees, respectively.
During the year ended 31 December 2022, the Company granted options to purchase 600,000 shares to the Company’s new Chief Executive Officer as an inducement grant, as such term is defined under applicable NASDAQ listing rules. | PensionPension/401(k) | TheFor the pension, the maximum contribution, cash supplement (or combination thereof) payable by the Company is 3% of salary, which is at the same level as the general workforce. For the 401(k) defined contribution plan available to employees, including Executive Directors, in the United States, the Company match is equal to 100% of the amount an employee contributes to the 401(k) plan for each payroll period up to a maximum of 4% of cash compensation earned by such employee. |
| | | | | | | Performance metrics | | Salary | The overall performance of the individual and Company, including against individual performance objectives, is a key determinant for salary increases. | | Benefits | None. | | Annual bonus | ResearchOperational targets related to research and development, business development, financial goals and commercial targetsgoals are discussed with the Compensation and Leadership Development Committee and set at the start of the year by the Board. Details of the performance measures for the current year are provided in the Remuneration Report, subject to any nondisclosure on the basis of commercially-sensitive information. The payment of any bonus is at the absolute discretion of the Committee which has the discretion to override out-turn of the bonus if appropriate to do so, including but not limited to factors such as the underlying financial and operational performance of the Company and individual performance. | | Equity Incentives | Vesting may be on a time-phased basis or subject to performance conditions, as determined at the discretion of the Committee. During the years ended 31 December 2022 and 2021, the Company granted equity awards with time-phased vesting. | PensionPension/401(k) | None. |
The Committee operates the annual bonus and 2020 Plan, in accordance with their rules, and where relevant, the rules and regulations of the U.S. Securities and Exchange Commission and U.S. federal securities laws.NASDAQ listing rules. To maintain an efficient administrative process, the Committee retains the following discretion relating to remuneration: a.the eligibility to participate in the plans; b.the timing of grant of awards and any payments; c.the size of awards and payments (subject to the maximum limits set out in the Policy table above and the respective plan rules); d.the determination of whether any performance conditions have been met; and e.the annual review of performance objectives for the annual bonus plan. In certain exceptional circumstances, such as a material acquisition/divestment of a Group business or a change in the broader business environment, which mean the original performance conditions are no longer appropriate, the Committee may adjust the objectives, alter weightings or set different measures as necessary, to ensure the conditions achieve their original purpose and are not materially less difficult to satisfy. The Directors' service contracts and letters of appointment are kept for inspection at the Company's registered office.Non-Executive Directors are subject to fixed term contracts The Company has a classified Board with each Director serving a three-year term; each Director must seek re-election at the annual general meeting of one, twoshareholders at the end of his or three years. Executive Directors have contracts of indefinite duration.her three-year term.
Historical equity incentive awards Awards which were granted prior to 18 September 18, 2020 are disclosed separately in this Remuneration Report in the Long Term Incentive AwardsStatement of Directors’ Shareholding and Share Interests section. These awards remain eligible to vest, based on their original terms which are described separately in the Directors' Report on Remuneration.Remuneration Report. Annual bonus
The annual bonus is designed to drive the achievement of the Company’s strategic and corporate objectives. These targets are agreed by the Board and selected because of their importance in value creation for shareholders. Objectives are weighted for Executive Directors in proportion to the degree of importance of that objective for the Company. The weightings are agreed by the Committee. Remuneration on recruitment The remuneration package for any new Executive Director will be determined by the Committee in accordance with the terms of the Policy at the time of appointment (including salary, benefits, annual bonus, long-term incentive awards and pension). It is recognised that in order to attract and recruit talented individuals the Policy needs to allow sufficient flexibility with respect to remuneration on recruitment. The following policies apply to the remuneration on recruitment of new Executive Directors: Salary: Base salary will be determined based on the responsibilities of the role, experience of the individual and current market rates. It may be considered necessary to appoint a new Executive Director on or below market rates (e.g. to reflect limited boardBoard experience). In such circumstances, phased increases above those of the wider workforce may be required over an appropriate time period, to bring the salary to the desired market level, subject to the continued development in the role. Annual bonus: The ongoing annual bonus maximum will be in line with that outlined in the policy table for existing Executive Directors, pro-rated to reflect the period of service. Depending on the timing or nature of an appointment it may be necessary to set different initial performance measures and targets for the first year of appointment. Long-term incentive awards: 2020 Plan awards are granted in line with the policy outlined for existing Executive Directors. An award may be made shortly following an appointment. For internal appointments, existing awards will continue on their original terms.
Benefits:Benefits: Benefits provided should be in line with those of existing Executive Directors. For external and internal appointments, where required to meet business needs, reasonable relocation support will be provided. In addition, if it becomes necessary to appoint a new Executive Director from outside the UK, additional benefits may be provided to reflect local market norms or legislation.
Pension:Pension/401k: A company contribution or cash supplement up to the maximum as outlined for existing Executive Directors. Current Executive DirectorsOur Chair and Chief Innovation Officer have opted out of pension arrangements.arrangements while our current Chief Executive Officer receives a company contribution to his 401(k). Any new executives will be offered a pension or 401(k), as applicable, at the same level as the general workforce.
Sign-on payments and buy-out awards:awards: To enable the recruitment of exceptional talent, the Committee may offer additional cash and/or share-based remuneration to take account of and compensate for remuneration that the Executive Director is required to relinquish when leaving a former employer. The Committee will seek to structure any such replacement awards to be no more generous overall in terms of quantum or vesting than the award to be forfeited from the previous employer and will take into account the timing, form and performance requirements of the awards forgone. Where appropriate, any long-term incentive awards will be granted under the 2020 Plan, however, the Committee will have discretion to make use of the flexibility to make awards under any relevant exemptions in the SEC Rules.NASDAQ listing rules. For an internal Executive Director appointment, any variable pay element awarded in respect of the prior role will be allowed to pay out according to its terms. In addition, any other contractual remuneration obligations existing prior to appointment may continue. The fees for any new Chairman and non-Executive Director appointments will be set in accordance with the prevailing policy and at a level that is consistent with those of the existing Chairman and non-Executivenon- Executive Directors. Policy for payments on loss of office
The companyCompany does not have a policy of fixed term employment contracts, however, the Directors are required to retire and are entitled to put themselves forward for re-election at the AGM in accordance with their respective directorDirector class, as prescribed by the Company’s articles of association (“Articles of Association”Association”). The notice period for the existingcurrent Chief Executive Officer’s employment contract is 12 months, for90 days, provided however, that if the Chief Innovation Officer is 9 months, and three months forCompany terminates his employment contract without cause, the existing non-Executive Directors.Chief
Executive Officer is entitled to a cash severance payment equal to one year’s annual salary plus the target annual bonus amount for the year in which such termination occurs, for the Chief Innovation Officer is 9 months, and one months for the existing non- Executive Directors. The Committee’s approach to payments in the event that an Executive Director’s employment is terminated is to take account of the individual circumstances including the reason for termination, individual performance, contractual obligations, potential claims the Executive Director might have against the companyCompany and the terms of the equity incentive plans in which the Executive Director participates. Termination by notice from the Company: up to 12 months’ notice, with the discretion for the Committee to make a payment in lieu of notice for base salary, pension and other benefits that would otherwise have been paid during the notice period. Annual bonus: except for the current Chief Executive Officer who is entitled to his target annual bonus,: there is no automatic contractual entitlement to bonus or pro-rata bonus on termination, although this may be considered at the discretion of the Committee. Long-term incentives:incentives: whether any long-term incentive awards would vest and be exercisable upon loss of office would be subject to the relevant plan rules under which such award was granted. The 2020 Plan allows vesting and exercise of awards in the event of death, retirement, ill-health, injury, redundancy and any other reason at the discretion of the Committee. The Committee retains discretion to determine the extent to which the award will vest, taking into consideration the circumstances. Unvested awards normally lapse, although the Committee retains the power to determine, in accordance with the “good leaver” provisions of the relevant plan rules, what proportion of unvested awards will be retained and what proportion will lapse. In determining this, the Committee will give consideration to the reason for leaving, the extent of achievement of performance objectives at the date of leaving and may decide to pro-rate awards. Change of Control:Control: on a change of control, all unvested awards vest on the date of change of control. Change of control provisions in the Executive Directors’Chief Innovation Officer’s service agreementsagreement provide for a lump sum payment equal to the value of salary, bonus and contractual benefits for 12 months (or 18 months in the case of Mr. Goldsmith) if, within 12 months of the change of control, their employment by the Company is terminated (other than for reason of misconduct and certain other grounds, but including by way of constructive dismissal) less any sums paid by way of notice or payment in lieu of notice.
Additional payments:payments: the Committee reserves the right to make payments it considers reasonable under a settlement agreement, including payment or reimbursement of reasonable legal and professional fees, untaken holiday and any payment for the settlement of potential claims against the Company in the UK or other jurisdictions. Payment or reimbursement of reasonable outplacement fees may also be provided.
The Directors' service contracts are available for inspection at the Company's principal place of business: Fora - Soho 33 Broadwick Street Soho London W1F 0DQ
The Policy forfor the Chairman The Board approves fees payable to the Chairman. The Chairman (who also occupiesoccupied the role of Chief Executive Officer)Officer until August 2022) does not participate in discussions in respect of his own fees. The Policy for the Chief Executive Officer (CEO) The Board approves any compensation paid to the Chief Executive Officer and the Chief Executive Officer does not participate in any discussions relating to his own compensation. The Policy for Non-Executive Directors The Board approves the fees payable to the Company’s non-Executive Directors.
| | | | | | | | | | | | | Remuneration Element | Purpose and link to strategy | Operation and Maximum | Performance Related | | Chair’s fee | To attract and retain a high calibre individual with the requisite experience and knowledge. | The now Chair of the Board, Mr Goldsmith, served part of the year as Chief Executive Officer, is, as noted above, the current Chair of the Board; the Chief Executive Officer doesand did not receive any additional remuneration in respect of his duties as Chair. Executive Chair in 2022. His fee for 2023 was agreed by the Compensation Committee without his participation. Any fees payable in the future will be reviewed by the Committee on a periodic basis against those in similar sized companies to ensure they remain competitive and adequately reflect the time commitments and scope of the role. Any increase in fee levels may be above that of the wider workforce in a particular year to reflect the periodic nature of any review and/or any change in responsibilities/time commitments. The Chair may also receive limited travel and/or hospitality related benefits in connection with the role. The Chair may not receive any consultancy or other payments outside his fee.
| No | | Non-Executive Director fee | To attract and retain high calibre individuals with the requisite experience and knowledge. | The current fee levels are set out in the Non-ExecutiveNon- Executive Director cash fees section of the Remuneration Report. Fees are reviewed on a periodic basis against those in similar sized companies to ensure they remain competitive and adequately reflect the time commitments and scope of the role. A Board fee is paid to each non-Executivenon- Executive Director. Supplemental fees may be paid to the Senior Independent Director and for chairmanship and membership of Committees to recognizerecognise the additional time commitments and responsibilities of these roles. Any increase in fee levels may be above that of the wider workforce in a particular year to reflect the periodic nature of any review and/or any change in responsibilities/time commitments. If business needs arise, non-Executivenon- Executive Directors may also be engaged to provide limited consulting services outside their director responsibilities and receive fees for those services. Non-Executive Directors may also receive limited travel and/or hospitality related benefits in connection with the role. | No | | Non-Executive Director long-term incentive awards | To provide alignment with the interest of shareholders. | The Company has historically awarded share options to all employees and certain Non-Executive Directors in order to align long-term employee interests with those of shareholders, and this will be the case going forward for any new Non-Executive Directors. Notwithstanding anything to the contrary in the 2020 Plan, the value of all Awards awarded under this Plan and all other cash compensation paid by the Company to any Non-Employee Director in any calendar year for services as a Non-Employee Director shall not exceed £750,000. For the purpose of this limitation, the value of any Award shall be its grant date fair value, as determined in accordance with the Accounting Standards Codification (ACS) 718 Compensation – Stock Compensation or successor provision but excluding the impact of estimated forfeitures related to service-based vesting provisions. | No |
Statement of consideration of employees’ pay and remuneration conditions elsewhere in the Group
The Company does not formally consult with employees when drawing up the Policy. However, the Committee is made aware of employment conditions in the wider Group. The same broad principles apply to the Policy both for the Executive Directors and the wider employee population. However, the remuneration for the Executive Directors has a stronger emphasis on variable pay than for other employees. In particular, the following approach is used for the wider employee population in the Group: •Salaries, benefits and pensions are compared to appropriate market rates and set at approximately midmarketmid market level with allowance for role, responsibilities and experience. •When setting salary levels for the Executive Directors, the Committee considers the salary increases provided to other employees. •An annual bonus plan is available to all employees and is based on business and individual performance. Payments under the bonus plan are entirely discretionary.
ANNUAL REPORT ON REMUNERATION Single total figure of remuneration of each Director (audited). The Directors received the following remuneration for the years ended 31 December 31, 20202021 and 2021;2022;
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Base Salary | Bonus | Share-based payments | Other* | Total variable | Total fixed | Total | | | US $ | US $ | US $ | US $ | US $ | US $ | US $ | | George Goldsmith | 2021 | 584,658 | 321,562 | 415,538 | 37,304 | 321,562 | 1,037,500 | 1,359,062 | | 2020 | 453,936 | 234,743 | 567,911 | 34,113 | 234,743 | 1,055,960 | 1,290,703 | | Ekaterina Malievskaia | 2021 | 412,700 | 231,800 | 339,273 | 24,635 | 231,800 | 776,608 | 1,008,408 | | 2020 | 362,287 | 150,403 | 547,627 | 23,708 | 150,403 | 933,622 | 1,084,025 | | David York Norton | 2021 | 62,249 | — | 169,783 | — | — | 232,032 | 232,032 | | 2020 | 16,052 | — | 173,219 | — | — | 189,271 | 189,271 | | Florian Brand1 | 2021 | 13,119 | — | 87,609 | — | — | 100,728 | 100,728 | | 2020 | 10,944 | — | 11,119 | — | — | 22,063 | 22,063 | | Jason Camm2 | 2021 | — | — | (11,764) | — | — | (11,764) | (11,764) | | 2020 | 14,957 | — | 11,119 | — | — | 26,076 | 26,076 | | Annalisa Jenkins | 2021 | 66,032 | — | 169,835 | — | — | 235,867 | 235,867 | | 2020 | 17,511 | — | 176,835 | — | — | 194,346 | 194,346 | | Thomas Lönngren | 2021 | 49,535 | — | 205,092 | — | — | 254,627 | 254,627 | | 2020 | 13,133 | — | 248,321 | — | — | 261,454 | 261,454 | | Robert McQuade | 2021 | 60,529 | — | 166,155 | — | — | 226,684 | 226,684 | | 2020 | 16,052 | — | 11,119 | — | — | 27,171 | 27,171 | | Linda McGoldrick | 2021 | 62,077 | — | 111,116 | — | — | 173,193 | 173,193 | | 2020 | 16,417 | — | 15,609 | — | — | 32,026 | 32,026 | | Wayne Riley3 | 2021 | 38,531 | — | 96,716 | — | — | 135,247 | 135,247 | | 2020 | — | — | — | — | — | — | — | | Total | 2021 | 1,349,430 | 553,362 | 1,749,353 | 61,939 | 553,362 | 3,160,722 | 3,714,084 | | 2020 | 921,289 | 385,146 | 1,762,879 | 57,821 | 385,146 | 2,741,988 | 3,127,135 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Base Salary | Bonus | Share-based payments | Other* | Total variable remuneration | Total fixed remuneration | Total remuneration | | | US $ | US $ | US $ | US $ | US $ | US $ | US $ | | Kabir Nath | 2022 | 243,123 | 145,000 | — | — | 145,000 | 243,123 | 388,123 | | 2021 | — | — | — | — | — | — | — | | George Goldsmith (Executive Chairman) | 2022 | 179,843 | 123,642 | 37,355 | 17,994 | 123,642 | 235,192 | 358,834 | | George Goldsmith (CEO) | 2022 | 311,494 | 171,321 | 52,296 | 22,076 | 171,321 | 385,866 | 557,187 | | 2021 | 584,658 | 321,562 | 846,545 | 37,304 | 321,562 | 1,468,507 | 1,790,069 | | Ekaterina Malievskaia | 2022 | 378,563 | 163,549 | 89,651 | 25,802 | 163,549 | 494,016 | 657,565 | | 2021 | 412,700 | 231,800 | 739,056 | 24,635 | 231,800 | 1,176,391 | 1,408,191 | | David Norton | 2022 | 60,620 | — | 20,426 | — | — | 81,046 | 81,046 | | 2021 | 62,249 | — | 265,031 | — | — | 327,280 | 327,280 | | Florian Brand | 2022 | — | — | — | — | — | — | — | | 2021 | 13,119 | — | — | — | — | 13,119 | 13,119 | | Jason Camm | 2022 | — | — | — | — | — | — | — | | 2021 | — | — | — | — | — | — | — | | Annalisa Jenkins | 2022 | 59,382 | — | 47,601 | — | — | 106,983 | 106,983 | | 2021 | 66,032 | — | 302,913 | — | — | 368,945 | 368,945 | | Thomas Lonngren | 2022 | 45,692 | — | 47,601 | — | — | 93,293 | 93,293 | | 2021 | 49,535 | — | 258,663 | — | — | 308,198 | 308,198 | | Robert McQuade | 2022 | 54,434 | — | — | — | — | 54,434 | 54,434 | | 2021 | 60,529 | — | — | — | — | 60,529 | 60,529 | | Linda McGoldrick | 2022 | 56,290 | — | — | — | — | 56,290 | 56,290 | | 2021 | 62,077 | — | 81,691 | — | — | 143,768 | 143,768 | | Wayne Riley | 2022 | 46,393 | — | — | — | — | 46,393 | 46,393 | | 2021 | 38,531 | — | — | — | — | 38,531 | 38,531 | | Total | 2022 | 1,435,834 | 603,512 | 294,930 | 65,872 | 603,512 | 1,796,636 | 2,400,148 | | 2021 | 1,349,430 | 553,362 | 2,493,899 | 61,939 | 553,362 | 3,905,268 | 4,458,630 |
*Relates to health insurance, life assurance and income protection insurance i) The value of share-based payment awards to Directors is defined as the fairintrinsic value of the shares on the date of grant. For equity awards that vest based on a service condition, the share-based compensation expense is recognized on a straight-line basis over the requisite service period. This was a weighted average value of $18.43 per share in the year (2020: $10.75), meaningshares. The table reflects the total fair value of the options issuedshare-based expense recognised in 2021 was $2 million (2020: 1On May 14, 2021, Florian Brand resigned from the position of Director.
2On February 1, 2021, Jason Camm permanently waived any and all compensation which he was entitled to receive. Shares issued in 2020 were subsequently cancelled in 2021.
3Wayne Riley was appointed as Director, effective from March 31, 2021.2022.
$6 million). Note: the vesting of certain options accelerated upon completion of the IPO in accordance with the option grant terms which resulted in the recognition of a higher share-based compensation expense in 2020.
ii) No Director is currently in receipt of a pension contribution. Each Director is either not entitled to a pension payment or has opted out of receiving it. There are no payments made in lieu of pension entitlement. Illustrations of Base Case, Expected, and Maximum remuneration for the Executive Directors Scenarios (unaudited) The charts set out for illustrative purposes only, what annual remuneration the Company expects the Executive Directors to obtain as a base case, expected and maximum achievement of performance targets with respect to the year ending 31 December 2022.2023. The assumptions used in the calculations are set out below: | | | | | | | | | | 2022 | Chief Executive Officer | Chief Innovation Officer | | US $ | US $ | | Base salary | 585,108 | 413,017 | | Benefits | 37,304 | 24,635 | | FV of RSU's (granted on February 1, 2022) | 456,750 | 204,750 | | Base case | 1,079,162 | 642,402 | | Expected bonus (assumed at 100% of target) | 351,065 | 185,858 | | Expected case | 1,430,227 | 828,260 | | Maximum bonus (paid at 125% of target) | 438,831 | 232,322 | | Maximum bonus case | 1,517,993 | 874,724 | | Effect of 50% share price appreciation on share options (granted on February 1, 2022) | 1,362,375 | 590,625 | | 50% share price appreciation case | 2,880,368 | 1,465,349 |
| | | | | | | | | | | | | 2023 | Chief Executive Officer | Chairman | Chief Innovation Officer | | US $ | US $ | US $ | | Base salary | 594,500 | 96,824 | 370,352 | | Benefits | — | 40,070 | 25,802 | | Fair value of restricted share units (granted on 2 February 2023) | 273,420 | — | 126,945 | | Base case | 867,920 | 136,894 | 523,099 | | Expected bonus (assumed at 100% of target) | 356,700 | — | 166,658 | | Expected case | 1,224,620 | 136,894 | 689,757 | | Maximum bonus (paid at 125% of target) | 445,875 | — | 208,323 | | Maximum bonus case | 1,313,795 | 136,894 | 731,422 |
i)Base case: this illustration assumes fixed base case, as set out above. This illustration assumes no annual bonus; ii)Expected case: this illustration assumes the base case remuneration set out above, plus an annual bonus. We make the assumption that each Executive Director will receive the target annual bonus of 60% (2021: 55%) in the case of the Chief Executive Officer (2021: 60%) and 45% (2021: 45%) in the case of the Chief Innovation Officer of base salary, being $1,430,227$356,700 and $828,260$166,658 respectively; and
iii)Maximum bonus case: this illustration assumes the base case remuneration set out above, plus the maximum annual bonus of 125% x the target bonus percentage of base salary, being $1,517,993
$445,875 for the year in respect of the Chief Executive Officer and $874,724$208,323 for the year in respect of the Chief Innovation Officer. iv)50% share price appreciation case: this illustration assumes the base case remuneration set out above, plus the change in value of share options granted on 1 February 2022, if the share price appreciated by 50%, being $2,880,368 for the year in respect of the Chief Executive Officer and $1,465,349 for the year in respect of the Chief Innovation Officer.
The Group has used the exchange rate $0.7409:$0.8262:£1.00, the rate at 31 December 2021.
Annual performance bonus
In 20212022 the CEO, Executive Chairman (who served as CEO until 1 August 2022) and CIO’s annual bonus outcome of 100% of target for each, resulted in a total bonus pay out for the financial year ended 31 December 20212022 of 55%60% of the CEO’s base salary, 60% of the Executive Chair’s base salary and 45% of the
CIO’s base salary in each case for the period. The CIO was also awarded an additional bonus to increase the effective bonus percentage to 125% of the target. During a series of meetings in January and February 2022,2023, the Compensation and Leadership Development Committee evaluated achievement of the 20212022 corporate objectives and each Executive Director’s individual performance. The Compensation and Leadership Development Committee reviewed the following corporate goals and based on the results approved an overall average 100% achievement level of the 20212022 corporate objectives as the Company achieved its target goals. The goals were as follows: Corporate Goals and Achievements
•COMP360 for TRD: PrepareLaunched a phase III programme in TRD and phase II programmes in PTSD and anorexia nervosa; •Established a robust pipeline of new drug and technology assets to increase the value of COMPASS while demonstrating commitment to transforming mental health; •Prepared for a successful End of Phase IIb meeting and a promptscalable commercial launch of Phase III •Build out a portfolio of new indications for COMP360 new compounds, and technologies that have the potential to improve the safety, efficacy and accessibility of our therapies
•Position COMPASS as a leading mental health care company and fund future plans
•COMP360 for TRD: Prepare for a successful commercial launchtherapy that will ensure access for as many patients as possiblepossible; and
•DevelopDeveloped a talentedhigh-performing team and ana mission-driven organisation that makes rapid growth sustainable for employeescommitted to the highest standards of quality and compliance. Long term incentive awards during the year ended 31 December 2021.2022. During the 20212022 performance year, the Executive DirectorsMr Goldsmith and Ms Malievskaia were not awarded any furtheroptions and restricted share options or RSUs above whatunits ("RSUs") grants on 1 February 2022. Mr Nath was awarded in 2020.options and RSUs upon his hire date 1 August 2022. Payments to past Directors (audited) There were no payments to past Directors made during the financial year ending 31 December 2021 (2020:2022 (2021: nil). Payments for Loss of Office (audited)
There were no payments made to Directors for Loss of Office during the financial year ending 31 December 2021 (2020:2022 (2021: nil) and no such payments have been made in the period between 31 December 20212022 and the date of this report.
Statement of Directors’ Shareholding and Share Interests (audited) The Company does not have a formal policy on Executive or Non-Executive Director shareholdings. The table below details the total number of shares owned (including their beneficial interests), the total number of share options held, the number of share options vested but not yet exercised and the total number of restricted share units ("RSUs") held as at 31 December 20202021 and 31 December 2021,2022, respectively: | | | | | | | | | | | | | | | | | | | | | | | | | Shares | Share options | RSUs | | 2021 | Beneficially owned shares at 31 December 2021 | Total share options at 31 December 2021 | Unvested without performance conditions | Vested but unexercised | Total RSUs at 31 December 2021 | Unvested without performance conditions | Vested but unexercised | | Executive Directors | | George Goldsmith | 4,318,572 | 113,600 | 78,100 | 35,500 | 44,710 | 30,739 | — | | Ekaterina Malievskaia | 4,308,510 | 85,200 | 58,575 | 26,625 | 44,710 | 30,739 | — | | Non-Executive Directors | | David Norton | 127,984 | 147,404 | 26,839 | 120,565 | 23,740 | 16,321 | — | | Florian Brand | — | 5,396 | — | 5,396 | — | — | — | | Jason Camm | — | — | — | — | — | — | — | | Annalisa Jenkins | 113,054 | 132,474 | 26,839 | 105,635 | 23,740 | 16,321 | — | | Thomas Lonngren | 123,919 | 72,095 | 37,225 | 34,870 | — | — | — | | Robert McQuade | 1,600,523* | 33,584 | 27,738 | 5,846 | — | — | — | | Linda McGoldrick | 6,745 | 33,584 | 26,839 | 6,745 | — | — | — | | Wayne Riley | — | 24,000 | 24,000 | — | — | — | — |
*
| | | | | | | | | | | | | | | | | | | | | | | | | Shares | Share options | RSUs | | 2020 | Beneficially owned shares at 31 December 2020 | Total share options at 31 December 2020 | Unvested without performance conditions | Vested but unexercised | Total RSUs at 31 December 2020 | Unvested without performance conditions | Vested but unexercised | | Executive Directors | | George Goldsmith | 4,521,571 | 113,600 | 113,600 | | 44,710 | 44,710 | — | | Ekaterina Malievskaia | 4,521,571 | 85,200 | 85,200 | | 44,710 | 44,710 | — | | Non-Executive Directors | | David York Norton | 113,820 | 135,404 | 21,584 | 113,820 | 23,740 | 23,740 | — | | Florian Brand | — | 21,584 | 21,584 | — | — | — | — | | Jason Camm | 1,300 | 21,584 | 21,584 | — | — | — | — | | Annalisa Jenkins | 113,820 | 135,404 | 21,584 | 113,820 | 23,740 | 23,740 | — | | Thomas Lönngren | 122,227 | 60,095 | 37,906 | 22,189 | — | — | — | | Robert McQuade | — | 21,584 | 21,584 | — | — | — | — | | Linda McGoldrick | — | 21,584 | 21,584 | — | — | — | — |
| | | | | | | | | | | | | | | | | | | | | | | | | Shares | Share options | RSUs | | 2021 | Beneficially owned shares at 31 December 2021 | Total share options at 31 December 2021 | Unvested without performance conditions | Vested but unexercised | Total RSUs at 31 December 2021 | Unvested without performance conditions | Vested but unexercised | | Executive Directors | | George Goldsmith | 4,318,572 | 113,600 | 78,100 | 35,500 | 44,710 | 30,739 | — | | Ekaterina Malievskaia | 4,308,510 | 85,200 | 58,575 | 26,625 | 44,710 | 30,739 | — | | Non-Executive Directors | | David York Norton | 127,984 | 147,404 | 26,839 | 120,565 | 23,740 | 16,321 | — | | Florian Brand | — | 5,396 | — | 5,396 | — | — | — | | Jason Camm | — | — | — | — | — | — | — | | Annalisa Jenkins | 113,054 | 132,474 | 26,839 | 105,635 | 23,740 | 16,321 | — | | Thomas Lönngren | 123,919 | 72,095 | 37,225 | 34,870 | — | — | — | | Robert McQuade | 5,846 | 33,584 | 27,738 | 5,846 | — | — | — | | Linda McGoldrick | 6,745 | 33,584 | 26,839 | 6,745 | — | — | — | | Wayne Riley | — | 24,000 | 24,000 | — | — | — | — |
Includes 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Shares | Share options | RSUs | | | 2022 | Beneficially owned shares at 31 December 2022 | Total share options at 31 December 2022 | Unvested without performance conditions | Vested but unexercised | Total RSUs at 31 December 2022 | Unvested without performance conditions | Vested but unexercised | | | Executive Directors | | | Kabir Nath | — | 600,000 | 600,000 | — | 50,000 | 50,000 | — | | | George Goldsmith | 4,397,499 | 286,600 | 186,658 | 99,942 | 73,710 | 48,561 | — | | | Ekaterina Malievskaia | 4,349,794 | 160,200 | 96,650 | 63,550 | 57,710 | 32,561 | — | | | Non-Executive Directors | | | David Norton | 150,314 | 164,404 | 26,443 | 137,961 | 23,740 | 10,386 | — | | | Annalisa Jenkins | 135,384 | 149,474 | 26,443 | 123,031 | 23,740 | 10,386 | — | | | Thomas Lonngren | 149,137 | 89,095 | 30,894 | 58,201 | — | — | — | | | Robert McQuade | 1,618,818* | 50,584 | 27,342 | 23,242 | — | — | — | | | Linda McGoldrick | 25,040 | 50,584 | 26,443 | 24,141 | — | — | — | | | Wayne Riley | 11,500 | 45,250 | 34,750 | 10,500 | — | — | — | |
*Includes 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares.
The interests of the Directors in the Company’s share options and RSUs as at 31 December 20212022 is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Director | Date of grant | Price per Share ($) | Type | 01/01/2022 | Granted during the year | Exercised during the year | Vested in year | Cancelled during the period | 31/12/2022 | Date from which exercisable | Expiry date | | | Kabir Nath | 01/08/2022 | 14.94 | Option | — | 600,000 | — | — | — | 600,000 | 01/08/2022 | 31/07/2032 | | | 01/08/2022 | 0.01 | RSU | — | 50,000 | — | — | — | 50,000 | 01/08/2022 | 01/08/2026 | | | George Goldsmith | 18/09/2020 | 16.85 | Option | 113,600 | — | — | 28,400 | — | 113,600 | 18/09/2020 | 18/09/2030 | | | 01/02/2022 | 15.75 | Option | — | 173,000 | — | 36,042 | — | 173,000 | 01/02/2022 | 31/01/2032 | | | 30/06/2020 | 0.01 | RSU | 30,739 | — | — | 11,178 | — | 19,561 | 12/08/2020 | 01/08/2024 | | | 01/02/2022 | 0.01 | RSU | — | 29,000 | — | — | — | 29,000 | 01/02/2022 | 01/02/2026 | | | Ekaterina Malievskaia | 18/09/2020 | 16.85 | Option | 85,200 | — | — | 21,300 | — | 85,200 | 18/09/2020 | 18/09/2030 | | | 01/02/2022 | 15.75 | Option | — | 75,000 | — | 15,625 | — | 75,000 | 01/02/2022 | 31/01/2032 | | | 30/06/2020 | 0.01 | RSU | 30,739 | — | — | 11,178 | — | 19,561 | 12/08/2020 | 01/08/2024 | | | 01/02/2022 | 0.01 | RSU | — | 13,000 | — | — | — | 13,000 | 01/02/2022 | 01/02/2026 | | | David Norton | 20/07/2019 | 1.40 | Option | 99,049 | — | — | — | — | 99,049 | 05/05/2018 | 20/07/2029 | | | 30/03/2020 | 2.40 | Option | 14,771 | — | — | — | — | 14,771 | 05/05/2018 | 30/03/2030 | | | 18/09/2020 | 16.85 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 18/09/2020 | 18/09/2030 | | | 01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | | | 16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | | | 30/06/2020 | 0.01 | RSU | 16,321 | — | — | 5,935 | — | 10,386 | 12/08/2020 | 01/08/2024 | | | Annalisa Jenkins | 20/07/2019 | 1.40 | Option | 84,119 | — | — | — | — | 84,119 | 01/06/2018 | 20/07/2029 | | | 30/03/2020 | 2.40 | Option | 14,771 | — | — | — | — | 14,771 | 01/06/2018 | 30/03/2030 | | | 18/09/2020 | 16.85 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 18/09/2020 | 18/09/2030 | | | 01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | | | 16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | | | 30/06/2020 | 0.01 | RSU | 16,321 | — | — | 5,935 | — | 10,386 | 12/08/2020 | 01/08/2024 | | | Thomas Lonngren | 30/03/2020 | 0.01 | Option | 14,771 | — | — | — | — | 14,771 | 18/05/2018 | 30/03/2030 | | | 30/06/2020 | 0.01 | Option | 23,740 | — | — | 5,935 | — | 23,740 | 30/06/2020 | 30/06/2030 | | | 18/09/2020 | 16.85 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 18/09/2020 | 18/09/2030 | | | 01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | | | 16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | | | Robert McQuade | 23/11/2020 | 32.66 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 23/11/2020 | 22/11/2030 | | | 01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | | | 16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | | | Linda McGoldrick | 18/09/2020 | 17.05 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 18/09/2020 | 18/09/2030 | | | 01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | | | 16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | | | Wayne Riley | 31/03/2021 | 35.25 | Option | 24,000 | — | — | 10,500 | — | 24,000 | 31/03/2021 | 30/03/2031 | | | 16/06/2022 | 9.44 | Option | — | 21,250 | — | — | — | 21,250 | 16/06/2022 | 15/06/2032 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Director | Date of grant | Price Per Share ($) | Type | 01/01/2021 | Granted during the year | Exercised during the year | Vested in year | Cancelled during the period | 31/12/2021 | Date from which exercisable | Expiry date | | George Goldsmith | 18/09/2020 | 10.03 | Option | 113,600 | — | — | 35,500 | — | 113,600 | 18/09/2020 | 18/09/2030 | | 30/06/2020 | 10.15 | RSU | 44,710 | — | — | 13,971 | — | 30,739 | 12/08/2020 | 01/08/2024 | | Ekaterina Malievskaia | 18/09/2020 | 10.03 | Option | 85,200 | — | — | 26,625 | — | 85,200 | 18/09/2020 | 18/09/2030 | | 30/06/2020 | 10.15 | RSU | 44,710 | — | — | 13,971 | — | 30,739 | 12/08/2020 | 01/08/2024 | | David York Norton | 20/07/2019 | 1.50 | Option | 99,049 | — | — | — | — | 99,049 | 05/05/2018 | 20/07/2029 | | 30/03/2020 | 4.11 | Option | 14,771 | — | — | — | — | 14,771 | 05/05/2018 | 30/03/2030 | | 18/09/2020 | 10.03 | Option | 21,584 | — | — | 6,745 | — | 21,584 | 18/09/2020 | 18/09/2030 | | 01/10/2021 | 17.43 | Option | — | 12,000 | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | | 30/06/2020 | 10.15 | RSU | 23,740 | — | — | 7,419 | — | 16,321 | 12/08/2020 | 01/08/2024 | | Florian Brand | 23/11/2020 | 19.56 | Option | 21,584 | — | — | — | 21,584 | — | 23/11/2020 | 22/11/2030 | | 14/05/2021 | 18.83 | Option | — | 5,396 | — | 5,396 | — | 5,396 | 14/05/2021 | 22/11/2030 | | Jason Camm | 23/11/2020 | 19.56 | Option | 21,584 | — | — | — | 21,584 | — | 23/11/2020 | 22/11/2030 | | Annalisa Jenkins | 20/07/2019 | 1.50 | Option | 99,049 | — | 14,930 | — | — | 84,119 | 01/06/2018 | 20/07/2029 | | 30/03/2020 | 4.11 | Option | 14,771 | — | — | — | — | 14,771 | 01/06/2018 | 30/03/2030 | | 18/09/2020 | 10.03 | Option | 21,584 | — | — | 6,745 | — | 21,584 | 18/09/2020 | 18/09/2030 | | 01/10/2021 | 17.43 | Option | — | 12,000 | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | | 30/06/2020 | 10.15 | RSU | 23,740 | — | — | 7,419 | — | 16,321 | 12/08/2020 | 01/08/2024 | | Thomas Lönngren | 30/03/2020 | 5.56 | Option | 14,771 | — | — | — | — | 14,771 | 18/05/2018 | 30/03/2030 | | 30/06/2020 | 10.15 | Option | 23,740 | — | — | 5,935 | — | 23,740 | 30/06/2020 | 30/06/2030 | | 18/09/2020 | 10.03 | Option | 21,584 | — | — | 6,745 | — | 21,584 | 18/09/2020 | 18/09/2030 | | 01/10/2021 | 17.43 | Option | — | 12,000 | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | | Robert McQuade | 23/11/2020 | 19.56 | Option | 21,584 | — | — | 5,846 | — | 21,584 | 23/11/2020 | 22/11/2030 | | 01/10/2021 | 17.43 | Option | — | 12,000 | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | | Linda McGoldrick | 18/09/2020 | 10.15 | Option | 21,584 | — | — | 6,745 | — | 21,584 | 18/09/2020 | 18/09/2030 | | 01/10/2021 | 17.43 | Option | — | 12,000 | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | | Wayne Riley | 31/03/2021 | 21.45 | Option | — | 24,000 | — | — | — | 24,000 | 31/03/2021 | 30/03/2031 |
All options are subject to service rather than performance conditions. The options vestedvest monthly over 4 years with a 1 year 25% cliff for those granted after September 2020 and with a 25% cliff on the earlier of 1 year and IPO for the June 2020 grants. Awards granted in March 2020 vested fully upon IPO.
Awards granted prior to March 2020 had fully vested prior to IPO. RSU awards granted in February 2022 vest 25% per year for 4 years, and the options granted at that time vest monthly over 4 years. Mr Nath’s option grant awards vest over 4 years with a 1 year 25% cliff and his RSU awards vest 25% per year for 4 years. For the Non-Executive Officers, the options awarded on 1 October 2021 vested 100% after one year and the options awarded on 16 June 2022 vest upon the earlier of the one-year anniversary of the date of grant or the date of the 2023 annual general meeting of shareholders.
The beneficial and non-beneficial interests in the Company’s shares of the Directors and their families were as follows: | | | | | | | | | | NAME OF BENEFICIAL OWNER | ORDINARY SHARES BENEFICIALLY OWNED AT 31 December 2021 | | NUMBER | PERCENT | | Directors | | George Goldsmith | 4,318,572 | 10.3% | | Ekaterina Malievskaia | 4,308,510 | 10.3% | | Non-Executive Directors | | David York Norton | 127,984 | * | | | | | Jason Camm | — | — | | Annalisa Jenkins | 113,054 | * | | Thomas Lönngren | 123,919 | * | | Robert McQuade | 5,846 | * | | Linda McGoldrick | 6,745 | * | | Wayne Riley | — | — |
| | | | | | | | | | NAME OF BENEFICIAL OWNER | ORDINARY SHARES BENEFICIALLY OWNED AT 31 DECEMBER 2022 | | NUMBER | PERCENT | | Directors | | George Goldsmith | 4,397,499 | 10.3% | | Ekaterina Malievskaia | 4,349,794 | 10.2% | | Non-Executive Directors | | David Norton | 150,314 | * | | Annalisa Jenkins | 135,384 | * | | Thomas Lonngren | 149,137 | * | | Robert McQuade | 1,618,818** | 3.8% | | Linda McGoldrick | 25,040 | * | | Wayne Riley | 11,500 | * |
*Represents beneficial ownership of less than one percent.
**Includes 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission, or SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities and include ordinary shares that can be acquired within 60 days of 31 December 2021.2022. *Represents beneficial ownership of less than one percent.
Total Shareholder Return
The graph below shows the Company’s performance, measured by total shareholder return, for the Company’s American Depositary Shares (“ADSs”ADSs”), which are listed on Nasdaq and each representing one of the Company’s ordinary shares against the Nasdaq Composite Index (Nasdaq: CMPS vs NBI). TheNCI) and the Nasdaq Biotech Index has been(Nasdaq: CMPS vs NBI). We have selected these indices for this comparison because the Company has been admitted to trading on the Nasdaq exchange and it is consideredoperates as a Biotech and we consider them to be the most suitable comparator index.
indices.
Chief Executive Officer total remuneration history
2020 was the first year that the Company prepared a Remuneration Report. We have taken the exemption not to disclose 5 years of history of remuneration and have chosen to disclose remuneration history for 2020 onwards. Percentage change in remuneration of the Executive and Non-Executive Directors
The year on year movement to 31 December 2021 of CEO, CIO and Non-Executive Directors pay versus that of employees is disclosed in the table below. | | | | | | | | | | | | | Change in pay between 31 December 2021 and 31 December 2020 | | Salary | Annual Bonus | Benefits | | CEO % change | 29 | % | 37 | % | 9 | % | | CIO % change | 14 | % | 54 | % | 4 | % | | David Norton | 288 | % | n/a | n/a | | Jason Camm | n/a | n/a | n/a | | Annalisa Jenkins | 277 | % | n/a | n/a | | Thomas Lonngren | 277 | % | n/a | n/a | | Robert McQuade | 277 | % | n/a | n/a | | Linda McGoldrick | 278 | % | n/a | n/a | | Wayne Riley | n/a | n/a | n/a | | Employees % change | 17 | % | 29 | % | 36 | % | | | | |
| | | | | | | | | | | | | Salary | Annual Bonus (1) | Benefits (1) | | CEO % change | 29 | % | 37 | % | 9 | % | | CIO % change | 14 | % | 54 | % | 4 | % | | David Norton (2) | 288 | % | n/a | n/a | | Jason Camm (3) | n/a | n/a | n/a | | Annalisa Jenkins (2) | 277 | % | n/a | n/a | | Thomas Lonngren (2) | 277 | % | n/a | n/a | | Robert McQuade (2) | 277 | % | n/a | n/a | | Linda McGoldrick (2) | 278 | % | n/a | n/a | | Wayne Riley (4) | n/a | n/a | n/a | | Employees % change | 17 | % | 29 | % | 36 | % |
(1)
The year on year movement to 31 December 2022 of CEO, Executive Chairman, CIO and Non-Executive Directors pay versus that of employees is disclosed in the table below. | | | | | | | | | | | | | | | | | | | | | | Change in pay between 31 December 2022 and 31 December 2021 | | | | | Salary | Annual Bonus (1) | Benefits (1) | | | | | CEO % change (2)* | (1) | % | 6 | % | (100) | % | | | | | CEO % change (2)** | (8) | % | (2) | % | 7 | % | | | | | Executive Chairman % change (2) | 100 | % | 100 | % | 100 | % | | | | | CIO % change | (8) | % | (29) | % | 5 | % | | | | | David Norton | (3) | % | n/a | n/a | | | | | Annalisa Jenkins | (10) | % | n/a | n/a | | | | | Thomas Lonngren | (8) | % | n/a | n/a | | | | | Robert McQuade | (10) | % | n/a | n/a | | | | | Linda McGoldrick | (9) | % | n/a | n/a | | | | | Wayne Riley (3) | 20 | % | n/a | n/a | | | | | Employees % change | (37) | % | (27) | % | (19) | % | | | |
*Represents Kabir Nath *Represents George Goldsmith
1.None of the Non-Executive Directors are eligible for an annual bonus and none claimed any benefits during the year. (2)David Norton, Annalisa Jenkins, Thomas Lonngren, Robert McQuade2.During 2022, Kabir Nath joined as our Chief Executive Officer, effective 1 August 2022 and Linda McGoldrick joined the BoardGeorge Goldsmith transitioned to Executive Chair. The remuneration received by Mr. Nath and Mr Goldsmith in 2020 and2022 in respect of their roles as CEO were full annual amounts, therefore for comparison purposes, the remuneration received in 20202022 as CEO was notpro-rated as a full annual amount.result and was compared to Mr. Goldsmith's remuneration for the year ended 31 December 2021.
(3) On 1 February 2021, Jason Camm permanently waived any and all compensation which he was entitled to receive.
(4) 3.Wayne Riley joined the Board in 2021 and the remuneration received in 2021 was not a full annual amount.
4.Year over year decreases in average salary are the result of fluctuations in foreign currency exchange rates and as a result of the hire of additional employees at lower pay bands.
Relative importance of spend on pay
The Committee considers the Company’s research and development expenditure relative to remuneration expenditure for all employees, to be the most appropriate metric for assessing overall spend on pay due to the nature and stage of the Company’s business. Dividend distribution comparators have not been included as the Company has no history of such transactions. The graph below illustrates the gross remuneration to all employees compared to research and development expenditure in 20212022 and in 2020 post IPO (18 September 2020 to 31 December 2021).2021. The Committee notes that research and development expenditure may increase in future years as the Company continues to progress its COMP360 psilocybin therapy into later stage clinical trials for the treatment of TRD and into trials for other indications, as well as developing other neuropsychiatric therapies.
Structure and Role of Committee and Approach to Remuneration Matters The Committee is comprised of Annalisa Jenkins, who chairs the Committee, David York Norton and Wayne Riley. The constitution of the Committee is in compliance with Nasdaq requirements. The members of the Committee are Independent Directors as defined in Rule 10A-310C-1 under the US Securities Exchange Act of 1934.1934 and under applicable NASDAQ listing rules.
It is the Board's belief that good corporate governance is integral to a successful business and the Company finds instructive the standards of corporate governance prescribed by the Corporate Governance Code for Small and Mid-Size Quoted Companies from The Quoted Companies Alliance (the “QCA Code”“QCA Code”). The Board believes that this corporate governance framework is an appropriate guide for the Company, having regard to its size and nature.
The Committee’s approach to remuneration matters is to enable the Company to attract and retain talent, incentivizeincentivise long-term value generation and effectively manage the Company’s cash resources. It is the belief of the Committee that this is best achieved through a greater emphasis on variable rather than fixed remuneration, comprised of a mix of base salary and benefits, along with the flexibility to appropriately reward and incentivizeincentivise with variable pay and longer term incentives, as described within the Policy. When applying the Policy to Executive Directors, the Committee seeks to comply with the QCA Code so far as it is practical to do so, having regard to the size, nature and business requirements of the Company. Operation of the Policy will largely be compliant with the remuneration elements of the QCA Code, but we are aware that in certain instances we will differ from the QCA Code. These instances reflect differences in US market practice when compared to the UK, and the need to balance our governance obligations against the importance of offering competitive remuneration packages in the markets in which we compete and operate. The terms of reference of the Committee can be found on our website at www.compasspathways.com. External advice During the year, the Company engaged Aon Solutions UK Limited (Aon) to support management and the Committee with advice on remuneration matters, in particular peer-group benchmarking of Director and Senior Management remuneration and the grant of long term equity incentives under the 2020 Plan that became effective on the day prior to the listing of our ADSs on Nasdaq. The consultants were appointed by the Committee. The Company also engaged Aon to support management in the valuation of option awards granted under the 2020 Plan. The Committee is satisfied that Aon provides independent and objective advice, as Aon is a leading global professional services firm and the boardBoard confirm no conflicts of interest before each meeting. During 20212022 fees of $76,957 (2020: $82,500)$213,826 (2021: $76,957) were paid to Aon Consulting Inc.Solutions UK Limited (Aon).
Proposed Application of the Policy for the Year Ending 31 December 20222023 CEO remuneration i)Fixed elements of remuneration With effect from 1 January 2022,2023, the base salary of George GoldsmithKabir Nath in his role as Chairman and Chief Executive Officer (CEO) and Executive Director of the Company is £433,500 ($585,108)$594,500 (£491,201) per annum. ii)Variable elements of remuneration - Short-term incentives The target bonus for Mr. GoldsmithNath for the 20222023 performance year will be 60% of base salary. Benchmarking the CEO bonus against peers identified it would be appropriate to increase the target bonus to 60% (2021: 55%). The performance objectives for Mr. GoldsmithNath against which the Committee will determine the annual bonus were approved by the Board in February 2021.2023. The detail behind the performance objectives is currently considered to be commercially sensitive as they relate to the strategy that the Company intends to take with respect to the advancement of the COMP360 clinical development program and the Company’s financial and commercial goals. To the extent that the objectives do not comprise commercially sensitive information, the Company expects to disclose both the objectives and performance against those objectives in next year’s Remuneration Report. iii)Long-term incentive awards Long term incentives for 20222023 were awarded on 12 February 2022.2023. The Company awards share options to all employees in order to align long-term employee interests with those of shareholders. On 2 February 2023, the Company awarded Mr. Nath 153,900 share options and 25,200 restricted share units. Chairman remuneration i)Fixed elements of remuneration
With effect from 1 January 2023, the base salary of George Goldsmith in his role as non- Executive Chairman of the Company is £80,000 ($96,824) per annum. ii)Long-term incentive awards Mr Goldsmith will be awarded 25,500 options at the 2023 AGM for his role as Chairman.
CIO remuneration
i) Fixed elements of remuneration With effect from 1 January 2022,2023, the base salary of Ekaterina Malievskaia in her role as Chief Innovation Officer (CIO) and Executive Director of the Company is £306,000 ($413,017)370,352) per annum. ii) Variable elements of remuneration - Short-term incentives The target bonus for Dr Malievskaia for the 20212023 performance year will be 45% of base salary. The performance objectives for Dr Malievskaia against which the Committee will
determine the annual bonus were approved by the Board in February 2021.2023. The detail behind the performance objectives is currently considered to be commercially sensitive as they relate to the strategy that the Company intends to take with respect to the advancement of the COMP360 clinical development program and the Company’s financial and commercial goals. To the extent that the objectives do not comprise commercially sensitive information, the Company expects to disclose both the objectives and performance against those objectives in next year’s Remuneration Report. iii) Long-term incentive awards Long term incentives for 20222023 were awarded on 12 February 2022.2023. The Company awards share options to all employees in order to align long-term employee interests with those of shareholders.
On 2 February 2023, the Company awarded Dr. Malievskaia 67,500 share options and 11,700 restricted share units.
Chairman and Non-Executive Director fees (audited) Chairman fees GeorgeMr Goldsmith serves as both Chairman and CEO and does not receive any additional remuneration in respect of his role as Chair.chair other than the total amounts disclosed above.
Non-Executive Director cash fees Non-Executive Directors are paid a basic fee. In addition to the basic fee, committee fees may be paid for chairing or membership of a Board committee. Non-Executive Director fees were reviewed in 2021.2022. Non-Executive Directors are eligible to receive the following annual fees:
| | | | | | | | | | | | 2021
($) | 2020
($) | | Annual Retainer for Board Membership*: | | 41,270 | 38,524 | | Additional Annual Retainer for Lead Independent Director: | | 20,635 | 12,841 | | Additional Retainers for Committee Membership: | | | | | Audit and Risk Committee Chair: | | 16,508 | 15,410 | | Audit and Risk Committee member: | | 8,254 | 7,705 | | Compensation and Leadership Development Committee Chair: | | 11,005 | 10,273 | | Compensation and Leadership Development Committee member: | | 5,503 | 5,137 | | Nominating and Corporate Governance Committee Chair: | | 9,630 | 7,705 | | Nominating and Corporate Governance Committee member: | | 4,815 | 3,852 | | Innovation and Research Committee Chair: | | 11,005 | 10,273 | | Innovation and Research Committee member: | | 5,503 | 5,137 |
| | | | | | | | | | | | 2022
($) | 2021
($) | | Annual Retainer for Board Membership*: | | 37,114 | 41,270 | | Additional Annual Retainer for Lead Independent Director: | | 18,557 | 20,635 | | Additional Retainers for Committee Membership: | | | | | Audit and Risk Committee Chair: | | 14,846 | 16,508 | | Audit and Risk Committee member: | | 7,423 | 8,254 | | Compensation and Leadership Development Committee Chair: | | 9,897 | 11,005 | | Compensation and Leadership Development Committee member: | | 4,949 | 5,503 | | Nominating and Corporate Governance Committee Chair: | | 8,660 | 9,630 | | Nominating and Corporate Governance Committee member: | | 4,330 | 4,815 | | Innovation and Research Committee Chair: | | 9,897 | 11,005 | | Innovation and Research Committee member: | | 4,949 | 5,503 |
* for general availability and participation in meetings and conference calls of our Board of Directors, to be paid monthly, pro-rated based on the number of actual days served by the directorDirector during such calendar month. **Year over year decreases in salary are the result of fluctuations in foreign currency exchange rates rather than actual decreases in compensation paid in GBP. Note: Chair and committee member retainers are in addition to retainers for members of the Board of Directors. In accordance with the Company's Articles of Association, Directors are allocated into one of three classes. Each class of directorsDirectors serves a staggered three-year term. At each annual general meeting, the successors of directorsDirectors whose terms then expire will be elected to serve from the time of election and
qualification until the third annual meeting following election. Directors of the class retiring at the annual general meeting shall be eligible for re-appointment by ordinary resolution at such annual general meeting. The Company’s Class I directorsDirectors are David York Norton, Ekaterina Malievskaia and Wayne
Riley, allwhom were re-elected at the 2021 annual general meeting. The Company’s Class II Directors are Kabir Nath (who was appointed in August 2022 and therefore will stand for re-election at the 2023 annual general meeting), Robert McQuade and Thomas Lönngren, each of whom were re-elected at last year's annual general meeting. The Company’s Class II directors are Jason Camm, Robert McQuade and Thomas Lönngren, each of whom shall be eligible for re-appointment at this year's annual general meeting. The Company’s Class III directorsDirectors are Annalisa Jenkins, George Goldsmith and Linda McGoldrick, each of whom shall be eligible for re-electionre- election at the 2023 annual general meeting. Pursuant to our Articles of Association, if the directorDirector eligible for re-election does not seek re-election and no other directorDirector is elected to fill their respective position(s), they shall be re-elected by default if the relevant directorDirector is willing to do so.
Details of Directors’ service contracts or letters of appointment for the year ended 31 December 20212022 are as follows: | | | | | | | | | | Director | Executive/NED | Date of contract | | Kabir Nath | Executive | 01 August 2022 | | George Goldsmith | Executive | 15 September 202001 August 2022 | | Ekaterina Malievskaia | Executive | 17 September 2020 | | David York Norton | NED | 14 September 2020 | | | | Jason Camm | NED | 2 March 2020 | | Annalisa Jenkins | NED | 14 September 2020 | | Thomas Lönngren | NED | 15 September 2020 | | Robert McQuade | NED | 25 March 2021 | | Linda McGoldrick | NED | 14 September 2020 | | Wayne Riley | NED | 31 March 2021 |
The information in this part of the Remuneration Report is not subject to audit. Directors’ Remuneration Policy This remuneration policy was approved by shareholders in a binding vote at the AGM held on 22 June 2021.
Statement of consideration of shareholder views The Compensation and Leadership Development Committee will consider any shareholder feedback received and ongoing shareholder feedback throughout the year, when reviewing and applying the Policy each year.
The broad topics discussed with shareholders in 20212022 include peer groups and appropriate jurisdiction for benchmarking directorsDirectors remuneration.
The guidance from shareholder representative bodies is also considered on an ongoing basis. More specifically,The Committee submits a its U.K. Statutory Directors’ annual report on remuneration for a non-binding, advisory vote of shareholders at its annual general meeting of shareholders. At the 2022 annual general meeting of shareholders, 88.1% of shareholders voted in favor of the proposal to receive and approve, as a non-binding advisory resolution, the U.K. Statutory Directors’ Remuneration Report for the year ended 31 December 2021, with 0.1% voted against and 11.8% withheld from such proposal. Although non-binding, the Compensation and Leadership Development Committee will consult with major shareholdersreview and consider the voting results when proposing any significant changes to the Policy in the future.making future decisions regarding our Director remuneration program. The attendees of the Compensation and Leadership Development Committee meetings in 20212022 were as follows: | | | | | | | Director | Attendance | George Goldsmith | 5 of 5 | | Jason Camm* | 23 of 53 | David York NortonNorton** | 5 of 56 | | Annalisa Jenkins | 56 of 56 | Wayne Riley**Riley | 26 of 26 |
*Jason Camm attended 23 of 3 meetings prior to stepping down from the Board effective 16 June 2022. **David York Norton attended 5 of 6 meetings due to scheduling conflicts. **Wayne Riley attended every meeting after joining the Compensation and Leadership Development Committee.
FORM OF PROXY FOR ORDINARY SHAREHOLDERS
000) | December 31,
2021
(
(1) “Audit Fees” consist of fees billed for the audit of our annual consolidated financial statements and statutory accounts. (2) “Audit-related” fees consist of fees in connection with the review of our interim consolidated financial statements. (3) “Tax Fees” consist of fees billed for tax planning advice in respect of intercompany arrangements and structuring in connection with both our initial public offering (“IPO”) and ongoing operations. (4) “All Other Fees” consist of non-audit fees paid to PwC for advisory services in relation to fundraising F-3 shelfand registration and Environmental, Social and Governance landscaping.statements filed with the SEC.
The Audit and Risk Committee has determined that the rendering of non-audit services by PwC is compatible with maintaining the principal accountant’s independence. Pre-Approval Procedures The Audit and Risk Committee pre-approves all audit and permissible non-audit services provided by the independent registered certified public accounting firm unless an exception to such pre-approval exists under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or the rules of the SEC. These services may include audit services, audit-related services, tax services and other services. Our Audit and Risk Committee has pre-approved all services performed by the independent registered public accounting firm since the pre-approval policy was adopted prior to our initial public offering.
REQUIRED VOTE
REQUIRED VOTE
The ratification of the selection of PwC as our independent registered public accounting firm requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. This vote is advisory and non-binding. Abstentions and broker non-votes, if any, will have no effect on this proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board of Directors recommends that the shareholders vote “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022.2023.
PROPOSAL 5—7—AUTHORIZATION FOR THE AUDIT AND RISK COMMITTEE TO DETERMINE THE AUDITORS’ REMUNERATION FOR THE FISCAL YEAR ENDING DECEMBER 31, 20222023 Proposal 57 authorizes the Audit and Risk Committee to determine our auditors’ remuneration for the fiscal year ending December 31, 2022.2023. Fees for PwC, our independent registered public accounting firm and our statutory auditor, in respect of the years ended December 31, 20212022 and December 31, 2020,2021, are set forth in Proposal 46 above. The Audit and Risk Committee is directly responsible for the appointment, retention and termination, and for determining the compensation of the Company’s independent registered public accounting firm. The Audit and Risk Committee shall pre-approve all auditing services and the terms thereof and non-audit services (other than non-audit services prohibited under Section 10A(g) of the Exchange Act or the applicable rules of the SEC or the Public Company Accounting Oversight Board (“PCAOB”)), except that pre-approval is not required for the provision of non-audit services if the “de minimis” provisions of Section 10A(i)(1)(B) of the Exchange Act are satisfied. The Audit and Risk Committee may delegate to the chairperson of the Audit and Risk Committee the authority to grant pre-approvals for audit and non-audit services, provided such approvals are presented to the Audit and Risk Committee at its next scheduled meeting. All services provided by PwC during fiscal year 20212022 were pre-approved by the Audit and Risk Committee in accordance with the pre-approval policy described above, and all audit-related fees, tax fees and other fees during the fiscal year 20212022 were approved by the Audit and Risk Committee. REQUIRED VOTE The authorization of the Audit and Risk Committee to determine auditor remuneration requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, will have no effect on this proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board of Directors recommends that the shareholders vote “FOR” the authorization of our Audit and Risk Committee to determine our auditors’ remuneration for the fiscal year ending December 31, 2022.2023.
PROPOSAL 6—8—RESOLUTION TO RECEIVE THE COMPANY’S U.K. STATUTORY ANNUAL ACCOUNTS AND REPORTS
At the Meeting, our Board will present our U.K. statutory annual accounts and reports for the period January 1, 20212022 through December 31, 2021,2022, which includes the audited portion of the directors’ annual report on remuneration. REQUIRED VOTE The receipt of the U.K. statutory annual accounts and reports requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, will have no effect on this proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board of Directors recommends that the shareholders vote “FOR” the resolution to receive our U.K. statutory annual accounts and reports.
PROPOSAL 7—9—APPROVAL OF OUR U.K. STATUTORY DIRECTORS’ ANNUAL REPORT ON REMUNERATION Our U.K. statutory directors’ remuneration report is set forth as Annex A to this Proxy Statement. The directors’ remuneration report includes the annual report on remuneration. This document describes in detail our remuneration policies and procedures and explains how these policies and procedures help to achieve our compensation objectives with regard to our directors and the retention of high-quality directors. Our Board of Directors and our Compensation and Leadership Development Committee believe that the policies and procedures as articulated in the directors’ remuneration report are effective and that as a result of these policies and procedures we have and will continue to have high-quality directors. Our Board of Directors has approved and signed the report in accordance with English law. At the Meeting, the shareholders will vote on the annual report on remuneration. This vote is advisory and non-binding. Although non-binding, our Board and Compensation and Leadership Development Committee will review and consider the voting results when making future decisions regarding our director remuneration program. Following the Meeting, and as required under English law, the directors’ annual report on remuneration will be delivered to the U.K. Registrar of Companies. REQUIRED VOTE The approval of our U.K. statutory directors’ annual report on remuneration requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. This vote is advisory and non-binding. Abstentions and broker non-votes, if any, will have no effect on this proposal. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board of Directors recommends that the shareholders vote “FOR” approval of our U.K. statutory directors’ annual report on remuneration set forth in Annex A.
PROPOSAL 8— NON-BINDING, ADVISORY VOTE ON THE FREQUENCY OF FUTURE VOTES ON EXECUTIVE COMPENSATION The Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended, and Section 14A of the Exchange Act enable our shareholders to vote, on a non-binding, advisory basis, for their preference as to how frequently we should hold future votes on an advisory, non-binding basis to approve the compensation of our named executive officers, also known as a “Say-on-Pay” proposal. We are asking our shareholders whether our future Say-on-Pay votes should occur every one, two, or three years. Shareholders may also abstain from voting.
This vote is advisory and non-binding. However, our Board and Compensation and Leadership Development Committee value the opinions of our shareholders and will review and consider the voting results when making future decisions regarding the frequency of votes on the compensation of our named executive officers.
Currently, the Board believes that it is in the best interests of the Company and our shareholders to hold a Say-on-Pay vote every year, and this is the frequency recommended by our Board. We believe this frequency will enable our shareholders to vote, on a non-binding,advisory basis, on our most recent executive compensation practices and decisions as presented in our annual proxy statements, which will lead to greater transparency and more meaningful and timely communication between the Company and our shareholders regarding the compensation of our named executive officers. Accordingly, we ask our shareholders to indicate their preferred voting frequency by voting for every “one year,” “two years,” or “three years” (or abstaining from voting) in response to the following resolution at the Meeting:
“RESOLVED, to approve, on a non-binding, advisory basis, the alternative of every one year, two years, or three years as the preferred frequency with which the Company is to hold an advisory vote on the compensation of the Company’s named executive officers and the frequency that receives the highest number of votes cast by shareholders in person or by proxy at the AGM will be deemed the preferred frequency.”
REQUIRED VOTE
The Ordinary Shareholder Proxy Form provides shareholders with the opportunity to vote on one of three options with respect to this proposal (for the approval of holding the vote every year, for holding the vote every two years or for holding the vote every three years). These options are included in sub-resolutions 8a, 8b and 8c on the Ordinary Shareholder Proxy Form. If a shareholder votes on more than one of this proposal's sub-resolutions on the Ordinary Shareholder Proxy Form, his or her vote will be deemed invalid and will not be counted on the matter. The ADS Proxy Card provides the holders of ADSs with the opportunity to choose among four options with respect to this proposal (holding the vote every one, two, or three years, or abstaining). The option that receives the highest number of votes from the voting power present in person or by proxy at the Meeting and entitled to vote thereon will be deemed to be the frequency preferred by our shareholders. Abstentions and broker non-votes will have no effect on this proposal.
RECOMMENDATION OF THE BOARD OF DIRECTORS
Our Board of Directors recommends that the shareholders vote “FOR” the proposal that future, non-binding advisory votes on the compensation of our named executive officers occur every year.
PROPOSAL 9—10—ADVISORY (NON-BINDING) VOTE TO APPROVE THE COMPANY’S EXECUTIVE COMPENSATION
Section 14A of the Exchange Act requires that we provide our shareholders with the opportunity to vote to approve, on a non-binding, advisory basis, not less frequently than once every three years, the compensation of our named executive officers as disclosed in this Proxy Statement in accordance withofficers. Based on the compensation disclosure rulesvoting results of the SEC.vote on the frequency of future votes on executive compensation at our 2022 Annual General Meeting of Shareholders (the "2022 AGM"), our Board has determined that an advisory vote by the shareholders regarding named executive officer compensation will be conducted on an annual basis. Our compensation programs are designed to effectively align our executives’ interests with the interests of our shareholders by focusing on long-term equity incentives that correlate with the growth of sustainable long-term value for our shareholders. Shareholders are urged to read the section titled “ExecutiveCompensation Discussion and Analysis” in this Proxy Statement, which discusses how our executive compensation policies and practices implement our compensation philosophy and contains tabular information and narrative discussion about the compensation of our named executive officers in conjunction withfor the section titled “Named Executive Officer Compensation,” which provides additional information on the 2021 compensation of our Named Executive Officers.year ended December 31, 2022. Our Board and our Compensation and Leadership Development Committee believe that these policies and practices are effective in implementing our compensation philosophy and in achieving our compensation program goals. The vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the compensation of our named executive officers, as described in this Proxy Statement in accordance with the compensation disclosure rules of the SEC. Accordingly, we are asking our shareholders to vote on the following resolution at the Meeting: RESOLVED, that the shareholders hereby approve, on a non-binding advisory basis, the compensation paid to the Company’s named executive officers, as disclosed in the Company’s Proxy Statement for the 20222023 Annual General Meeting, pursuant to the compensation disclosure rules of the SEC, including the Executive Compensation Discussion and Analysis,section, the compensation tables and the narrative discussions that accompany the compensation tables. REQUIRED VOTE The approval of this advisory non-binding proposal requires the affirmative vote of more than 50% of the holders of the shares entitled to vote and who are present or represented by proxy at the Meeting. Abstentions and broker non-votes, if any, will have no effect on this proposal. The vote is advisory, which means that the vote is not binding on the Company, our Board or our Compensation and Leadership Development Committee. To the extent there is any significant vote against our named executive officer compensation as disclosed in this Proxy Statement, our Compensation and Leadership Development Committee will evaluate whether any actions are necessary to address the concerns of shareholders. RECOMMENDATION OF THE BOARD OF DIRECTORS Our Board of Directors recommends that the shareholders vote “FOR” the approval, on a non-binding advisory basis, of the compensation of our named executive officers, as disclosed in this Proxy Statement.
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE BOARD OF DIRECTORS Below is a list of our directors and their positions and ages as of April 19, 2022.4, 2023. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Age | | | | Position | | George Goldsmith | | 6667 | | | | Chief Executive Officer, Chair of the Board | | David Norton | | 7071 | | | | Lead Director | Jason CammKabir Nath | | 3358 | | | | Chief Executive Officer, Director | | Annalisa Jenkins, MBBS | | 5657 | | | | Director | | Thomas Lönngren | | 7172 | | | | Director | | Ekaterina Malievskaia | | 5556 | | | | Chief Innovation Officer, Director | | Linda McGoldrick | | 6768 | | | | Director | | Robert McQuade | | 6566 | | | | Director | | Wayne Riley | | 6272 | | | | Director |
During the year ended December 31, 2021,2022, there were elevensix full meetings of our Board. All of our then serving Directors attended a minimum of 75% of the aggregate of the meetings of the Board of Directors and meetings of the committees of which he or she was a member during 2021.2022. Under our Corporate Governance Guidelines, each of our directors is expected to make reasonable efforts to attend meetings of the Board. Directors are also expected to attend our annual general meeting of shareholders to the extent practicable. The biographical information for Thomas LönngrenGeorge Goldsmith, Annalisa Jenkins, Linda McGoldrick and Robert McQuade,Kabir Nath, the nominees to our Board, is provided in “Proposal 1—Re-Election of Thomas LönngrenGeorge Goldsmith to the Board of Directors,” and “Proposal 2—Re-Election of Robert McQuadeAnnalisa Jenkins to the Board of Directors,” “Proposal 3—Re-Election of Linda McGoldrick to the Board of Directors,” and “Proposal 4—Re-Election of Kabir Nath to the Board of Directors,” respectively. Below is biographical information for those directors who are not standing for re-election at this Meeting and who will remain seated following the Meeting. George Goldsmith has served as our Chief Executive Officer and Chair of our Board since June 2017. Previously, Mr. Goldsmith served as Chair and Chief Executive Officer at Tapestry Networks, which he co-founded in 2002, until 2005, and he continues to serve as Non-Executive Chairman. Mr. Goldsmith was Chief Executive Officer of TomorrowLab@McKinsey from 2000 to 2001, and prior to that served as Senior Advisor to McKinsey & Company from 1997 to 2000. Prior to that he served as Managing Director of the Lotus Institute after the Lotus Development Corporation’s acquisition of his first company, The Human Interface Group. Mr. Goldsmith also serves on the board of directors of COMPASS Pathways Limited. Mr. Goldsmith received his bachelor’s degree in Psychology from the University of Rochester and his masters in Clinical Psychology from the University of Connecticut. We believe that Mr. Goldsmith is qualified to serve on our Board because of his executive experience in our industry.
David Norton has served as a member of our Board since May 2018. Until his retirement in September 2011, Mr. Norton was Company Group Chairman, Global Pharmaceuticals for Johnson & Johnson, a public healthcare company. Mr. Norton began his Johnson & Johnson career in 1979 and held a number of positions at the company, including Company Group Chairman, Worldwide Commercial and Operations for the CNS, Internal Medicine franchise from 2006 to 2009, Company Group Chairman for the pharmaceutical businesses in Europe, the Middle East and Africa from 2004 to 2006, and Company Group Chairman for the pharmaceutical businesses in North America from 2003 to 2004. Mr. Norton currently serves on the board of directors of Mallinckrodt, PLC, Forepont Capital, LLC, and the Global Alliance for TB Drug Development (now known as TB Alliance). Previously during the past five years, Mr. Norton served on the board of directors of Mallinckrodt, PLC (NYSE American: MNK) and Vivus, Inc. Mr. Norton is a graduate of Control Data Institute, Australia and the College of Distributive Trades, United Kingdom. We believe that Mr. Norton is qualified to serve on our Board because of his experience, qualifications, attributes and skills, including his extensive global pharmaceutical experience. Annalisa Jenkins, MBBS, FRCPThomas Lönngren, has served as a member of our Board since May 2018. Mr. Lönngren currently serves as the Director at PharmaExec Consulting AB and as a Strategic Advisor at the NDA Group, which he has done since 2010. He is non-executive board member and chairman at Egetis Therapeutics AB, Sweden and board member at the NDA group Sweden. He acts as an advisor to the following companies and organizations: Artis Venture, San Francisco, U.S., Baren Therapeutics, San Francisco, U.S., faculty member of GLG Institute (Gerson Lehrman Group), New York, U.S., and special advisor to the Centre for Innovation in Regulatory Science (CIRS), London, U.K. He was the Deputy General Director of the Swedish Medical Product Agency until 2000. From November 20172001 until April 2019, Dr. Jenkins2010, Mr. Lönngren served as the Chief Executive Officer of PlaqueTec Ltd., a biotechnology company focusing on coronary artery disease treatment and prevention. Previously, Dr. Jenkins served as the Chief Executive Officer and a memberDirector of the boardEuropean Medical Agency. Mr. Lönngren received his degree in pharmacy and MSc in Social and Regulatory Pharmacy from Uppsala University. He is an Honorary Member of directorsthe Royal Pharmaceutical Society of Dimension Therapeutics, Inc., a biotechnology company focused on rareGreat Britain, Honorary Fellow of the Royal College of Physicians in Great Britain, and metabolic diseases associated withholds Honorary Doctorates from the liver, from September 2014 until its sale to Ultragenyx PharmaceuticalUniversity of Uppsala and University of Bath, U.K. We
Inc. in November 2017. From October 2013believe that Mr. Lönngren is qualified to March 2014,serve on our Board because of his experience, qualifications, attributes and skills, including his extensive pharmaceutical consulting experience.
Robert McQuade, Ph.D. has served as a member of our Board since April 2020. Dr. Jenkins servedMcQuade currently serves as the Executive Vice President Head& Chief Strategic Officer at Otsuka Pharmaceutical Development & Commercialization, Inc., where he has served since 2004. Dr. McQuade is also the Officer and Manager of Globalthe McQuade Center for Strategic Research and Development for Merck Serono Pharmaceuticals, a biopharmaceutical company. Previously, from September 2011 to October 2013, she served as Merck Serono’s Executive Vice President, Global Development and Medical, and was a member of Merck Serono’s executive committee. Prior to that,LLC since February 2020. Dr. Jenkins pursued a 15-year career at Bristol-Myers Squibb Company, a biopharmaceutical company, where, from July 2009 to June 2011 she was a Senior Vice President and Head of Global Medical Affairs. Dr. Jenkins isMcQuade currently a committee member of the science board to the FDA, chairs the Court of the London School of Hygiene and Tropical Medicine and is a non-executive director of Genomics England. Dr. Jenkins serves on the board of directors of Avrobio,entities related to Otsuka, including Otsuka America Pharmaceutical, Inc. (Nasdaq: AVRO), Oncimmune Holdings plc (LSE: ONC)Astex Pharmaceutical, Inc., Affimed GmbH (Nasdaq: AFMD)Astex Pharmaceutical, Ltd., Avanir Pharmaceuticals, Visterra, Inc., Otsuka Pharmaceutical Development & Commercialization, Inc. and a numberthe McQuade Center for Strategic Research and Development. He also serves on the board of privately held biotechnology and life science companies.directors of The Technology Accelerator Co., which is based in Charleston, SC. Dr. Jenkins graduated with aMcQuade received his degree in medicinebiology from St. Bartholomew’s HospitalDavidson College and completed his Ph.D. in thebiochemistry from University of LondonNorth Carolina at Chapel Hill. Prior to joining Otsuka, Dr. McQuade worked in drug discovery research at Schering-Plough Corp. and subsequently trained in cardiovascular medicine in the U.K. National Health Service. Earlier in her career, Dr. Jenkins served as a Medical Officer in the British Royal Navy.global medical affairs at Bristol-Myers Squibb Company (NYSE: BMS). We believe that Dr. JenkinsMcQuade is qualified to serve on our Board based on her industrybecause of his experience in the fieldclinical development and regulatory affairs, in which we operateaddition to his qualifications, attributes and her executive experience with companies in our industry.skills, including his extensive pharmaceutical experience. Ekaterina Malievskaia M.D. has served as our Chief Innovation Officer since January 2020 and as a member of our Board since 2017. Prior to her role as our Chief Innovation Officer, Dr. Malievskaia served as our Head of Research and Development from January 2019 to January 2020 and as our Chief Medical Officer from June 2017 to 2019. Dr. Malievskaia also previously served as clinical faculty at Mount Sinai School of Medicine and as a research professor in Public Health at the City University of New York. Prior to these roles, Dr. Malievskaia worked in clinical, academic and public health from 1999 until co-founding COMPASS. Dr. Malievskaia received her Doctor of Medicine from St. Petersburg Medical Academy. We believe that Dr. Malievskaia is qualified to serve on our Board because of her clinical practice, executive experience and public health academic background. Linda McGoldrick has served as a director of our company since September 2020. In 1985, Ms. McGoldrick founded, and currently serves as Chair and Chief Executive Officer of, Financial Health Associates International, a strategic consulting company specializing in healthcare and life sciences. From April 2019 through December 2019, Ms. McGoldrick served as President and interim Chief Executive Officer of Zillion, Inc., a health, technology and condition management company. Over her professional career, she has served in a number of leadership roles, including senior vice president and National Development director for the Healthcare and Life Sciences Industry Practices at Marsh-MMC Companies, international operations and marketing director of Veos plc, a European medical devices company, and managing director Europe for Kaiser Permanente International. In 2018, Ms. McGoldrick was appointed by the Governor of Massachusetts to serve on the state’s Health Information Technology Commission. Ms. McGoldrick has served as a director of numerous publicly traded and private held companies and non-profit organizations in the United States, United Kingdom and Europe and currently serves on the faculty of the National Association of Corporate Directors. Ms. McGoldrick previously served on the board of directors of Avadim Health, Inc. Ms. McGoldrick received her bachelor of arts in sociology from Ohio Wesleyan University and master of social work from the University of Pennsylvania and master of business administration in management from the Wharton School, University of Pennsylvania. We believe that Ms. McGoldrick is qualified to serve on our Board because of her extensive experience as a director, global business strategy leader and policy expert for U.S. and European companies and organizations.
Wayne J Riley, M.D., MPH, M.B.A. has served as a member of our Board since March 2021. Dr. Riley serves as the President of the State University of New York (SUNY) Downstate Health Sciences University, Brooklyn, NY, USA where he holds tenured professorships in internal medicine, and health policy and management and has served since January 2017. Prior to this, Dr. Riley served as a clinical professor of medicine and adjunct professor of health policy at Vanderbilt University from July 2007 until June 2017, and as President and Chief Executive Officer of Meharry Medical College from January 2007 until July 2013. In addition, Dr. Riley currently serves as an elected member of the U.S. National Academy of Medicine, a Commissioner of the U.S. Medicare Payment Advisory Commission, Chair of the Board of the New York Academy of Medicine, President of the Society of Medical Administrators, an organization of leading North American physician executives, and a President Emeritus of the American College of Physicians. Dr. Riley is also a member of the board of directors of HCA Healthcare Inc,Inc. (NYSE: HCA), where he serves as Chair of the Patient Safety & Quality Committee and a member of the Audit & Compliance and Nominating & Corporate Governance Committees and a member of the board of directors of HeartFlow, Inc. He also previously served as a Director of Vertex Pharmaceuticals Inc. (Nasdaq: VRTX). Dr. Riley holds a BA from Yale University, Masters in Public Health from the Tulane University School of Public Health and Tropical Medicine, M.D. from the Morehouse School of Medicine, and MBA from Rice University. We believe that Dr. Riley is qualified to serve on our Board because of his experience, qualifications, attributes and skills, including his extensive medical and health policy experience.
CORPORATE GOVERNANCE Structure of our Board of Directors Our Articles of Association and Corporate Governance Guidelines gives our Board the flexibility to determine the appropriate leadership structure for the Board, including whether the offices of DirectorsChief Executive Officer and Chair of the Board should be separate or combined and why the Board’ leadership structure is appropriate given the specific characteristics or circumstances of our company and the Board’s assessment of its leadership from time to time. We currently separate the roles of Chief Executive Officer and Chair of the Board . Separating the duties of the Chair from the duties of the Chief Executive Officer allows our Chief Executive Officer to focus on our day-to-day business, while allowing the Chair to lead the Board in its fundamental role of providing advice to and independent oversight of management. Specifically, the Chair presides over meetings of the Board, facilitates communications between management and the Board and assists with other corporate governance matters. We believe that having a non-executive Chair can enhance the effectiveness of the Board as a whole.
Our Board is currently chaired by the Chief Executive Officerour co-founder and a significant shareholder, George Goldsmith. The Company believes that it is advantageous to have a Board Chair with an extensive history with and knowledge of the Company George Goldsmith.(as is the case with our current Board Chair). We have designated David Norton as our lead independent director to help reinforce the independence of our Board of Directors as a whole. As lead independent director, Mr. Norton provides leadership to our Board if circumstances arise in which the roles of Chief Executive Officerco-founder and significant shareholder and Board Chair may be, or may be perceived to be, in conflict, and performs such additional duties as our Board may otherwise determine and delegate, including serving as principal liaison between the Board Chair and our independent directors. The Company believes that combining the positions of Chief Executive Officer and Board Chair helps to ensure that our Board and management act with a common purpose. We believe that combining the positions of Chief Executive Officer and Board Chair provides a single, clear chain of command to execute our business plans. In addition, we believe that a combined Chief Executive Officer/Board Chair is better positioned to facilitate the regular flow of information between management and the Board. The Company also believes that it is advantageous to have a Board Chair with an extensive history with and knowledge of the Company (as is the case with the Company’s Chief Executive Officer).
Independence of our Board of Directors Our Board of Directors has determined that all of our current directors, other than George Goldsmith, our Board Chair, Kabir Nath, our Chief Executive Officer, and Ekaterina Malievskaia, our Chief Innovation Officer, qualify as “independent” directors in accordance with the independence requirements under the applicable Nasdaq rules as well as applicable rules promulgated by the SEC. Mr. GoldsmithNath and Dr. Malievskaia are not considered independent because they are employees of the Company. Mr. Goldsmith is not considered independent because he served as our chief executive officer during the past three years. Our Board of Directors has made a subjective determination as to each independent director that no relationships exist that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, our Board reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and our management. Mr. Goldsmith is married to Dr. Malievskaia. Additionally, until his resignation effective April 16, 2021, Dr. Maliveskaia’s son worked for us as a Stakeholder Engagement and Operations Associate. There are no other family relationships among any of our directors or executive officers. Our independent directors meet in regularly scheduled executive sessions at which only independent directors are present. All ofThe Audit and Risk Committee, the committees of our BoardCompensation and Leadership Development Committee and the Nominating and Corporate Governance Committee are each comprised entirely of directors determined by the Board of Directors to be independent. Board Oversight of Risk Management and ESG IssuesMatters Our management is primarily responsible for assessing and managing risk while ourand one of the key functions of the Board is responsible for overseeing management’s executioninformed oversight of our risk management process. In carrying out its responsibilities. Ourrisk oversight responsibilities, the Board reviews the long and short-term operational and external risks facing the Company through its participation in long-range strategic planning, and ongoing reports from various Board standing committees that address risks inherent in their respective areas of Directorsoversight. On an ongoing basis, the Board and management identify key long and short-term risks, assess their potential impact and likelihood, and, where appropriate, implement operational measures and controls or purchase insurance coverage in order to help ensure adequate risk mitigation. The Board is supported by its committees in fulfillment of this responsibility.its risk oversight responsibilities. For example, our Audit and Risk Committee focuses on our overall financial risk by evaluating our internal controls and disclosure policies as well as ensuring the integrity of our financial statements and periodic reports. The Audit and Risk Committee also monitors compliance with legal and regulatory requirements. At its meetings, our Audit and Risk Committee receives reports concerning material risks and significant updates on compliance and risk management matters from our Chief Legal Officer and other executive officers, as necessary. Our Compensation and Leadership Development Committee (the “Compensation Committee”) strives to create incentives that encourage an appropriate level of risk-taking consistent with our business strategy. Finally, our Nominating and Corporate Governance Committee ensures that our governance policies and procedures are appropriate in light of the risks we face. Most of the Environmental, Social, and Governance (“ESG”) matters prioritized as part of our ESG framework are embedded in the Company’s strategic and operational plans, and are therefore overseen by the Board as part of regular updates and discussions that the Board receives and holds on these plans. The Board also specifically discusses our ESG framework at least once a year. Furthermore, Board oversight of specific ESG matters occurs through the committees of the Board: our Nominating and Corporate Governance Committee oversees our corporate governance guidelines; our Audit and Risk Committee oversees our risk and compliance framework, our code of conduct and ethics, as well as data privacy and security matters; and our Compensation and Leadership Development Committee oversees talent and employee-related matters, and receives regular updates from our Chief People Officer onhuman capital management strategies, including our employee well-being program and equity, diversity and inclusion initiatives.
Board Evaluation Process Our Board of Directors is committed to assessing its own performance as a board in order to identify its strengths as well as areas in which it may improve its performance. The self-evaluationboard evaluation process, which is overseen by the Nominating and Corporate Governance Committee, involves the completion of annual written questionnaires by the directors review and discussioninterviews with members of the Board, key members of management and key advisors to the Board. The results of the evaluationsboard evaluation process are reviewed and discussed, including considerations of action plans to address any issues, by both the Nominating and Corporate Governance Committee and our Board, and consideration of action plans to address any issues.Board. Committees of Our Board of Directors Our Board of Directors has three standing committees: the Audit and Risk Committee, the Compensation and Leadership Development Committee, and the Nominating and Corporate Governance Committee. We have also establishedhave an Innovation and Research Committee, which met three times last year, but this committeemeets on an ad hoc, as needed basis and does not yet have a charter in place that governs its purpose and duties. The Innovation and Research Committee meets to oversee the development and progress of programs to research and develop drug and technology assets that aid our mission to accelerate patient access to evidence-based innovation in mental health. The charters for our Audit and Risk Committee, Compensation and Leadership Development Committee and Nominating and Corporate Governance Committee can be found on the “Corporate Governance–Documents and Charters” section of our investor relations website at ir.compasspathways.com. Each such committee reviews these charters at least annually. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Audit and Risk Committee | | Compensation and Leadership Development Committee | | Nominating and
Corporate
Governance | Innovation and Research Committee | | | George Goldsmith | | | | | | | | | | David Norton | | | | X | | | | | Jason CammKabir Nath | | | | X | | X | X | | | Annalisa Jenkins, MBBS | | X | | Chair | | | X | | | Thomas Lönngren | | | | | | Chair | | | | Ekaterina Malievskaia | | | | | | | X | | | Linda McGoldrick | | Chair | | | | X | | | | Robert McQuade | | X | | | | | Chair | | | Wayne Riley | | | | X | | X | | |
Audit and Risk Committee Our Audit and Risk Committee currently consists of Annalisa Jenkins, Linda McGoldrick and Robert McQuade and assists our Board in overseeing our accounting and financial reporting processes. Ms. McGoldrick serves as chair of our Audit and Risk Committee. Our Audit and Risk Committee consists exclusively of members of our Board who are financially literate, and Dr. Jenkins and Ms. McGoldrick are each considered an “audit committee financial expert” as defined by applicable SEC rules and has the requisite financial sophistication as defined under the applicable Nasdaq rules and regulations. Our Board of Directors has determined that all of the members of our Audit and Risk Committee satisfy the “independence” requirements set forth in Rule 10A-3 under the Exchange Act. Our Audit and Risk Committee met fivesix times in 20212022 and oversees and reviews our internal controls, accounting policies and financial reporting, and provides a forum through which our independent registered public accounting firm reports. Our Audit and Risk Committee meets regularly with our independent registered public accounting firm without management present. Our Audit and Risk Committee operates under a written charter that satisfies the applicable standards of the SEC and Nasdaq. Our Audit and Risk Committee’s responsibilities include: •appointing, approving the compensation of, and assessing the performance and independence of our independent registered public accounting firm; •approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm;
•reviewing the audit plan with the independent registered public accounting firm and members of management responsible for preparing our financial statements and discussing with management and the
independent registered public accounting firm our annual and quarterly financial statements and related disclosures as well as critical accounting policies and practices used by us; •discussing with the independent registered public accounting firm its independence and obtaining required written communications required by the PCAOB; •exercising general oversight over our information security and technology risks, including our information security and related risk management programs; and •monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements and reviewing all related party transactions for potential conflict of interest situations and approving all such transactions. Compensation and Leadership Development Committee Our Compensation and Leadership Development Committee currently consists of Jason Camm, Annalisa Jenkins, David Norton and Wayne Riley. Dr. Jenkins serves as chair of our Compensation and Leadership Development Committee. Under SEC and Nasdaq rules, there are heightened independence standards for members of our Compensation and Leadership Development Committee, including a prohibition against the receipt of any compensation from us other than standard board member fees. Each member of our Compensation and Leadership Development Committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act. Our Board of Directors has determined that each member of our Compensation and Leadership Development Committee is “independent” as defined under the applicable Nasdaq rules. Our Compensation and Leadership Development Committee held fivesix meetings during 2021.2022. Our Compensation and Leadership Development Committee’s responsibilities include: •reviewing policies relevant to the consideration and determination of compensation of our directors and executive officers; •overseeing and administering our employee share option scheme or equity incentive plans in operation from time to time, including reviewing and approving grants and awards; •reviewing and approving certain corporate goals and objectives relating to the compensation of our chief executive officer, evaluating the performance of our chief executive officer in light of such corporate goals and objectives, and recommending the compensation of our chief executive officer to the Board based on such evaluation; •reviewing and recommending to our Board the compensation of our other executive officers and our directors; •overseeing our strategies, programs and initiatives related to equity, diversity and inclusion, gender pay parity and creating a positive working environment; •reviewing and overseeing our human capital management strategies, policies and practices, including employee health, safety and well-being, workforce belong, inclusion and diversity efforts and overall employee engagement and retention; and •reviewing and approving the retention of consulting firm or outside advisor to assist in the evaluation of compensation matters. The Compensation and Leadership Development Committee has the authority to delegate certain responsibilities to one or more subcommittees consisting of one or more of its members, but has not delegated such authority to a subcommittee. Compensation Committee Interlocks and Insider Participation
None of the members of our Compensation Committee, which include Dr. Jenkins, Mr. Camm, Mr. Norton and Dr. Riley, has at any time during the prior year been one of our officers or employees or was formerly an officer. None of our executive officers currently serves, or in the past fiscal year has served, as a member of our Compensation Committee or the compensation committee of any entity that has one or more executive officers serving on our Board.
Our Board of Directors has delegated to the Compensation and Leadership Development Committee the authority to approve any proposed compensation for our executive officers other than the Chief Executive Officer whose compensation is recommended to the Board for approval based on the Compensation and Leadership Development Committee’s evaluation of his performance in relation to our goals and objectives. Non-executive director compensation is recommended by our Compensation and Leadership Development Committee to the Board of Directors for approval. Our Chief Executive Officer may participate in general discussions with our Compensation and Leadership Development
Committee and Board of Directors about these compensation matters, but he does not participate in discussions during which his individual compensation is being considered and approved. In 2021,2022, the Compensation and Leadership Development Committee retained the services of Aon’s Human Capital Solutions practice, a division of Aon plc (“Aon”), an independent compensation consultant, to assist the Compensation and Leadership Development Committee with respect to compensation actions in 20212022 with the goal of ensuring that our compensation arrangements for our Chief Executive Officer, our other senior executive officers and our non-executive directors were competitive.
Nominating and Corporate Governance Committee Our Nominating and Corporate Governance Committee currently consists of Thomas Lönngren, Jason Camm, Linda McGoldrick and Wayne Riley. Mr. Lönngren serves as chair of our nominatingNominating and corporate governanceCorporate Governance committee. Our Board of Directors has determined that each member of our Nominating and Corporate Governance Committee is “independent” as defined under the applicable Nasdaq rules. Our Nominating and Corporate Governance Committee held three meetings during 2021.2022. Our nominatingNominating and corporate governanceCorporate Governance committee’s responsibilities include: •developing and recommending to the Board criteria for board and committee membership; •establishing procedures for identifying and evaluating board of director candidates, including nominees recommended by shareholders, including procedures by which shareholders may recommend director candidates; •identifying individuals qualified to become members of the Board; •evaluating the suitability of individual prospective director candidates, including considering the benefits of diversity, including diversity of thought, educational and professional background, gender, race, age, sexual orientation or ethnic and national background; •recommending to our Board the persons to be nominated for election as directors and to each of our Board’s committees; •developing and recommending to our Board a set of corporate governance guidelines, and regularly reviewing policies and guidelines adopted by the Board or its committees; and •overseeing the evaluation of our Board and its committees. Our Board is responsible for filling vacancies on our Board and for nominating candidates for election by our shareholders each year in the class of directors whose term expires at the relevant annual general meeting. The Board delegates the selection and nomination process to the Nominating and Corporate Governance Committee, with the expectation that other members of the Board, and of management, will be requested to take part in the process as appropriate. The Nominating and Corporate Governance Committee considers candidates for Board of Director membership by soliciting recommendations from any of the following sources: independent directors, the Chief Executive Officer, other executive officers, third-party search firms, or any other source it deems appropriate. Additionally, the Nominating and Corporate Governance Committee will review and evaluate the qualifications of any such proposed candidate, and conduct inquiries it deems appropriate. Any shareholder who wishes to recommend a candidate for consideration by the committee as a nominee for director should follow the procedures described later in this Proxy Statement under the heading “Additional Information—Shareholder Proposals.” Our Board of Directors is responsible for filling vacancies on our Board and for nominating candidates for election by our shareholders each year in the class of directors whose term expires at the relevant annual general meeting. The Board of Directors delegates the selection and nomination process to the Nominating and Corporate Governance Committee, with the expectation that other members of the Board of Directors, and of management, will be requested to take part in the process as appropriate.
Director Nomination Process The process followed by our Nominating and Corporate Governance Committee to identify and evaluate director candidates includes requests to board members and others for recommendations, including through the use of search firms or other advisors, meetings from time to time to evaluate biographical information and background material relating to potential candidates, and interviews of selected candidates by management, recruiters, members of the committee and our Board. Once candidates have been identified, the Nominating and Corporate Governance Committee confirms that the candidates meet all of the minimum qualifications and other criteria for director nominees approved by the Board of Directors and all facts and circumstances that it deems appropriate or advisable. The Nominating and Corporate Governance
Committee may gather information about the candidates that relate to their skills, their depth and breadth of business experience or other background characteristics, their independence, the needs of the Board and any other item of information that the Nominating and Corporate Governance Committee deems to be appropriate in the evaluation process. The Nominating and Corporate Governance Committee then meets as a group to discuss and evaluate the qualities and skills of each candidate, both on an individual basis and taking into account the overall composition and needs of our Board. Based on the results of the evaluation process, the Nominating and Corporate Governance Committee recommends candidates for the Board of Directors’Board’s approval to fill a vacancy or as director nominees for election to the Board of Directors by our shareholders each year in the class of directors whose term expires at the relevant annual general meeting. The qualifications, qualities and skills that our Nominating and Corporate Governance Committee believes must be met by a committee-recommended nominee for a position on our Board are as follows:
•The nominee shall have experience at a strategic or policymaking level in a business, government, non-profit or academic organization of high standing. •The nominee shall be accomplished in his or her respective field, with superior credentials and recognition. •The nominee shall be well regarded in the community and shall have a long-term reputation for the high ethical and moral standards. •The nominee shall have sufficient time and availability to devote to the affairs of the Company, particularly in light of the number of boards of directors on which such nominee may serve. •To the extent such nominee serves or has previously served on other boards, the nominee shall have a demonstrated history of actively contributing at board meetings. WeWhile we have no formal policy regarding board diversity.diversity, our Corporate Governance Guidelines and Nominating and Corporate Governance Committee charter provide that when evaluating proposed director candidates, the Nominating and Corporate Governance Committee (or any search firm acting under the direction of the Nominating and Corporate Governance Committee) shall consider the benefits of diversity, including diversity of thought, educational and professional background, gender, race, age, sexual orientation or ethnic and national background. Our priority in selection of board members is identification of members who will further the interests of our shareholders through consideration of a number of facts and circumstances, including among other things, the skills of the prospective director candidate, his or her depth and breadth of business experience or other background characteristics, his or her independence and the needs of the Board of Directors.Board.
The table below provides certain highlights of the composition of our Board members and nominees as of April 15, 2022.4, 2023. Each of the categories listed in the below table has the meaning as it is used in Nasdaq Rule 5605(f).
| | | | | | | | | | | | | | | | Board Diversity Matrix (As of April 15, 2022) | | Total Number of Directors | 9 | | Female | Male | Non‐Binary | Did Not Disclose Gender | | Part I: Gender Identity | | | Directors | 3 | 6 | | | | Part II: Demographic Background | | | | African American or Black | | 1 | | | | Alaskan Native or Native American | | | | | | Asian | | | | | | Hispanic or Latinx | | | | | | Native Hawaiian or Pacific Islander | | | | | | White | 3 | 5 | | | | Two or More Races or Ethnicities | | | | | | LGBTQ+ | | | Did Not Disclose Demographic Background | |
| | | | | | | | | | | | | | | | Board Diversity Matrix (As of April 4, 2023) | | Total Number of Directors | 9 | | Female | Male | Non‐Binary | Did Not Disclose Gender | | Part I: Gender Identity | | | Directors | 3 | 6 | | | | Part II: Demographic Background | | | | African American or Black | | 1 | | | | Alaskan Native or Native American | | | | | | Asian | | 1 | | | | Hispanic or Latinx | | | | | | Native Hawaiian or Pacific Islander | | | | | | White | 3 | 5 | | | | Two or More Races or Ethnicities | | 1 | | | | LGBTQ+ | | | Did Not Disclose Demographic Background | |
In addition, one director has identified as a military veteran. Shareholder Recommendations and Nominees Our Nominating and Corporate Governance Committee considers both recommendations and nominations for candidates to the Board from shareholders so long as such recommendations and nominations comply with our Articles of Association, Nominating and Corporate Governance Charter and applicable laws, including the rules and regulations of the SEC. Shareholders may recommend director nominees for consideration by the Nominating and Corporate Governance Committee by writing to our Company Secretary at the address below not less than 120 days prior to the date on which the Company’s proxy statement is released to shareholders in connection with the previous year’s annual meeting. Shareholder recommendations for director candidates must include the nominee’s name and address of record, a representation that the shareholder is a holder of the Company’s securities, as well as the nominee’s detailed biographical data and qualifications for board membership, information regarding any arrangements or understandings between the shareholder and the recommended candidate, the consent of the
proposed nominee to be named in the proxy statement and serve as a director if elected and any other information regarding the nominee that is required to be included in a proxy statement. Following verification of the shareholder status of the person submitting the recommendation, all properly submitted recommendations will be promptly brought to the attention of the Nominating and Corporate Governance Committee. Shareholders who desire to nominate persons directly for election to the Board at an annual general meeting of shareholders must meet the deadlines and other requirements set forth under “Additional Information —Shareholder Proposals.” Any vacancies on the Board of Directors occurring between our annual general meetings of shareholders may be filled by persons selected by a majority of the directors then in office, in which case any director so elected will serve until the next annual general meeting of shareholders when such director will offer himself/herself for re-election, or by persons elected by an ordinary resolution of the shareholders of the Company. You may write to the Nominating and Corporate Governance Committee at: c/o Ben Harber Company Secretary COMPASS Pathways plc 3rd Floor 1 Ashley Road, Altrincham Cheshire WA14 2DT United Kingdom Code of Business Conduct and Ethics
We have adopted a Code of Business Conduct and Ethics applicable to all of our directors, officers, employees and certain designated agents. The Code of Business Conduct and Ethics is available on the “Corporate Governance –Documents and Charters” section of our investor relations website at ir.compasspathways.com. We expect that any amendments to this code or any waivers of its requirements will be disclosed on our website. Shareholder Communication with the Board of Directors Our Board of Directors has implemented a process by which our shareholders or any interested parties may communicate with our Board as a whole or with individual members of our Board. Communications directed to our Board as a whole should be addressed to COMPASS Pathways plc 3rd Floor, 1 Ashley Road, Altrincham Cheshire WA14 2DT, United Kingdom Attn: Chair of the Board, of Directors, and communications directed to individual directors, including our Lead Independent Director, should be addressed to the attention of the individual director at the same address. Such communications may be made on an anonymous or confidential basis. All such communications received by the Company shall be delivered initially to the Company’s General Counsel, who shall review and maintain a log of all such communications. Directors may at any time review this log and request copies of any shareholder communication. Communications received will be promptly forwarded to the specified addressees thereof at the Company’s discretion. In general, communications relating to board and chief executive officer succession planning, corporate governance matters, executive compensation matters, general board oversight matters and long-term corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances, and matters as to which we tend to receive repetitive or duplicative communications. Any interested party with concerns about our company may report such concerns to the Board of Directors or the chairman of our Board and Nominating and Corporate Governance Committee by following the procedures described above. A copy of any such written communication may also be forwarded to our legal counsel and a copy of such communication may be retained for a reasonable period of time. The director may discuss the matter with our legal counsel, with independent advisors, with non-management directors, or with our management, or may take other action or no action as the director determines in good faith, using reasonable judgment, and applying his or her own discretion. Communications may be forwarded to other directors if they relate to important substantive matters and include suggestions or comments that may be important for other directors to know. The Audit and Risk Committee oversees the procedures for the receipt, retention, and treatment of complaints received by us regarding accounting, internal accounting controls or audit matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting, internal accounting controls or auditing matters. Any shareholder communications that include concerns or complaints regarding accounting, internal controls or auditing matters or potential violations of the federal securities laws or the Foreign Corrupt Practices Act will be handled in accordance with procedures adopted by the Audit and Risk Committee. We have also established a toll-free telephone number for the reporting of such activity, which is +1 877 306 1965 or +44 (0) 800 032 5911.
DIRECTOR COMPENSATION Under our Directors’ Remuneration Policy for Non-Executive Directors (“Director Compensation Policy”), the Board has the discretion to pay cash and equity fees to our non-executive directors for their Board and committee service. Our compensation arrangements for non-executive directors during 2021,2022, as set forth in our Director Compensation Policy, was comprised of an award of a fixed number of share options plus cash payment. Our Director Compensation Policy in 20212022 provided that each non-executive director will receive the following annual cash retainers for service on our Board: (a) £30,000 ($41,270)37,114) for each member, (b) £15,000 ($20,635)18,557) for the lead independent director, (increased from £10,000 from September 14, 2021), (c) £12,000 ($16,508)14,846) for the chair of the Audit and Risk Committee, (d) £8,000 ($11,005)9,897) for the chair of each of the Compensation and Leadership Development Committee and Innovation and Research Committee Chair, (e) £7,000 ($9,630) for the8,660) chair of the Nominating and Corporate Governance Committee, (increased from £6,000 from September 14, 2021), (f) £6,000 ($8,254)7,423) for each member of the Audit and Risk Committee, (g) £4,000 ($5,503)4,949) for each member of the Compensation and Leadership Development Committee, (h) £3,500 ($4,815)4,330) for each member of the Nominating and Corporate Governance Committee (increased from £3,000 from September 14, 2021) and (i) £4,000 ($5,503)4,949) for each member of the Innovation and Research Committee. Cash fees are paid to directors in GBP. All amounts have been converted from GBP to USD using the 20212022 average FX rate (£1:$1.3757)1.2371). Fees are reviewed on a periodic basis against those in similar sized companies to ensure they remain competitive and adequately reflect the time commitments and scope of the role. Supplemental fees, in addition to the Board member fees, are paid to recognize the additional time commitments and responsibilities of roles on our committees or the additional commitment of our independent director. Directors may receive limited travel or hospitality related benefits in connection with their duties. In addition to cash compensation, each non-executive director is eligible to receive share options under our equity incentive plans. We have historically awarded share options to certain non-executive directors in an amount determined at the discretion of the Board or Compensation and Leadership Development Committee. The value of all equity awards and cash compensation to any non-executive director in any calendar year for services as a non-executive director shall not exceed £750,000. We do not have a formal share ownership guideline policy for non-executive directors.
During 2021,2022, our Director Compensation Policy provided that each new non-executive director elected to our board of directorsBoard was granted an initial one-time equity award of options to purchase 24,00034,000 of our ADS on the date of such director’s initial election or appointment to the boardBoard. On June 16, 2022, the date of directors. In October 2021,our 2022 AGM, each ongoing non-executive director that continued to serve on the board (excluding any non-executive directors appointed in that year) was granted an option to purchase 12,00017,000 of our ADS, except for Mr. Riley who received an option to purchase 21,250 of our ADS. For boththe initial andgrants, options vest in 36 equal monthly installments, subject to continued service on the Board. For the annual grants, options vest 25% onin full upon the earlier to occur of the first anniversary of the date of grant date, with the remainder vesting in 36 equal monthly installments thereafter.
Going forward, annual awards to the non-executive directors will be made onor the date of the next Annual Meeting, subject to continued service on the Board.
Beginning June 2023, our revised Director Compensation Policy will provide for the payment of cash fees in U.S. dollars for all non-executive directors, other than the Board Chair, and to increase the option awards for our non-executive directors. Under the revised Director Compensation Policy, each non-executive director will receive the following cash retainers for service on our Board: (a) £80,000 for our Board Chair, (b) $40,000 for each member, (c) an additional $20,000 for our lead independent director, (d) $16,000 for the chair of the Audit and Risk Committee, (e) $12,000 for the chair of each of the Compensation and Leadership Development Committee and Innovation and Research Committee, (f) $10,000 for the chair of our Nominating and Corporate Governance Committee, (g) $8,000 for each member of our Audit and Risk Committee, (h) $6,000 for each member of the Compensation and Leadership Development Committee and the Innovation and Research Committee, and (i) $5,000 for each member of our Nominating and Corporate Governance Committee. The initial equity award will be increased to 52,000 options and the annual general meeting of shareholders, with the grant guidelines amended, as appropriate, based on market researchequity awards will be increased to 39,000 options for our Board Chair and advice from its compensation consultant.26,000 options for our other non-executive directors. The table below shows the compensation paid to our non-executive directors during the year ended December 31, 2021.2022. Mr. Goldsmith, Mr. Nath and Dr. Malievskaia did not receive compensation for service on the Board and the compensation paid to Mr. Goldsmith, Mr. Nash and Dr. Malievskaia as employees of the Company are set forth under the heading “Named Executive Officer Compensation—Summary Compensation Table” below. As a U.K.-incorporated company, we have received shareholder approval at our AGM in 20212022 for our U.K. statutory directors’ remuneration report, which includes a directors’ remuneration policy for our executive and non-executive directors.
| | | | | | | | | | | | | | | | | | | | | Fees | | | | | | | | | | | Earned or | | | | | | | | | | | Paid in | | | Option | | | | | | | | Cash | | | Awards | | | | | Total | | Name | | ($) | | | ($) (1) (2) | | | | | ($) | Jason Camm (3) | | — | | | — | | | | | — | Annalisa Jenkins (4) | | 66,032 | | | 213,201 | | | | | 279,233 | | Thomas Lönngren | | 49,535 | | | 213,201 | | | | | 262,736 | | Linda McGoldrick | | 62,077 | | | 213,201 | | | | | 275,278 | | Robert McQuade | | 60,529 | | | 213,201 | | | | | 273,731 | David Norton (4) | | 62,249 | | | 213,201 | | | | | 275,450 | Wayne Riley (5) | | 38,531 | | | 513,823 | | | | | 552,354 | Florian Brand (6) | | 13,119 | | | 99,374 | | | | | 112,493 |
| | | | | | | | | | | | | | | | | Fees | | | | | | | Earned or | | | | | | | Paid in | | Option | | | | | Cash | | Awards | | Total | | Name | | ($) | | ($) (1) (2) | | ($) | | David Norton (4) | | 60,620 | | 112,479 | | 173,099 | | Jason Camm (3) | | — | | — | | — | | Annalisa Jenkins (4) | | 59,382 | | 112,479 | | 171,861 | | Thomas Lönngren | | 45,692 | | 112,479 | | 158,171 | | Robert McQuade | | 54,434 | | 112,479 | | 166,913 | | Linda McGoldrick | | 56,290 | | 112,479 | | 168,769 | | Wayne Riley(5) | | 46,393 | | 140,599 | | 186,992 |
(1) The amount reported represents the aggregate grant date fair value of share options awarded to our non-employee directors during the 20212022 fiscal year, calculated in accordance with FASB, ASC Topic 718. Such grant date fair value does not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value of the share option reported in this column are set forth in Note 11 in our annual report on Form 10-K filed with the SEC on February 24, 2022.28, 2023. The amount reported in this column reflects the accounting cost for these share option awards and does not correspond to the actual economic value that may be received by the directors upon the exercise of the share options or any sale of the shares. (2) At December 31, 2021,2022, the Directors owned the following number of outstanding and unexercised share options: Annalisa Jenkins (132,474)(149,475), Thomas Lönngren (72,095)(89,095), Linda McGoldrick (33,584)(50,584) Robert McQuade (33,584)(50,584), David Norton (147,404),(164,404) and Wayne Riley (24,000) and Florian Brand (5,396)(45,250). Jason Camm had no options outstanding and unexercised on December 31, 2021.2022. (3) On February 1, 2021, Mr. Camm permanently waived any and all compensation which he was entitled to receive during the year ended December 31, 2021.2022. Mr. Camm's service on the board ended on June 16, 2022, the date of the 2022 AGM. (4) At December 31, 2021,2022, Annalisa Jenkins held 16,32110,386 unvested restricted share units, or RSUs, and David Norton held 16,32110,386 unvested RSUs. At December 31, 20212022 no other Non-Executive Director held RSUs. (5) WayneMr. Riley was appointed as Director, effectivejoined the Board in March 2021 and received his initial equity award. As he did not receive an annual equity award at our 2021 AGM, his 2022 annual equity award included an additional number of shares covering the three- month period from March 31, 2021.2022 until June 2022 . (6) On May 14, 2021, Florian Brand resigned from his position as a director.
EXECUTIVE OFFICERS OF THE COMPANY Below is a list of our executive officers and their positions and ages as of the date of April 19, 2022.4, 2023. George Goldsmith and Ekaterina Malievskaia are married and serve on our Board. There is no arrangement or understanding between any executive officer and any other person pursuant to which the executive officer was selected. | | | | | | | | | | | | | | | | | Name | | Age | | Position | George GoldsmithKabir Nath | | 6658 | | Chief Executive Officer, Chair of our BoardDirector | | Michael Falvey | | 6364 | | Chief Financial Officer | | Guy Goodwin | | 7475 | | Chief Medical Officer | | Ekaterina Malievskaia | | 5556 | | Chief Innovation Officer, Director | | Matthew Owens | | 4445 | | General Counsel and Chief Legal Officer |
For biographical information regarding Mr. GoldsmithNath and Dr. Malievskaia, see the section titled “Board of Directors and Corporate Governance.” Michael Falvey has served as our Chief Financial Officer since January 2022. Mr. Falvey was the Chief Financial Officer of Karyopharm Therapeutics between September 2017 and January 2019. Prior to Karyopharm Therapeutics, Mr. Falvey served as Chief Financial Officer at several other high-growth companies including Seven Bridges Genomics from August 2016 to June 2017 and Analysis Group from July 2010 to April 2016. Prior to joining Analysis Group, Mr. Falvey served as Chief Financial Officer of Ahura Scientific and Aspect Medical Systems, and as Vice-President, Finance, at Millennium Pharmaceuticals Inc. In addition to his healthcare experience, Mr. Falvey held financial management positions with Fidelity Investments, Digital Equipment Corporation and General Electric. Mr. Falvey earned a Master of Science in Management from the Sloan School of Management at the Massachusetts Institute of Technology and a Bachelor of Science from Georgetown University’s School of Foreign Service. Guy Goodwin has served as our Chief Medical Officer since August 2021. Dr. Goodwin currently serves as Emeritus Professor of Psychiatry at The University of Oxford, where he has been a professor of psychiatry since October 1996. Additionally, Dr. Goodwin served as Medical Director at P1vital, where he worked between April 2018 and July 2021. Dr. Goodwin previously served as WA Handley Chair of Psychiatry and Head of the University of Oxford’s Department of Psychiatry. Dr. Goodwin is a Fellow of the American College of Neuropsychopharmacology, and former President of the British Association for Psychopharmacology and of the European College of Neuropsychopharmacology. Dr. Goodwin received his BA, DPhil, BM, and BCh from the University of Oxford. Matthew Owens has served as our General Counsel and Chief Legal Officer since February 2022. Prior to joining the Company, Mr. Owens served as Global Head Legal, Digital at Novartis International AG, beginning in January 2018. He has served in various positions with Novartis since 2010, also serving as Senior Legal Counsel, and as Head Legal, Strategic Partnerships and Digital. Prior to Novartis, he was Senior Counsel at Solvay Pharmaceuticals, and Corporate Counsel at Mettler-Toledo. He holds a Bachelor of Arts (Pre-Law & Political Science, History & Criminology) from Capital University, Columbus, Ohio, and a Juris Doctorate from Capital University Law School where he was a Presidential Scholar. He ispreviously was a lecturer at the University of Zurich Law School’s Europa Institute.
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS This Executive Compensation Discussion and Analysis (“CD&A”)section describes our executive compensation program and the 20212022 compensation awarded to, earned by, or paid to each individual who served as our principal executive officer for the year ended December 31, 2022, or fiscal year 2022, and our next two most highly compensated executive officers in respect of their service to our company for fiscal year 2022. We refer to these individuals as our named executive officers (“NEOs”).officers. This CD&AExecutive Compensation section should be read with the compensation tables and related disclosures for our NEOs.named executive officers. Our NEOsnamed executive officers for 2021*2022 were as follows: •George Goldsmith, our Chairman and former Chief Executive Officer; •Guy Goodwin,Kabir Nath, our Chief MedicalExecutive Officer (joined August 2021);and a Director; •Ekaterina Malievskaia, our Chief Innovation Officer; •Piers Morgan, our former Chief Financial Officer;Information Officer and a Director; and
•Nate Poulsen,Matthew Owens, our former General Counsel & Chief Legal Officer.Officer and General Counsel. *Nate Poulsen ceased to be an executive officer in October 2021 and left the organization in December 2021. Piers Morgan ceased to be an executive officer upon his departure on December 31, 2021.
This CD&AExecutive Compensation section describes the material elements of our executive compensation program during 2021.2022. It also provides an overview of our executive compensation philosophy and objectives. Finally, it discusses how the Compensation and Leadership Development Committee of our Board of Directors arrived at the specific compensation decisions for our executive officers, including our NEOs,named executive officers, for 2021,2022, including the key factors that our Compensation and Leadership Development Committee considered in determining their compensation. EXECUTIVE SUMMARY Business Overview We are a clinical-stage, mental health care company dedicated to accelerating patient access to evidence-based innovation in mental health. Our initial focus is on treatment-resistant depression, or TRD, a subset of major depressive disorder, or MDD, comprising patients who are inadequately served by the current treatment paradigm. In 2021, we completed a2022, the results from our large-scale randomized, controlled, double-blind Phase IIb2b clinical trial of our COMP360 psilocybin therapy in 233 patients suffering with TRD in 22 sites in 10 countries in North America and Europe. This is the largest psilocybin trial completed to date. We completed our IPO in September 2020. From that time through December 31, 2021, we were a “foreign private issuer” within the meaning of the Exchange Act, and an “emerging growth company” as definedpublished in the Jumpstart Our Business Startups Act New England Journal of 2012, as amended. Effective January 1, 2022, we no longer meet those designations andMedicine. We commenced our Phase 3 clinical program in TRD, consisting of two pivotal trials, which are instead subject to the reporting and other requirements applicable to U.S. domestic issuers and “large accelerated filers” as defined in Rule 12b-2 of the Exchange Act. As a U.S. domestic issuer and large accelerated filer, we have increased U.S. disclosure obligations regarding executive compensation and are required to file for the first timePhase 3 trials of a proxy statement pursuant to Section 14(a) of Exchange Act, including this CD&A, and hold for the first time a non-binding advisory vote on executive compensation.psilocybin agent.
Corporate Performance Highlights We have made substantial progress during 2021,2022, including: Positive results from ground-breaking phase IIb clinical trial ofAdvanced COMP360 psilocybin therapy for TRD, despite the ongoing challenges posed by the COVID-19 pandemic:TRD:
•Positive results from ground-breaking phase IIbPhase 2b clinical trial in TRD were published in the New England Journal of Medicine •Additional data showing patient improvements beyond reduction of depression symptoms •Positive results from open-label study of 25mg COMP360 psilocybin therapy as adjunct to SSRI antidepressants in treatment-resistant depression
•End-of-phase IIHeld end-of-phase 2 meeting scheduled with the U.S. Food and Drug Administration for late April
•Transitioned to a Phase III3 company and launched a Phase 3 program expected to begin in second halfTRD - the first ever Phase 3 program of 2022psilocybin, a unique achievement
Additional COMP360 development programs: •Launched a Phase II trial2 program in post-traumatic stress disorder launched at Kings College Londonanorexia nervosa, an area of critical unmet need with no FDA-approved pharmaceutical treatments available and high mortality rate for patients suffering from anorexia nervosa •Positive results reported from two investigator-led clinical initiatives in severe TRD, anorexia nervosa, bipolar 2 and major depressive disorder one of which has been published in The New England Journal of Medicine •Additional investigator-initiated studies ongoing in multiple indications Significantly strengthened our balance sheet through:Pipeline development:
•CompletedProgressed development of our artificial intelligence model and authored an article titled Psilocybin Therapy for Treatment Resistant Depression: Prediction of Clinical Outcome by Natural Language Processing, which we have shared openly and submitted to a follow-on offering of American Depositary Shares, raising $154.8m Pipeline development:
•Development of new product candidates through exclusive research project with Dr. Matthias Grill of MiHKAL GmbH, complementing work being done at COMPASS's Discovery Center
Commercial exclusivity and intellectual property:
•10 granted patents issued to-date covering composition, formulation, and method of usejournal for publication
•Several additional filings completedOngoing research on prodrug development has led to a number of potential candidate leads being identified that we plan to continue through further research based development Prepare for successful and scalable commercial launch of COMP360 to ensure broad patient access: •Progress towards issuance by the American Medical Association of new CPT III codes, which are a type of reimbursement code assigned to emerging technologies, services and procedures, to facilitate reimbursement for the psychological support that we anticipate would accompany administration of COMP360, if regulatory approval is obtained •Pioneering collaboration with King’s College London and South London and Maudsley NHS Foundation Trust to create The Center for Mental Health Research and Innovation in the U.K.
•Launched retrospective real world evidence studies
OVERVIEW OF EXECUTIVE COMPENSATION PROGRAM Executive Compensation Philosophy Our executive compensation program is guided by our overarching philosophy of paying for performance. Consistent with this philosophy, we have designed our executive compensation program with the following principles in mind: | | | | | | | | | | | | | | • | | Attract, retain, and motivate high caliber executive talent and focus them on the delivery of the Company’s strategic and business objectives; | | • | | Be competitive against appropriate market benchmarks and have a strong link to performance, providing the ability to earn above-market rewards for strong performance; | | • | | Be simple and understandable, both internally and externally; | | • | | Encourage increased equity ownership to motivate executives in the overall interests of shareholders, the Company, employees and customers; and | | • | | Take due account of good governance and promote the long-term success of the Company. |
Executive Compensation Program Design Our executive compensation program is designed to be reasonable and competitive, and balance our goal of attracting, motivating, rewarding and retaining top-performing senior executives with our goal of aligning their interests with those of our shareholders. The Compensation and Leadership Development Committee annually evaluates our executive compensation program to ensure that it is consistent with our short-term and long-term goals and market competitive practices. Our executive compensation program consists of a mix of compensation elements that balance achievement of our short-term goals with our long-term performance. We provide short-term incentive compensation opportunities in the form of annual cash bonuses, which focus on our achievement of annual goals. We also provide long-term incentive compensation opportunities in the form of equity awards. We provide a combination of share options with an exercise price equal to fair market value, or "market-priced" options and full-value awards which have historically primarily been in(in the form of restricted share units for U.S. taxpayers and options with an exercise price equal to the nominal value of a share, or nominal cost options for non-U.S. taxpayers) and which focus executive attention on our long-term performance. We believe that market-priced share options provide a strong reward for growth in the market price of our shares because their entire value depends on future share price appreciation. In connectionWe believe that restricted share units and nominal cost options are important elements of a competitive compensation program from a retention perspective, as the companies with our IPO in 2020,whom we grantedcompete for talent typically offer a combination of share options to our executive team, which were intended to serve as our long-term equity compensation throughout the duration of 2021. As such, we did not issue any additional equity awards to ongoing executives in 2021 and our 2022 awards will serve as the first regular cycle of annual equity grants as a publicly traded company. We did, however, offer a sign-on option award to our newly appointed Chief Medical Officer in the year.
Our executive compensation program is also designed to incorporate sound practices for compensation governance. Below we summarize such practices.
What We Do: | | | | | | | | | | | ✓ | Maintain an Independent Compensation and Leadership Development Committee. The Compensation and Leadership Development Committee consists solely of independent directors. |
| | | | | | | | | | | ✓ | Retain an Independent Compensation Advisor. The Compensation and Leadership Development Committee engages its own compensation advisor to provide information and analysis related to annual executive compensation decisions, including the 20212022 executive compensation decisions, and other advice on executive compensation independent of management. |
| | | | | | | | | | | ✓ | Review Executive Compensation Annually. The Compensation and Leadership Development Committee annually reviews our compensation strategy, including a review and determination of our compensation peer group used for comparative purposes. |
| | | | | | | | | | | ✓ | Design Compensation At-Risk. Our executive compensation program is designed so that a significant portion of our executive officers’ compensation is “at risk” based on our corporate performance, as well as equity-based, to align the interests of our executive officers and shareholders. |
| | | | | | | | | | | ✓ | Use a Pay-for-Performance Philosophy. The majority of ourOur executive officers’ compensation is directly linked to corporate performanceachievement of company goals and includes a significant long-term equity component, thereby making a substantial portion of each executive officer’s total compensation dependent upon our share price. |
What We Don’t Do: | | | | | | | | | | | ✗ | No Executive Retirement Plans. We do not offer pension arrangements or retirement plans or arrangements to our executive officers that are different from or in addition to those offered to our other employees. |
| | | | | | | | | | ✗ | Limited Perquisites. We provide limited perquisites and other personal benefits to our executive officers.
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| | | | | | | | | | ✗ | No Special Health and Welfare Benefits. Our executive officers participate in our health and welfare benefits programs on the same basis as our other employees.
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| | | | | | | | | | | ✗ | No Post-Employment Tax Payment Reimbursement. We do not provide any tax reimbursement payments (including “gross-ups”) on any change-in-control or severance payments or benefits. |
| | | | | | | | | | ✗ | No Hedging or Pledging. Our Insider Trading Policy prohibits our executive officers, the non-employee members of our Board and certain designated employees from hedging or pledging our securities, or engaging in short sales or trading in standardized options related to our securities. |
“Say-on-Pay” Vote on Executive Compensation In prior years,Annually, at our general meeting of shareholders, we were both a “foreign private issuer” and an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended; therefore, we were not required to hold a non-binding advisory vote on the compensation of our NEOs (a “Say-on-Pay” vote). At this AGM, we will hold our first Say-on-Pay vote. Our Board of Directors and Compensation Committee will consider the result of the Say-on-Pay vote, and the related vote on the frequency of whichregarding the compensation of our named executive officers, is submittedwhich we refer to as say-on-pay. The Compensation and Leadership Development Committee has considered and will continue to consider the outcome of such say-on-pay votes, including the percentage of votes cast in favor and against the say-on-pay proposal, when making future compensation decisions for our named executive officers. The Compensation and Leadership Development Committee also relies on advice from its compensation consultants, its evaluation of Company performance against pre-defined corporate goals, its understanding of the challenges facing the Company and its observations of executive officer performance to determine executive officer compensation.
At our 2022 AGM, the non-binding advisory vote of shareholders supported the compensation of the named executive officers identified in our 2022 proxy statement by 99.7% of the votes cast at the meeting. These votes for a vote (a “and against the say-on-pay proposal, together with available feedback from investors, have been and will continue to be considered by the Compensation and Leadership Development Committee Say-on-Frequency” vote), when making compensation decisions for our executive officers in the future because we value the opinions.
As a U.K.-incorporated company, we have received shareholder approval at our AGM in 2021 for our U.K. statutory directors’ remuneration report,Directors’ Remuneration Policy which includes a directors’ remuneration policy forapplies to our executive and non-executive directors. This binding policy is in effect for three years and covers allowable compensation for twoour current and future executive and non-executive directors. Our Directors' Remuneration Policy applies to three of our NEOs,named executive officers, Mr. Goldsmith, our CEO,current Chairperson and former Chief Executive Officer, Mr. Nath, our current Chief Executive Officer, and Dr. Malievskaia our CIO, bothChief Innovation Officer, each of whom were executive directors of the Company
during 20212022 and will continue to serve on our Board of Directors for 2022. In 2021,2023, subject to re-election of Mr. Goldsmith and Mr. Nath at this annual general meeting of shareholders. In 2022, Mr. Goldsmith, Mr. Nath and Dr. Malievskaia did not receive compensation for their service on our Board. Among other things, our directors’ remuneration policyDirectors’ Remuneration Policy sets a cap on the annual bonus payable to an executive director at 125% of the target bonus level and limits the pension contribution or cash supplement payable by the Company to 3% of salary for the U.K.-based executive directors, in line with the wider workforce.workforce, which generally has a 3% pension contribution, but may be up to 8%. Mr. Nath joined us in 2022 and is eligible to participate in our 401(K) retirement plan on the same terms as our U.S. based employees, including the company match of up to 4% of salary, subject to statutory limitations on contributions. Governance of Executive Compensation Program Role of the Compensation and Leadership Development Committee and the Board of Directors Our Compensation and Leadership Development Committee, which is comprised entirely of independent directors, is responsible for discharging our Board of Directors’Board’s responsibilities relating to compensation of our directors and executives, overseeing our overall compensation structure, policies and programs, and reviewing our processes and procedures for the consideration and determination of director and executive compensation. The Compensation and Leadership Development Committee’s approach to remuneration matters is to enable the Company to attract and retain talent, incentivize long-term value generation, and effectively manage the Company’s cash resources. It is the belief of the Compensation and Leadership Development Committee that this is best achieved through a greater emphasis on variable rather than fixed remuneration, comprised of a mix of base salary and benefits, along with the flexibility to appropriately reward and incentivize with variable pay and long-term incentives. Our Compensation and Leadership Development Committee has the authority to retain, at our expense, one or more third-party compensation consultants to assist the Compensation and Leadership Development Committee in performing its responsibilities. At the beginning of the year, the Compensation and Leadership Development Committee reviews and recommends, in the case of our Executive Chair and our Chief Executive Officer, and approves, in the case of our other named executive officers, the primary elements of compensation—base salary increases, cash bonus targets, and annual equity awards—for our NEOs,awards, as authorized by the Board of Directors pursuant to the Compensation and Leadership Development Committee charter. In addition, the Compensation and Leadership Development Committee may deem it advisable to review and approve subsequent compensation opportunities for our executive officers, including our NEOs.named executive officers. Compensation-Setting Factors When reviewing and approving the amount of each compensation element and the target total compensation opportunity for our executive officers, the Compensation and Leadership Development Committee considers the following factors: the Company’s performance during the year, based on business and corporate goals and priorities established by the Chief Executive Officer (“CEO”) and the Board of Directors; each executive officer’s skills, experience and qualifications relative to other similarly-situated executives at the companies in our compensation peer group; the scope of each executive officer’s role compared to other similarly-situated executives at the companies in our compensation peer group; the performance of each individual executive officer, based on an assessment of their contributions to our overall performance, ability to lead their department and work as part of a team, all of which reflect our values;
compensation parity among our executive officers; the dilutive impact of equity awards;
general economic and market conditions and rate of inflation; changes in the size and complexity of the Company as we transitioned to a Phase 3 clinical development company and prepare to transition from a clinical-stage company to a fully integrated biotechnology company in anticipation of our first product launch; the expectations of institutional shareholders and any specific feedback received from shareholders; the recommendations provided by the CEOChief Executive Officer with respect to the compensation of our executive officers, other executive officers.than our Executive Chair and our Chief Executive Officer. These factors provide the framework for compensation decisions for each of our executive officers, including our NEOs.named executive officers. The Compensation and Leadership Development Committee and the Board, of Directors, as applicable, do not assign relative weights or rankings to these factors, and do not consider any single factor as determinative in the compensation of our executive officers. Rather, the Compensation and Leadership Development Committee and the Board, of Directors, as applicable, rely on their own knowledge and judgment in assessing these factors and making compensation decisions. Our CEO doesDuring the time Mr. Goldsmith served as our Executive Chair and Chief Executive Officer, he did not make recommendations to our Compensation and Leadership Development Committee or participate in the Compensation and Leadership Development Committee’s deliberations
concerning his own compensation nor the compensation of Dr. Malievskaia, our CIO,Chief Innovative Officer, because of their spousal relationship. Our Chief Executive Officer, Mr. Nath does not participate in the Compensation and Leadership Development Committee's deliberations concerning his own compensation. Role of Management In discharging its responsibilities, the Compensation and Leadership Development Committee works with management, including our CEO.Chief Executive Officer. Our management assists the Compensation and Leadership Development Committee by providing information on corporate and individual performance, market compensation data and management’s perspective on compensation matters. In addition, at the beginning of each year, our CEOChief Executive Officer reviews the performance of our other executive officers, including our other NEOs (other than our CIO, as discussed above),named executive officers based on our achievement of our corporate goals and each executive officer’s overall performance during that year. The Compensation and Leadership Development Committee solicits and reviews our CEO’sChief Executive Officer’s recommendations for base salary increases, annual cash bonuses, annual equity awards and any other compensation opportunities for our other executive officers, including our other NEOs (other than our CIO),named executive officers, and considers our CEO’sChief Executive Officer’s recommendations in determining such compensation. As discussed above, while Mr. Goldsmith served as our Chief Executive Officer during 2022, he did not review the performance of our Chief Innovation Officer nor recommend any base salary increases, annual cash bonuses, annual equity awards and any other compensation opportunities for our Chief Innovation Officer. Role of Compensation Consultant The Compensation and Leadership Development Committee engages an external compensation consultant to assist it by providing information, analysis and other advice relating to our executive compensation program. For 2021,2022, the Compensation and Leadership Development Committee engaged Aon as its independent compensation consultant to advise on executive compensation matters including: review and analysis of the compensation for our executive officers, including our NEOs;named executive officers; research, development and review of our compensation peer group; and support on other compensation matters as requested throughout the year.
Aon reports directly to the Compensation and Leadership Development Committee and to the Compensation and Leadership Development Committee chair. Aon also coordinates with our management for data collection and job matching for our executive officers. The Compensation and Leadership Development Committee reviewed its relationship with Aon and considered Aon’s independence in light of all relevant factors, including those set forth in the Exchange Act and in applicable Nasdaq listing rules. The Compensation and Leadership Development Committee concluded that the work performed by Aon and Aon’s senior advisors involved in the engagements did not raise any conflict of interest. In reaching these conclusions, our Compensation and Leadership Development Committee considered the factors set forth in the SEC rules and the applicable Nasdaq rules. Role of Market Data For purposes of comparing our executive compensation against the competitive market, the Compensation and Leadership Development Committee reviews and considers the compensation levels and practices of a group of peer companies. This compensation peer group consists of public biotechnology companies that are similar to us in terms of market capitalization, stage of development and number of employees. As a Nasdaq-listed health care company with operations in the United StatesU.S. and Europe, we operate within a global marketplace for talent. Given that the market for experienced health care executive talent is competitive, particularly in the United States,U.S., the Compensation and Leadership Development Committee references the U.S. market as the leading indicator for remuneration levels and practices. The Committee also considers the general U.K. compensation frameworks when making decisions on executive compensation. The Compensation and Leadership Development Committee reviews our compensation peer group annually and makes adjustments to our peer group if necessary, taking into account changes in both our business and our peer companies’ businesses. The Compensation and Leadership Development Committee also uses market data—from our compensation peer group and from a life sciences cut of the Radford Global Compensation Database—as one factor in evaluating whether the compensation for our executive officers is competitive in the market. The Compensation and Leadership Development Committee and the Board, of Directors, as applicable, also rely on their own knowledge and judgment in evaluating market data and making compensation decisions. To determine the composition of the peer group for 2021, which was established in connection with2022, the IPO in July 2020, the Compensation and Leadership Development Committee considered the following criteria: publicly-traded companies listed in the United States (including both U.S.-headquartered and European-headquartered companies), with a preference towards companies with a recent IPO (i.e., within the past five years); companies in the pre-commercial biotechnology or health care technology sectors, with preference towards mental health care and healthcare technology platform companies, as appropriate;
similar market capitalization—within a range of approximately 0.33x to approximately 3.0x our anticipated market capitalization at IPO;in mid-2021; the stage of development of each company’s development candidates;candidates, with a focus on companies with Phase 2 clinical programs (our stage of development in mid-2021); and similar headcount—within a range of 2530 to 250300 employees based on our then headcount of roughly 5090 full-time employees. This analysis led to the selection of the following peer group which was used to make the relevant compensation assessments for 20212022 for purposes of establishing 20212022 annual base salary, and target bonus and equity awards for our NEOs. We alsonamed executive officers and used thethis peer group market data to determine at-IPO equity awards we made tosupport our NEOs in 2020, which served asnegotiations with our long-term incentive compensation for 2021.new executive officers, our Chief Executive Officer and our Chief Legal Officer and General Counsel, who were hired during 2022. 20212022 Compensation Peer Group
| | | | | | | | | | | | | | | AC Immune SA | CareDx, Inc. | Orchard Therapeutics plc | | Adaptimmune Therapeutics plc | Constellation Pharmaceuticals, Inc. | Prothena Corporation plc | | Applied Molecular Transport | Crinetics Pharmaceuticals, Inc. | PureTech Health | | Arcus Biosciences, Inc. | Intra-Cellular Therapies, Inc. | Replimmune Group, Inc. | | ATAI Life Sciences SA | Karuna Therapeutics, Inc. | Rocket Pharmaceuticals, Inc. | | Autolus Therapeutics plc CareDx, Inc.
Constellation Pharmaceuticals, Inc.
Crinetics Pharmaceuticals, Inc.
| | Fulgent Genetics, Inc.
Livongo Health, Inc.
Magenta Therapeutics, Inc. Merus N.V.
Myovant Sciences Ltd.
NantHealth, Inc.
NextCure, Inc.
| | Orchard Therapeutics plc
Replimmune Group
Rocket Pharmaceuticals, Inc.
Scholar Rock Holding Corporation Syros Pharmaceuticals,
| | Axsome Therapeutics, Inc. | Merus N.V. | Translate Bio, Inc. | | Bicycle Therapeutics plc | Myovant Sciences Ltd. | Y-mAbs Therapeutics, Inc; | Fulcrum Therapeutics, Inc. | | | | |
PRIMARY ELEMENTS OF EXECUTIVE COMPENSATION PROGRAM The primary elements of our executive compensation program are:base salary; short-term incentive compensation in the form of annual cash bonuses; and long-term incentive compensation in the form of annual equity awards. Our executive officers, including our NEOs,named executive officers, are also eligible to participate in our standard employee benefit plans, such as our health and welfare benefits plans, and defined contribution retirement plans on the same basis as our other employees.employees in the U.S. or U.K., as applicable. In addition, as described below, our executive officers, including our NEOs,named executive officers, are entitled to certain change-in-control severance payments and benefits pursuant to their employment agreements, described herein. Base Salary We pay base salaries to our executive officers, including our NEOs,named executive officers, to provide a market competitive fixed remuneration that reflects the responsibilities of the role undertaken, the experience of the individual, and their performance in the role over time. At the time of hire, base salaries are determined for our executive officers, including our NEOs,named executive officers, based on the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above. With the exception of 2021 (as described below), typically,Typically, at the beginning of each year, the Compensation and Leadership Development Committee reviews base salaries for our executive officers, including our NEOs,named executive officers, based on such factors to determine if an increase is appropriate. In addition, base salaries may be adjusted in the event of a promotion or significant change in responsibilities. 20212022 Annual Base Salary
In September 2020, upon completion of our IPO,January 2022, the Compensation and Leadership Development Committee implemented market-basedbase salary adjustments to reflect our status as a newly-public company. As competitiveincreases of 2% for the named executive officers, who were employed at that time, after considering rising inflation rates. Each of Mr. Nath's and Mr. Owen's base salaries were implementeddetermined through negotiations when they were hired. | | | | | | | | | | | | Named Executive Officer (1) | 2021 Annual
Base Salary | 2022 Annual
Base Salary | Percentage
Increase | | Kabir Nath(2) | $— | $580,000 | N/A | | George Goldsmith (3) | $525,768 | $536,283 | 2.0% | | Matthew Owens(4) | $— | $371,130 | N/A | | Ekaterina Malievskaia | $371,130 | $378,553 | 2.0% |
(1) All amounts, except those for Mr. Nath, have been converted from GBP to USD using the 2022 average FX rate (£1:$1.2371). (2) Kabir Nath was appointed as our Chief Executive Officer effective August 1, 2022, with his base salary established at that time in the latterU.S. dollars. (3) In connection with his transition to Executive Chair effective August 1, 2022, Mr. Goldsmith's base salary was adjusted to £346,800 ($429,026). (4) Matthew Owens was appointed as our Chief Legal Officer and General Counsel effective February 1, 2022, with his
half of 2020 in connection with the IPO, the Compensation Committee did not approve any additional increases for 2021, with base salaries for the NEOs remaining at the same levels as were approved at IPO.
| | | | | | | | | | | | Named Executive Officer (1) | 2020 Post-
IPO Annual
Base Salary | 2021 Annual
Base Salary | Percentage
Increase | | George Goldsmith | $584,658 | $584,658 | 0.0% | | Piers Morgan | $440,213 | $440,213 | 0.0% | | Ekaterina Malievskaia | $412,700 | $412,700 | 0.0% | | Nate Poulsen | $370,000 | $370,000 | 0.0% | Guy Goodwin (2) | N/A | $446,335 | N/A |
(1) All amounts, except those for Mr. Poulsen, have been converted from GBP to USD using the 2021 average FX rate (£1:$1.3757).
(2) Guy Goodwin was appointed as our Chief Medical Officer in July 2021, with an August 2021 start date, and his base salary was established at that time.
The actual base salaries paid to our NEOsnamed executive officers in 20212022 are set forth in the “Summary Compensation Table” below. Short-Term Incentive Compensation Annual Cash Bonuses We provide short-term incentive compensation opportunities to our executive officers, including our NEOs,named executive officers, in the form of annual cash bonuses to incentivize and award delivery of the Company’s strategy and corporate objectives on an annual basis. For 2021,2022, we focuseddetermined annual cash bonuses based on a review of our overall corporate performance to determine the cash incentives of our CEO and after discussion with management, other NEOs, with some discretion applied based on individual achievements in the year. Going forward, for 2022, we will incorporate a distinct individual performance assessment for each of the NEOs beyond the CEOnamed executive officers to recognize their individual and team objectives within their respective functional areas. Performance Goals At the beginning of each year, the Board of Directors discusses with the CEOChief Executive Officer the annual corporate performance objectives that are intended to be the most significant drivers of our short-term and long-term success. After the end of the relevant financial year, the Compensation and Leadership Development Committee assesses the results of the corporate goals, reviews management’s self-assessment, evaluates specific achievements that advanced the prior year’s corporate objectives, and determines our overall success in the prior year. The Compensation and Leadership Development Committee considers our CEO’sChief Executive Officer’s recommendations, and independently reviews and approves the total percentage achievement level for each of the other NEOs.named executive officers. Target Annual Bonuses At the time of hire, the target annual bonus is determined for each of our NEOs,named executive officers, and at the beginning of each year, the Compensation and Leadership Development Committee reviews and determines whether to change the target annual bonus for each such individual. The Compensation and Leadership Development Committee considers the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above, with an emphasis on market data from our compensation peer group for comparable positions. Target annual bonuses represent a specific percentage of annual base salary. At the time of our IPO, we adjusted our targets based on a review of peer public companies. Each year, we evaluate our target annual bonuses relative to our executive peer group and adjust the targets, as appropriate, to stay aligned with our compensation philosophy. The last undertaking of this analysis occurred around the time of our IPO in September 2020, whenIn January 2022, we adjusted Mr. Goldsmith’s target from 50%55% to 55%,60%. Dr. Malievskaia’s target from 40% toremained at 45%,. Each of Mr. Morgan’s target from 50% to 45%,Nath's and Mr. Poulsen’sOwen's target from 33% to 35%. We expect to undertake a further analysis this year.bonus for 2022 (60% and 40% of base salary, respectively) was established through negotiations when they were hired.
20212022 Annual Cash Bonuses
The 20212022 corporate goals and achievements are set forth below. The Compensation and Leadership Development Committee determines the range of our corporate performance from a threshold of 50% to a maximum of 125%. No bonus is paid to any executive officer unless 50% of the corporate goals are achieved. Corporate Goals and Achievements
Advance COMP360 for TRD: Prepare for a successful end-of-phase 2b meeting and a prompt launchTRD into Phase 3 trials – In November 2022, The New England Journal of phase 3 – Results ofMedicine, the world’s leading peer-reviewed medical journal, published the positive results from our Phase 2b study were delivered on timetrial of COMP360 psilocybin therapy for treatment resistant depression, or TRD. We transitioned to a Phase 3 company and as planned, despitelaunched a Phase 3 program in TRD, the uncertainties linked tofirst ever Phase 3 program of psilocybin, a unique achievement. We received Innovative Licensing and Access Pathway (ILAP) designation in the pandemic. We conducted a comprehensive regulatory engagement with the FDA and various European agencies, while ensuring operational readiness for Phase 3.U.K.
Build outAdvance Phase 2 trials of COMP360 for Anorexia Nervosa and PTSD – We launched our Phase 2 trial in anorexia nervosa, an area of critical unmet need with no FDA-approved pharmaceutical treatments available and high mortality rate for patients suffering from anorexia nervosa. We commenced patient recruitment in our Phase 2 trials in anorexia nervosa and PTSD.
Develop a portfoliopipeline of new indications for COMP360, new compoundsdrug and technologies thattechnology assets to increase the value of COMPASS while demonstrating commitment to transforming mental health – We have strengthened the potential to improve the safety, efficacy, and accessibilityintegration of our therapies – Clinical development programs for PTSDinternal and anorexia were initiated. We strengthened our drugexternal discovery capabilities throughand prioritized our Discovery Centercompound portfolio. We have identified potential prodrug lead candidates. We have continued development of our artificial intelligence model and other partnerships, successfully filing three PCT patents. In the areahave authored an article titled Psilocybin Therapy for Treatment Resistant Depression: Prediction of researching technologiesClinical Outcome by Natural Language Processing, which we have shared openly and submitted to improve safety, efficacya journal for publication. We deployed improved versions of our MyPathfinder app and efficiency, we developed a prototypeour Therapist COMPanion app, which are able to transcribe our patient session recordings, which is more cost efficient than externally available tools. We developed a secure and compliant centralised data storage repository and additional computational tools, including a proprietary web application allowing for confidential and secure recording reviews.support multiple clinical studies in different disease areas. Position COMPASS as a leading mental health care company, drive and fund future plansshape the narrative of mental health care transformation across all stakeholders and secure additional equity financing – We raised $165mconducted an intensive investor relations program and communications strategy, culminating in a secondary offeringour first Capital Markets Day event. However, conditions in the equity markets in the U.S. remain challenging, particularly in the biotechnology industry. We had cash and cash equivalents of American Depository Shares, above our target$143.2 million as of $140m, and have prepared for other fundraising opportunities.the end of 2022, which enable us to fund operations into 2024. COMP360 for TRD: Prepare for a successful and scalable commercial launch, should COMP360 receive regulatory approval, that will ensure access for as many patients as possible – We developed our commercial and patient access model at launch, including reimbursement codes, real world data and payer partnerships, services and a go-to-market model. We developed and tested the first version of a scalable therapist training platform, as well as a scalable patient support platform, in accordance with regulatory requirements. | | | | | | | | | | | | | • | | Develop a talented team and an organisation that makes rapid growth sustainable for employees – We strengthened talent hiring and people development capabilities and processes, including recruitment, onboarding, performance management, learning and development and equity, diversity and inclusion. We managed strong headcount growth, strengthened our People and IT capabilities, and maintained a score >85% on the engagement dimensions of our People survey.Develop a high-performing, mission-driven organization – We deployed our first career performance management system and developed our first management training curriculum. We managed strong headcount growth, growing by 59% during 2022, and maintained a very strong 39% net promoter score (according to Qualtrics XM Institute, a score of between 10 to 30% is good and a score of 30% or more is excellent). In 2022, we were certified a Most Loved Workplace by Best Practice Institute (BPI) and its Most Loved Workplaces® operation, which is a company that assesses and certifies a company as a workplace employees love based on internal surveys, external public ratings and interviews with corporate officials, ranking number 31 in the U.K.
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In January 2022,2023, the Compensation and Leadership Development Committee evaluated our achievement of the 20212022 corporate objectives. Based on our 20212022 results, the Compensation and Leadership Development Committee determined that we had not only achieved eachmost of our performancethe above corporate goals at target but had also achievedoverachieved certain stretch goals, in particular aroundelements related to developing technology assets under our above-described goal of "Develop a pipeline of new drug and technology assets to increase the continued developmentvalue of COMPASS while demonstrating commitment to transforming mental health" and commercial preparations for COMP360 for TRD and the extensionunderachieved our above-described goal of COMP360 to different indications.securing additional equity financing. Based on this assessment, the Compensation and Leadership Development Committee determined to fund the annual bonus pool at 110%100%, a percentage reached as a weighted average of scores against our corporate goals as applied to a maximum bonus of 125% and which reflected our above-target corporate performance.goals. The Compensation and Leadership Development Committee awarded bonuses at this funding level for the CEOChief Executive Officer and other NEOs,named executive officers, after evaluating each person’s contributions in light of company goals, with adjustments to award sizes for named executive officers other than each of our Chief Executive Officers, based on corporate achievement in applicable function and individual performance in the year. While all of our NEOs met their targets, exceptional performance was rewarded with payouts above 110%.
The table below sets forth the 20212022 annual base salaries, target annual cash bonuses, and the 20212022 annual cash bonuses earned by our NEOs.named executive officers. | | | | | | | | | | | | | | | | | | | | Named Executive Officer (1) | 2021 Annual Base Salary | Target Annual Cash Bonus (% of Annual Base Salary) | 2021 Payout (% of Target) | 2021
Annual
Cash Bonus | | George Goldsmith | $584,658 | 55% | 100% | $321,562 | | Ekaterina Malievskaia | $412,700 | 45% | 125% | $231,800 | Guy Goodwin (2) | $167,716 | 35% | 110% | $64,572 | Piers Morgan (3) | $440,213 | 45% | N/A (4) | $137,567 | | Nate Poulsen | $370,000 | 35% | 104% | $134,472 |
| | | | | | | | | | | | | | | | | | | | Named Executive Officer (1) | 2022 Annual Base Salary | Target Annual Cash Bonus (% of Annual Base Salary) | 2022 Payout (% of Target) | 2022 Annual Cash Bonus | Kabir Nath(2) | $580,000 | 60% | 100% | $145,000 | George Goldsmith(3) | $491,337 | 60% | 100% | $294,964 | Matthew Owens(4) | $371,130 | 40% | 96% | $133,131 | | Ekaterina Malievskaia | $378,563 | 45% | 96% | $163,539 |
(1) All amounts, except those for Mr. Poulsen,Nath, have been converted from GBP to USD using the 20212022 average FX rate (£1:$1.3757)1.2371). (2) Mr. GoodwinNath was appointed as our Chief MedicalExecutive Officer in July 2021, with aneffective August 2021 start date,1, 2022, and his target bonus was calculated based on a pro-rated salary from his point of hire to year-end. (3) A discretionary 2021 bonus payment of £100,000 ($137,567) was made to Mr. Morgan in connection with his continued fulfillment of his functionGoldsmith served as Chief FinancialExecutive Officer until the endAugust 1, 2022 and as Executive Chair between August 1, and December 31, 2022. His target bonus was calculated based on a pro-rated salary for each of 2021.these roles during 2022. (4) Mr. Morgan ceasedOwens was appointed as our Chief Legal Officer and General Counsel effective February 1, 2022 and his target bonus was calculated based on a pro-rated salary from his point of hire to be an employee of the Company on December 31, 2021 and was not entitled to his annual bonus.year-end.
Long-Term Incentive Compensation Long-term incentive compensation in the form of equity incentives aligns the interests of our executive officers, including our NEOs,named executive officers, with long-term shareholder interests and allows us to attract, incentivize, and retain staff in a competitive market. As a form of compensation, share-based incentives also enable us to more effectively manage the Company’s cash resources. In connection with the IPO, we adopted the COMPASS Pathways plc 2020 Share Option and Incentive Plan (the “2020 Plan”). The 2020 Plan allows for the grant of options, restricted share awards, restricted share unit awards (“RSUs”), other share or cash-based awards and dividend equivalent awards to employees, non-employee directors and consultants. At the time of hire, equity awards are granted to our executive officers, including our NEOs,named executive officers, based on the factors described in “Governance of Executive Compensation Program—Compensation-Setting Factors” above. WithMr. Nath and Mr. Owens joined us during 2022 and their equity awards were negotiated during the exceptionhiring process. The below table reflects the new hire grants negotiated with each of 2021 (as discussed above), typically,Mr. Nath and Mr. Owens.
| | | | | | | | | | | | | Named Executive Officer | New Hire Option Award | New Hire Restricted Share Unit Award | | Kabir Nath | 600,000 | 50,000 | | Matthew Owens | 100,000 | 12,400 |
Typically, at the beginning of each year, the Compensation and Leadership Development Committee determines the size and relative weighting of the annual equity awards for our executive officers, including our NEOs,named executive officers, it deems reasonable and appropriate based on such factors. The size and relative weighting is the same for each of our executive officers, including our NEOs,named executive officers, who are at the same level. In addition, the Compensation and Leadership Development Committee may deem it advisable to grant subsequent equity awards to our executive officers, including our NEOs,named executive officers, and may adjust their equity awards in the event of a promotion or significant change in responsibilities. As the Company made share option grants to executive officers, including our NEOs, at the time of IPO in September 2020 under the 2020 Plan, no additional equity grants were issued to Named Executive Officers during 2021, barring our Chief Medical Officer, who received a sign-on equity grant of 100,000 options that vest 25% on the one-year anniversary of the grant date and over 36 equal installments over the subsequent 36 months, subject to his continued service. With the help of our compensation consultant, we determine whether to grant additional equity awards, the mix of RSUs and options and the amount of equity awards to give to our executive officers based on benchmarking the position of each executive officer against the compensation paid to people in similar positions in our peer group.
In February 2022, the Compensation and Leadership Development Committee approved the following annual equity grants to our named executive officers employed at that time. | | | | | | | | | | | | | Named Executive Officer | Annual Option Award | Annual Restricted Share Unit Award | | George Goldsmith | 173,000 | 29,000 | | Ekaterina Malievskaia | 75,000 | 13,000 |
Employment Arrangements with our Named Executive Officers In connection with our IPO, the Compensation and Leadership Development Committee reviewed the employment agreements with our executive officers, including our NEOs,Mr. Goldsmith and Dr. Malievskaia, with a focus on public market practices and severance arrangements in the event of involuntary termination not in connection with a change in control and involuntary termination or good reason termination in connection with a change in control, and determined to revise the terms of employment agreements with our executive officers in line with prevailing market practice for our peer companies and prevailing practices in the NEO’snamed executive officer's jurisdiction of employment, providing similar terms to executives hired since the IPO.IPO, such as Mr. Nath and Mr. Owens. We engage our NEOsnamed executive officers using standard terms as set out in our executive employment agreements. These agreements set forth the
individual’s base salary and bonus target based on a percentage of annual base salary and entitle the executive officer to participate in our equity incentive plans, with the amount of such equity participation to be determined at the Compensation and Leadership Development Committee’s sole discretion, and other employee benefits generally available to our employees. If an executive officer is based outside the U.K., additional benefits and assistance with relocation may be provided which reflect local market norms or legislation. The agreements also prohibit our NEOsnamed executive officers from engaging directly or indirectly in competition with us, recruiting or soliciting our employees, diverting our customers to a competitor, or disclosing our confidential information or business practices. Our post-employment compensation arrangements set forth in the employment agreements are designed to provide reasonable compensation to executive officers who leave the Company under certain circumstances to facilitate their transition to new employment. Further, we seek to mitigate any potential employer liability and avoid future disputes or litigation by requiring a departing executive officer to sign a separation and release agreement acceptable to us as a condition to receiving post-employment compensation payments or benefits. Mr. Poulsen received severance payments consistent with the terms of his employment agreement in connection with his departure from the Company on December 31, 2021. Our Compensation and Leadership Development Committee and the Board of Directors do not consider specific amounts payable under these post-employment compensation arrangements when establishing annual compensation. It does believe, however, that these arrangements are necessary to offer compensation packages that are competitive. For more information on the service and employment agreements with our NEOsnamed executive officers and post-employment compensation arrangements, see the discussion under the headings “Employment Agreements, Change of Control and Severance Arrangements with Named Executive Officers” and “Potential Payments upon Termination or Change in Control” later in this Proxy Statement. Other Elements of Compensation Retirement Plans We currently maintain a 401(k) retirement savings plan for our U.S.-based employees, including any U.S.-based NEOs,named executive officers, who satisfy certain eligibility requirements. The U.S. Internal Revenue Code (the “Code”) allows eligible employees to defer a portion of their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k) plan. We currently contribute a 4% safe harbor match on employee contributions up to the statutory limit. We also maintain a defined contribution plan for U.K. employees, including any U.K.-based NEOs,named executive officers, who satisfy certain eligibility requirements. All employees who participate in the plan receive aan employer contribution, which is generally 3% contribution. Mr. Morgan received ancontribution and in some cases may be up to 8% contribution in line with the terms of his employment agreement. 2020 Share Option and Incentive Plan
In September 2020, we adopted the 2020 Plan. The 2020 Plan allows the Compensation Committee to make equity-based and cash-based incentive awards to our officers, employees, directors and other key persons (including consultants). The 2020 Plan is more fully described below, see “Grants of Plan Based Awards for Fiscal Year 2021.”
The 2020 Plan permits the granting of both options to purchase ordinary shares intended to qualify as incentive share options under Section 422 of the Code, and options that do not so qualify. The option exercise price of each option will be determined by our Compensation Committee but may not be less than 100% of the fair market value of our ordinary shares on the date of grant. The term of each option will be fixed by our Compensation Committee and may not exceed ten years from the date of grant. Our Compensation Committee development committee will determine at what time or times each option may be exercised.
Our Compensation Committee may award share appreciation rights subject to such conditions and restrictions as it may determine. Share appreciation rights entitle the recipient to ordinary shares, or cash, equal to the value of the appreciation in our share price over the exercise price. The exercise price of each share appreciation right may not be less than 100% of the fair market value of the ordinary shares on the date of grant.
Other Compensation Policies and Practices Policy Prohibiting Hedging and Pledging Our Insider Trading Policy prohibits our executive officers, the non-employee members of our Board of Directors and certain designated employees who in the course of the performance of their duties have access to material, non-public information regarding the Company from engaging in the following transactions: selling any of our securities that they do not own at the time of the sale (a “short sale”); buying or selling puts, calls, other derivative securities of the Company or any derivative securities that provide the economic equivalent of ownership of any of our securities or an opportunity, direct or indirect, to profit from any change in the value of our securities or engaging in any other hedging transaction with respect to our securities at any time; using our securities as collateral in a margin account; and pledging our securities as collateral for a loan (or modifying an existing pledge) unless the pledge has been approved by the Audit and Risk Committee of the Board of Directors. Tax and Accounting Considerations Taxation of “Parachute” Payments Sections 280G and 4999 of the U.S. Code provide that executive officers and directors who hold significant equity interests and certain other service providers may be subject to significant additional taxes if they receive payments or benefits in connection with a change in control of the company that exceeds certain prescribed limits, and that the company (or a successor) may forfeit a deduction on the amounts subject to this additional tax. We have not agreed to provide any executive officer, including any NEO,named executive officer, with a “gross-up” or other reimbursement payment for any tax liability that the executive officer might owe as a result of the application of Sections 280G or 4999 of the U.S. Code. Risk Assessment
Our Compensation Committee annually assesses our compensation plans, policies and practices for NEOs and other employees, including whether the policies and practices are reasonably likely to have a material adverse effect on us. We believe that the mix and design of our executive compensation plans and policies do not encourage management to assume excessive risks and are not reasonably likely to have a material adverse effect on us for the following reasons: we offer an appropriate balance of short and long-term incentives and fixed and variable amounts; our variable compensation provides enhanced incentives for executives to outperform and strong disincentives for executives to underperform against our Company goals and is based on a balanced mix of Company performance criteria; and the Board and compensation committee have the authority to adjust variable compensation as appropriate.
COMPENSATION & LEADERSHIP DEVELOPMENT COMMITTEE REPORT
The Compensation and Leadership Development Committee of our Board has reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K and contained in this proxy statement. Based on this review and discussion, the Compensation Committee has recommended to our Board that the Compensation Discussion and Analysis be included in this proxy statement.
The COMPASS Pathways plc Compensation and Leadership Development Committee
Annalisa Jenkins (Chair)
Jason Camm
David Norton
Wayne Riley
The information contained in this Compensation and Leadership Development Committee report shall not be deemed to be “soliciting material,” “filed” with the SEC, subject to Regulations 14A or 14C of the Exchange Act, or subject to the liabilities of Section 18 of the Exchange Act. No portion of this Compensation and Leadership Development Committee report shall be deemed to be incorporated by reference into any filing under the Securities Act, or the Exchange Act, through any general statement incorporating by reference in its entirety the proxy statement in which this report appears, except to the extent that we specifically incorporate this report or a portion of it by reference. In addition, this Compensation and Leadership Development Committee report shall not be deemed filed under either the Securities Act or the Exchange Act.
NAMED EXECUTIVE OFFICER COMPENSATION
SUMMARY COMPENSATION TABLE The following table provides information regardingshows the total compensation for services rendered in all capacities that was earnedpaid or accrued during the last two fiscal year indicated.years ended December 31, 2022 and 2021 to each individual who served as our principal executive officer during fiscal 2022 and our two next most highly compensated executive officers were serving as executive officers as of December 31, 2022. These individuals are our named executive officers. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Non-Equity | | | | | | | | | | | | | | | Incentive | | | | | | | | | | | | | | Option | Plan | | All Other | | | | | | | Salary | | Bonus | | | Awards | Compensation | | Compensation | | Total | Name and Principal Position (1) | | Year | | ($) | | ($) | | | ($) (2) | ($) | | ($) | | ($) | | George Goldsmith | | 2021 | | 584,658 | | | | | — | 321,562 | | 37,304 (3) | | 943,523 | | Chief Executive Officer | | 2020 | | 453,936 | | | | | 1,707,007 | 234,743 | | 34,113 | | 2,429,800 | | | 2019 | | 346,782 | | | | | — | — | | 28,752 | | 375,534 | Piers Morgan (4) | | 2021 | | 440,213 | | 137,567 (5) | | | 123,260 (6) | | | 35,217 (7) | | 736,256 | | Former Chief Financial Officer | | 2020 | | 262,523 | | | | | 1,377,094 | 149,207 | | 19,643 | | 1,808,467 | Guy Goodwin (8) | | 2021 | | 167,719 | | | | | 1,817,184 | 64,572 | | — | | 2,049,475 | | Chief Medical Officer | | — | | — | | | | | — | — | | — | | — | | Ekaterina Malievskaia | | 2021 | | 412,700 | | | | | — | 231,800 | | 24,635 (3) | | 669,134 | | Chief Innovation Officer | | 2020 | | 362,287 | | | | | 1,401,736 | 150,403 | | 23,708 | | 1,938,134 | | | 2019 | | 306,659 | | | | | — | — | | 21,027 | | 327,686 | Nate Poulsen (9) | | 2021 | | 370,000 | | | | | — | 134,472 | | 900,748 (10) | | 1,405,220 | | Former GC and Chief Legal Officer | | 2020 | | 370,000 | | | | | 722,133 | 107,250 | | 2,000 | | 1,201,383 | | 2019 | | 325,000 | | | | | 330,664 | — | | — | | 655,664 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Stock | | Option | | | | All Other | | | | | | | Salary | | Bonus | | Awards | | Awards | | | | Compensation | | Total | | Name and Principal Position(1) | | Year | | ($) | | ($) (2) | | ($) (3) | | ($) (3) | | | | ($) | | ($) | | Kabir Nath (4) | | 2022 | | 243,123 | | 145,000 | | 754,668 | | 6,422,963 | | | | 77,822 (5) | | 7,643,576 | | Chief Executive Officer | | 2021 | | — | | — | | — | | — | | | | — | | — | | George Goldsmith (6) | | 2022 | | 491,337 | | 294,964 | | 418,629 | | 1,732,031 | | | | 40,070 (7) | | 2,977,030 | | Former Chief Executive Officer | | 2021 | | 584,658 | | 321,562 | | — | | — | | | | 37,304 (7) | | 943,524 | | Matthew Owens(8) | | 2022 | | 339,619 | | 133,131 | | 179,000 | | 1,004,560 | | | | 155,879 (9) | | 1,812,188 | | General Counsel and Chief Legal Officer | | 2021 | | — | | — | | — | | — | | | | — | | — | | Ekaterina Malievskaia | | 2022 | | 378,563 | | 163,549 | | 187,661 | | 750,880 | | | | 25,802 (10) | | 1,506,456 | | Chief Innovation Officer | | 2021 | | 412,700 | | 231,800 | | — | | — | | | | 24,635 (10) | | 669,135 |
(1) All 2022 amounts, except those for Mr. Poulsen,Nath, have been converted from GBP to USD using the 2022 average FX rate (£1:$1.2371). All 2021 amounts have been converted from GBP to USD using the 2021 average FX rate (£1:$1.3757). (2) The amounts reported in this column represent bonuses paid to each named executive officer based on the Compensation and Leadership Development Committee’s determination of performance against 2022 goals in its discretion. (3) The amount reported in the Stock Awards and Option Awards column represents the aggregate grant date fair value of time-based RSUs and time-based share options granted to each of the NEOsnamed executive officers in the applicable year, calculated in
accordance with the provisions of FASB ASC Topic 718. The assumptions we used in calculating these amounts are included in Note 10 of our audited consolidated financial statements for the year ended December 31, 20212022 included in our Annual Report on Form 10-K, filed with the SEC on February 24, 2022.28, 2023. The amounts reported in the Summary Compensation Table for these time-based option awardsRSUs and options may not represent the amounts that the NEOsnamed executive officers will actually realize from the awards. Whether, and to what extent, a NEOnamed executive officer realizes value will depend on our actual operating performance, share price fluctuations and the NEO’snamed executive officer’s continued employment. (3)(4) Effective August 1, 2022, Mr. Nath was appointed as our Chief Executive Officer and a member of our Board. The amount reported for salary represents the amount earned following his commencement of employment, and the amount of his annual bonus was prorated to reflect his partial year of employment.
(5) All other compensation received byfor Mr. Nath consists of (i) housing allowance of £60,000 ($74,228), (ii) 401(k) company contributions of $1,794 and (iii) health savings account contributions of $1,800. (6) Effective August 1, 2022, Mr. Goldsmith transitioned to the role of Executive Chair, a position he held until December 31, 2022. The amount reported for salary represents the amount earned in his role as Chief Executive Officer until August 1, 2022 and Dr. Malievskaia relates tothe amount earned in his role as Executive Chair between August 1, 2022 and December 31, 2022. (7) All other compensation for Mr. Goldsmith consists of health insurance premiums paid under a separate policy than what is applicable to all other employees. (4) On December 31, 2021,(8) Effective February 1, 2022, Mr. Morgan’s resignation from the position ofOwens was appointed as our Chief FinancialLegal Officer became effective.
(5)A discretionary 2021 bonus payment of $137,567 was made to Mr. Morgan in connection with his continued fulfillment of his function as Chief Financial Officer until the end of 2021.
(6) As part of Mr. Morgan’s separation agreement with the Company, there were two modifications in relation to his previously granted options. This amount represented the additional charges the Company recognized as part of these modifications calculated in accordance with FASB ASC Topic 718.
(7) All other compensation received by Mr. Morgan relates to Company pension contributions of 8%.
(8) Dr. Goodwin joined us in July 2021 (with an August 2021 start date).and General Counsel. The amount reported for salary represents the amount earningearned following his commencement of employment, and the amount of his non-equity incentive compensationannual bonus was prorated to reflect his partial year of employment.
(9) On December 31, 2021,All other compensation for Mr. Poulsen employment termination with the Company became effective.Owens consists of (i) housing allowance of £110,000 ($136,085) and (ii) employer pension contributions of £16,000 ($19,794). (10) This amount represents the severance equalAll other compensation for Dr Malievskaia consists of health insurance premiums paid under a separate policy than what is applicable to nine months of his base salary ($277,500) plus an additional $615,000 paid to Mr. Poulsen upon termination of employment consistent with the terms of his employment agreement entered into in September 2020. This amount also includes $8,248 in 401(k) matching contributions by the Company.
GRANTS OF PLAN BASED AWARDS FOR FISCAL YEAR 2021
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | All Other | | | | Grant Date | | | | | Estimated Future Payouts | | Option Awards: | | | | Fair Value | | | | | Under Non-Equity Incentive | | Number of | | Exercise or | | Of Stock | | | | | Plan Awards (1) | | Securities | | Base Price of | | and Option | | | | | Threshold | | Target | | Maximum | | Underlying Options (3) | | Option Awards | | Awards (4) | | Name | | Grant Date | | ($) | | ($) | | ($) (2) | | (#) | | ($/Sh) | | ($) | George Goldsmith (5) | | — | | 160,781 | | 321,562 | | 401,952 | | — | | — | | — | Piers Morgan (5) | | — | | 99,048 | | 198,096 | | 247,620 | | — | | — | | — | Guy Goodwin (5) | | 8/16/2021 | | — | | — | | — | | 100,000 | | 30.27 | | 1,817,184 | | | — | | 29,351 | | 58,702 | | 73,377 | | — | | — | | — | Ekaterina Malievskaia (5) | | — | | 92,857 | | 185,715 | | 232,144 | | — | | — | | — | | Nate Poulsen | | — | | 64,750 | | 129,500 | | 161,875 | | — | | — | | — |
(1) The amounts shown reflect the target annual cash bonus for our NEOs, which are disclosed in the “2021 Annual Cash Bonuses” section of the above “Compensation Discussion and Analysis.” The actual amounts paid for 2021 are disclosed in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.
(2) The non-equity incentive plan award maximum can be modified by an individual performance modifier up to 125%.
(3) The amounts shown represent time-based share options granted pursuant to our 2020 Plan.
(4) The amount reported represents the aggregate grant date fair value of share options awarded to our NEOs during 2021, calculated in accordance with FASB, ASC Topic 718. Such grant date fair value does not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value of the share option reported in this column are set forth in Note 11 in our Annual Report on Form 10-K. The amount reported in this column reflects the accounting cost for these share option awards and does not correspond to the actual economic value that may be received by the NEOs upon the exercise of the share options or any sale of the shares.
(5)All amounts, except those for Mr. Poulsen, have been converted from GBP to USD using the 2021 average FX rate (£1:$1.3757).
2020 Share Option and Incentive Plan
In September 2020, we adopted the 2020 Plan. The 2020 Plan allows the Compensation Committee to make equity-based and cash-based incentive awards to our officers, employees, directors and other key persons (including consultants).
We have initially reserved 2,074,325 ordinary shares (the “Initial Limit”) for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by four percent of the outstanding number of ordinary shares on the immediately preceding December 31, or such lesser number of shares as determined by ourCompensation Committee (the “Annual Increase”). This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. The ordinary shares underlying any awards that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by us prior to vesting, satisfied without any issuance of shares, expire or are otherwise terminated (other than by exercise) under the 2020 Plan will be added back to the ordinary shares available for issuance under the 2020 Plan.
The maximum aggregate number of shares that may be issued in the form of incentive share options shall not exceed the Initial Limit cumulatively increased on January 1, 2022 and on each January 1 thereafter by the lesser of the Annual Increase for such year or 2,074,325 ordinary shares.
The 2020 Plan is administered by our Compensation Committee. Our Compensation Committee has full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants, and to determine the specific terms and conditions of each award, subject to the provisions of the 2020 Plan. Persons eligible to participate in the 2020 Plan will be those full or part-time officers, employees, non-employee directors and other key persons (including consultants) as selected from time to time by our Compensation Committee in its discretion.
The 2020 Plan permits the granting of both options to purchase ordinary shares intended to qualify as incentive share options under Section 422 of the Code, and options that do not so qualify. The option exercise price of each option will be determined by our Compensation Committee but may not be less than 100% of the fair market value of our ordinary shares on the date of grant. The term of each option will be fixed by our Compensation Committee and may not exceed 10 years from the date of grant. Our Compensation Committee will determine at what time or times each option may be exercised.
Our Compensation Committee may award share appreciation rights subject to such conditions and restrictions as it may determine. Share appreciation rights entitle the recipient to ordinary shares, or cash, equal to the value of the appreciation in our share price over the exercise price. The exercise price of each share appreciation right may not be less than 100% of the fair market value of the ordinary shares on the date of grant.
Our Compensation Committee may award restricted shares and restricted share units to participants subject to such conditions and restrictions as it may determine. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with us through a specified vesting period. Our Compensation Committee may also grant ordinary shares that are free from any restrictions under the 2020 Plan. Unrestricted shares may be granted to participants in recognition of past services or other valid consideration and may be issued in lieu of cash compensation due to such participant. Our Compensation Committee may grant cash bonuses under the 2020 Plan to participants, subject to the achievement of certain performance goals.
The 2020 Plan provides that in the case of, and subject to, the consummation of a “sale event” as defined in the 2020 Plan, all outstanding awards may be assumed, substituted or otherwise continued by the successor entity. To the extent that the successor entity does not assume, substitute or otherwise continue such awards, then (i) all share options and share appreciation rights will automatically become fully exercisable and the restrictions and conditions on all other awards with time-based conditions will automatically be deemed waived, and awards with conditions and restrictions relating to the attainment of performance goals may become vested and non-forfeitable in connection with a sale event in the Compensation Committee’s discretion and (ii) upon the effectiveness of the sale event, the 2020 Plan and all awards will automatically terminate. In the event of such termination, (i) individuals holding options and share appreciation rights will be permitted to exercise such options and share appreciation rights (to the extent exercisable) prior to the sale event, or (ii) we may make or provide for a cash payment to participants holding options and share appreciation rights equal to the difference between the per share cash consideration payable to shareholders in the sale event and the exercise price of the options or share appreciation rights (to the extent then exercisable).
Our Board of Directors may amend or discontinue the 2020 Plan and our Compensation Committee may amend the exercise price of options and amend or cancel outstanding awards for purposes of satisfying changes in law or any other lawful purpose but no such action may adversely affect rights under an award without the holder’s consent. Certain amendments to the 2020 Plan require the approval of our shareholders. No awards may be granted under the 2020 Plan after the date that is ten years from the date of shareholder approval.
OUTSTANDING EQUITY AWARDS AT 2021 FISCAL YEAR-END
The following table summarizes the options and restricted share units that we granted to our executive officers pursuant to the terms of our equity program established in our 2017 Equity Incentive Plan (the “2017 Plan”) and the 2020 Plan and were outstanding as of December 31, 2021:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | | | | | | | | | | | | | | | | | | | | | | | | | Market | | | | | | | | | | | Number of | | Value of | | | Number of Securities | | | | | | Shares or | | Shares or | | | Underlying Unexercised | | Option | | | | Units That | | Units That | | | Options | | Exercise | | Option | | Have Not | | Have Not | | | Exercisable | | Unexercisable | | Price | | Expiration | | Vested | | Vested | | Name | | (#) | | (#) | | ($) | | Date | | (#) | | ($) (1) | George Goldsmith (2) | | 35,500 | | 78,100 | | 17.00 | | 9/18/2030 | | | | | | (3) | | | | | | | | | | 30,739 | | 679,332 | Piers Morgan (4) | | 73,280 | | — | | 4.72 | | 3/30/2030 | | | | | | (5) | | 27,990 | | — | | 0.01 | | 6/30/2030 | | | | | | (6) | | 28,000 | | — | | 17.00 | | 9/18/2030 | | | | | Guy Goodwin (7) | | — | | 100,000 | | 30.27 | | 8/15/2031 | | | | | Ekaterina Malievskaia (8) | | 26,625 | | 58,575 | | 17.00 | | 9/18/2030 | | | | | | (9) | | | | | | | | | | 30,739 | | 679,332 | Nate Poulsen (10) | | 111,178 | | — | | 1.37 | | 7/20/2029 | | | | | | (11) | | 30,466 | | — | | 2.32 | | 3/30/2030 | | | | | | (12) | | 12,247 | | — | | 17.00 | | 9/18/2030 | | | | |
(1) Market value has been computed in accordance with SEC rules as the number of unvested shares or units multiplied by the closing price per share of our ADSs on The Nasdaq Global Select Market as of 12/31/2021 ($22.10).
(2) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is September 18, 2020. This grant was made under the 2020 Plan.
(3) The restricted share units are subject to 25% vesting upon the earlier of (i) the one year anniversary of the date of grant, or (ii) the first day following the six-month anniversary of the listing of the Company’s ordinary shares on any stock exchange on which the closing price of the shares is 20% higher than the listing price for at least five consecutive trading days. They vest quarterly thereafter over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is August 12, 2020. This grant was made under the 2017 Plan.
(4) Nominal options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is March 23, 2020. This grant was made under the 2017 Plan.
(5) Nominal options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is 30 June 2020. This grant was made under the 2017 Plan.
(6) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is September 18, 2020. This grant was made under the 2020 Plan.
(7) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is August 16, 2021. This grant was made under the 2020 Plan.
(8) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is September 18, 2020. This grant was made under the 2020 Plan.
(9) The restricted share units are subject to 25% vesting upon the earlier of (i) the one year anniversary of the date of grant, or (ii) the first day following the six-month anniversary of the listing of the Company’s ordinary shares on any stock exchange on which the closing price of the shares is 20% higher than the listing price for at least five consecutive trading days. They vest quarterly thereafter for three years, subject to continued service through each applicable vesting date. The vesting commencement date is August 12, 2020. This grant was made under the 2017 Plan.
(10) Nominal options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is June 5, 2019. This grant was made under the 2017 Plan.
(11) Nominal options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is June 5, 2019. This grant was made under the 2017 Plan.
(12) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is September 18, 2020. This grant was made under the 2020 Plan.
OPTION EXERCISES AND STOCK VESTED IN FISCAL YEAR 2021
The following table sets forth the number of shares acquired and the value realized upon exercises of share options and vesting of RSUs during the fiscal year ended December 31, 2021 by each of our NEOs.
| | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | | | | | | | | | | | Number of Shares | | Value Realized | | Number of Shares | | Value Realized | | | Acquired on Exercise | | on Exercise | | Acquired on Vesting | | on Vesting | | Name | | (#) | | ($) (1) | | (#) | | ($) (2) | | George Goldsmith | | — | | — | | 13,971 | | 463,891 | | Piers Morgan | | 94,229 | | 1,690,293 | | — | | — | | Guy Goodwin | | — | | — | | — | | — | | Ekaterina Malievskaia | | — | | — | | 13,971 | | 463,891 | | Nate Poulsen | | 92,195 | | 2,867,112 | | 12,570 | | 417,374 |
(1) The value realized upon the exercise of share options is calculated by (a) subtracting the share option exercise price from the market price on the date of exercise to get the realized value per share, and (b) multiplying the realized value per share by the number of shares underlying the share options exercised.
(2) The value realized upon vesting of RSUs is calculated by multiplying the number of shares of RSUs vested by the market price on the vest date.employees.
EMPLOYMENT AGREEMENTS, CHANGE OF CONTROL AND SEVERANCE ARRANGEMENTS WITH NAMED EXECUTIVE OFFICERS George Goldsmith GeneralCEO Terms. In September 2020, we entered into an employment agreement with Mr. Goldsmith in connection with his continued employment as our Chief Executive Officer. This agreement was amended effective August 1, 2022 in connection with Mr. Goldsmith's transition to Executive Chair to, among other things, adjust his salary and eliminate the notice and payment upon termination provisions in his employment agreement.
Mr. Goldsmith’s employment agreement providesprovided for an initial base salary of £425,000 ($584,658)525,768), which is subject to annual review and redetermination. This salary was increased to £433,500 ($596,351)536,283), effective January 1, 2022. In addition, Mr. Goldsmith iswas entitled to participate in our executive variable cash compensation program. In his employment agreement, Mr. Goldsmith is eligible to earn an annual incentive bonus, with a target bonus amount of 55% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances) as determined by our Board of Directors in its discretion. Mr. Goldsmith iswas only entitled to payment of a bonus payment if he is in the Company’s employment and not under notice, given or received, on the date that the bonus is paid and iswas not eligible for a bonus payment if he iswas subject to any disciplinary action or investigation at the date any bonus is being considered or paid. Mr. Goldsmith iswas also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time. Executive Chair Terms. In connection with his appointment as Executive Chair, Mr. Goldsmith's employment agreement was amended. Pursuant to the terms of the amended employment agreement, Mr. Goldsmith served as Executive Chairman until December 31, 2022, at which time his employment ended, without the need for notice by either party. Between August 1, 2022 and December 31, 2022, Mr. Goldsmith was entitled to an annual base salary of £346,800 (approximately $414,200). He was eligible to receive an annual incentive bonus for the year ending December 31, 2022, with a target bonus amount of 60% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances), notwithstanding the termination of his employment prior to the date of the bonus payment, provided, however, that such bonus amount was pro-rated to reflect his reduced salary for the period from August 1, 2022 to December 31, 2022. During this time, Mr. Goldsmith received no additional compensation for his services as a director of the Company. Kabir Nath General Terms. Effective August 1, 2022, we entered into an employment agreement with Mr. Nath in connection with his appointment as our Chief Executive Officer. The Employment Agreement has an initial term through the earlier to occur of (i) the date Mr. Nath relocates to the United Kingdom or (ii) December 31, 2023. On or before
December 31, 2023, Mr. Nath will re-locate to the United Kingdom and will enter into a new agreement on substantially similar terms to his current employment agreement and those of our other U.K.-based executives. Mr. Nath's employment agreement provides for an annual base salary of $580,000 (upon Mr. Nath's relocation to the United Kingdom, such salary will be paid in pound sterling (“GBP”) and be equal to the greater of (i) £431,000 GBP or (ii) the GBP equivalent of $580,000 U.S. dollars calculated at the then-prevailing exchange rate), which is subject to annual review and redetermination. Pursuant to his employment agreement, Mr. Nath is eligible to earn an annual incentive bonus, with a target bonus amount of 60% of his then-current annual base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances) as determined by our Board in its discretion. In addition, Mr. Nath will receive (i) a housing stipend of £12,000 per month through August 2023; (ii) a one-time reimbursement payment of up to $5,000 for attorneys’ fees; and (iii) a one-time cash payment of $250,000 when Mr. Nath relocates to the United Kingdom. Mr. Nath will receive no additional compensation for his services as a director of the Company. Mr. Nath is also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time. Payments Upon Termination. Either party may terminate the employment agreement upon ninety (90) days’ written notice. The Company may terminate the Employment Agreement at any time for “cause” (as such term is defined in the employment agreement). Mr. Nath may terminate the Employment Agreement upon thirty (30) days’ written notice for “good reason” (as such term is defined in the Employment Agreement), subject to Company’s right to cure the deficiency. In the event we terminate Mr. Nath’s employment without “cause” or Mr. Nath terminates his employment for “good reason”, Mr. Nath is entitled to a cash severance payment equal to one year’s annual salary plus the target annual bonus amount for the year in which such termination occurs. Matthew Owens General Terms. Effective February 1, 2022, we entered into an employment agreement with Mr. Owens in connection with his appointment as our Chief Legal Officer and General Counsel. Mr. Owens’ employment agreement provides for an initial base salary of £300,000 ($371,130), which is subject to annual review and redetermination. In addition, Mr. Owens is entitled to participate in our executive variable cash compensation program. Pursuant to his employment agreement, Mr. Owens is eligible to earn an annual incentive bonus, with a target bonus amount of 40% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances). To assist with his relocation to the U.K., we agreed to pay a cash contribution towards housing costs of £10,000 ($12,371) per month through August 2023 and to provide tax advisory services in connection with the preparation and filing of tax returns for the first two tax years of his employment. Mr. Owens is also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time. His employment agreement also provides for a pension contribution equivalent to 8% of his monthly base salary. Payments upon Termination.The Company may, in its discretion, terminate Mr. Goldsmith’sOwens' employment at any time with immediate effect by providing notice to Mr. GoldsmithOwens that it is exercising its right and will make a a payment in lieu of notice (“PILON”). Such PILON is equal to the base salary which Mr. GoldsmithOwens would be entitled to receive during the notice period of nine months less deductions required by law and will be paid within 28 days. Mr. Goldsmith is subject to immediate termination and is not entitled to any further payment, including any PILON which the Company is entitled to recover if payment was already made, other than amounts accrued as of the
termination date in the event he is terminated for certain reasons for cause, including gross misconduct, serious breach of his employment agreement, gross negligence or incompetence and certain other requirements, as set forth in his employment agreement. In the event Mr. Goldsmith is terminated for any reason, under most circumstances, the Company is required to reimburse him for any unused holiday entitlements.
Following service of notice to terminate the employment by either party, which is required to be given with not less than nine months’ prior written notice, the Company may place Mr. Goldsmith on garden leave for the whole or part of the remainder of his employment. Under garden leave, Mr. Goldsmith would receive his base salary for the period, but would not be entitled to receive any bonus or other incentive in respect of the period of garden leave.
If Mr. Goldsmith is terminated other than for misconduct, lack of capability or poor performance, or if Mr. Goldsmith terminates employment in response to a fundamental breach of contract by the Company within 12 months following a change of control of the Company (as defined in the employment agreement), subject to certain conditions, Mr. Goldsmith is entitled to (a) 18 months’ base salary, (b) the pro rata bonus Mr. Goldsmith would have received for the year in which his employment is terminated had he not been dismissed, but not including any pro rata bonus for a notice period which is not worked and (c) an amount equivalent to the cost to the Company of providing Mr. Goldsmith with his other employment benefits for 18 months.
Piers Morgan
General Terms. In September 2020, we entered into an employment agreement with Mr. Morgan in connection with his continued employment as our Chief Financial Officer.
Mr. Morgan’s employment agreement provided for an initial base salary of £320,000 ($440,224), which is subject to annual review and redetermination. In addition, Mr. Morgan was entitled to participate in our executive variable cash compensation program. Mr. Morgan was eligible to earn an annual incentive bonus, with a target bonus amount of 45% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances).A discretionary 2021 bonus payment of £100,000 ($137,570) was awarded to Mr. Morgan in connection with the continued fulfillment of his function as Chief Financial Officer until December 31, 2021. Mr. Morgan was also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time.
Settlement Agreement. On July 29, 2021, we entered into a settlement agreement with Mr. Morgan, which provided, among other things, that Mr. Morgan would receive (i) his salary up to his termination date of December 31, 2021, (ii) compensation for any outstanding holiday accrued and unused as of the termination date and (iii) his contractual benefits up to his termination date of December 31, 2021. Mr. Morgan did not receive any additional payments in connection with his voluntary termination with the Company.
As part of Mr. Morgan’s settlement agreement with the Company, there were two modifications in relation to his previously granted options regarding vesting condition accelerating some options to be vested by December 31, 2021 and expected terms changing from 90 days to 6 months after final employment date, which resulted in an additional charge of $123,260 for the Company under FASB ASC Topic 718.
Guy Goodwin
General Terms. In July 2021, we entered into an employment agreement with Dr. Goodwin in connection with his appointment as our Chief Medical Officer.
Dr. Goodwin’s employment agreement provides for a base salary of £324,450 ($446,346), which is subject to annual review and redetermination. In addition, Dr. Goodwin is entitled to participate in our executive variable cash compensation program. In his employment agreement, Dr. Goodwin is eligible to earn an annual incentive bonus, with a target bonus amount of 35% of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances) as determined by our Board of Directors in its discretion. Dr. Goodwin is only entitled to payment of a bonus payment if he is in the Company’s employment on the date that the bonus is paid and is not eligible for a bonus payment if he is subject to any disciplinary action or investigation at the date any bonus is being considered or paid. Dr. Goodwin is also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time.
Payments upon Termination. The Company may, in its discretion, terminate Dr. Goodwin’s employment at any time with immediate effect by providing notice to Dr. Goodwin that it is exercising its right and will make a PILON. Such PILON is equal to the base salary which Dr. Goodwin would be entitled to receive during the notice period of three months less deductions required by law and will be paid within 28 days.
Dr. GoodwinOwens is subject to immediate termination and is not entitled to any further payment, including any PILON which the Company is entitled to recover if payment was already made, other than amounts accrued as of the termination date in the event he is terminated for certain reasons for cause, including gross misconduct, serious breach of hisher employment agreement, gross negligence or incompetence and certain other requirements, as set forth in hisher employment agreement. In the event Dr. GoodwinMr. Owens is terminated for any reason, under most circumstances, the Company is required to reimburse him for any unused holiday entitlements.
Following service of notice to terminate the employment by either party, which is required to be given with not less than threenine months’ prior written notice, the Company may place Dr. GoodwinMr. Owens on garden leave for the whole or part of the remainder of hisher employment. Under garden leave, Dr. GoodwinMr. Owens would receive his base salary for the period, but would not be entitled to receive any bonus or other incentive in respect of the period of garden leave. If Dr. GoodwinMr. Owens is terminated other than for misconduct, lack of capability or poor performance, or if Dr. GoodwinMr. Owens terminates employment in response to a fundamental breach of contract by the Company within 12 months following a change of control of the Company (as defined in the employment agreement), subject to certain conditions, Dr. GoodwinMr. Owens is entitled to (a) 12 months’ base salary, (b) the pro rata bonus Dr. GoodwinMr. Owens would have received for the year in which his employment is terminated had he not been dismissed, but not including any pro
rata bonus for a notice period which is not worked and (c) an amount equivalent to the cost to the Company of providing Dr. GoodwinMr. Owens with his other employment benefits for 12 months. Ekaterina Malievskaia General Terms. In September 2020, we entered into an employment agreement with Dr. Malievskaia in connection with her continued employment as our Chief Innovation Officer. Dr. Malievskaia’s employment agreement provides for an initial base salary of £300,000 ($412,710)371,130), which is subject to annual review and redetermination. This salary was increased to £306,000 ($420,964)378,563), effective January 1, 2022. In addition, Dr. Malievskaia is entitled to participate in our executive variable cash compensation program. In her employment agreement, Dr. Malievskaia is eligible to earn an annual incentive bonus, with a target bonus amount of 45% of her base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances). Dr. Malievskaia is also eligible to participate in all our generally-available employee benefit plans and programs in effect from time to time. Payments upon Termination. The Company may, in its discretion, terminate Dr. Malievskaia’s employment at any time with immediate effect by providing notice to Dr. Malievskaia that it is exercising its right and will make a PILON. Such PILON is equal to the base salary which Dr. Malievskaia would be entitled to receive during the notice period of nine months less deductions required by law and will be paid within 28 days. Dr. Malievskaia is subject to immediate termination and is not entitled to any further payment, including any PILON which the Company is entitled to recover if payment was already made, other than amounts accrued as of the termination date in the event he is terminated for certain reasons for cause, including gross misconduct, serious breach of her employment agreement, gross negligence or incompetence and certain other requirements, as set forth in her employment agreement. In the event Dr. Malievskaia is terminated for any reason, under most circumstances, the Company is required to reimburse him for any unused holiday entitlements. Following service of notice to terminate the employment by either party, which is required to be given with not less than nine months’ prior written notice, the Company may place Dr. Malievskaia on garden leave for the whole or part of the remainder of her employment. Under garden leave, Dr. Malievskaia would receive her base salary for the period, but would not be entitled to receive any bonus or other incentive in respect of the period of garden leave. If Dr. Malievskaia is terminated other than for misconduct, lack of capability or poor performance, or if Dr. Malievskaia terminates employment in response to a fundamental breach of contract by the Company within 12 months following a change of control of the Company (as defined in the employment agreement), subject to certain conditions, Dr. Malievskaia is entitled to (a) 12 months’ base salary, (b) the pro rata bonus Dr. Malievskaia would have received for the year in which his employment is terminated had she not been dismissed, but not including any pro rata bonus for a notice period which is not worked and (c) an amount equivalent to the cost to the Company of providing Dr. Malievskaia with her other employment benefits for 12 months.
2020 Share Option and Incentive Plan In September 2020, we adopted the 2020 Plan. The 2020 Plan allows the Compensation and Leadership Development Committee to make equity-based and cash-based incentive awards to our officers, employees, directors and other key persons (including consultants). We have initially reserved 2,074,325 ordinary shares (the “Initial Limit”) for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by four percent of the outstanding number of ordinary shares on the immediately preceding December 31, or such lesser number of shares as determined by ourCompensation and Leadership Development Committee (the “Annual Increase”). This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. The ordinary shares underlying any awards that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by us prior to vesting, satisfied without any issuance of shares, expire or are otherwise terminated (other than by exercise) under the 2020 Plan will be added back to the ordinary shares available for issuance under the 2020 Plan.
Nate PoulsenThe maximum aggregate number of shares that may be issued in the form of incentive share options shall not exceed the Initial Limit cumulatively increased on January 1, 2022 and on each January 1 thereafter by the lesser of the Annual Increase for such year or 2,074,325 ordinary shares.
General Terms. In SeptemberThe 2020 we entered into an employment agreement with Mr. Poulsen in connection with his continued employment asPlan is administered by our General CounselCompensation and Chief Legal Officer.
Mr. Poulsen’s employment agreement providedLeadership Development Committee. Our Compensation and Leadership Development Committee has full power to select, from among the individuals eligible for an initial base salaryawards, the individuals to whom awards will be granted, to make any combination of $370,000. In addition, Mr. Poulsen was entitledawards to participate in our executive variable cash compensation program. In his employment agreement, Mr. Poulsen was eligibleparticipants, and to earn an annual incentive bonus, with a target bonus amountdetermine the specific terms and conditions of 35%each award, subject to the provisions of his base salary (and the ability to earn up to 125% of that target bonus amount in certain circumstances). Mr. Poulsen was also2020 Plan. Persons eligible to participate in allthe 2020 Plan will be those full or part-time officers, employees, non-employee directors and other key persons (including consultants) as selected from time to time by our generally-available employee benefit plansCompensation and programs.Leadership Development Committee in its discretion.
Transition Agreement. On September 29, 2021, we entered into a transition agreement with Mr. Poulsen.UnderThe 2020 Plan permits the termsgranting of options to purchase ordinary shares intended to qualify as incentive share options under Section 422 of the transition agreement, Mr. Poulsen ceasedCode, options intended to servequalify as U.K. tax advantaged options under our company share option plan, or CSOP, which is a sub-plan under the General Counsel2020 Plan and Chief Legal Officeroptions that do not so qualify for any tax advantages. Other than the nominal cost options granted to non-U.S. tax persons in lieu of restricted share units, the option exercise price of each option will be determined by our Compensation and tookLeadership Development Committee but may not be less than 100% of the fair market value of our ordinary shares on the role of Chief Legal Officer, IP until his termination date. The transition agreement also provided, among other things, that Mr. Poulsen would receive (i) his salary up to his termination date of December 31, 2021, (ii) his contractual benefits up to his terminationgrant. The term of each option will be fixed by our Compensation and Leadership Development Committee and may not exceed ten years from the date of December 31, 2021,grant. Our Compensation and (iii)Leadership Development Committee development committee will determine at what time or times each option may be exercised.
Our Compensation and Leadership Development Committee may award share appreciation rights subject to such conditions and restrictions as it may determine. Share appreciation rights entitle the continued vestingrecipient to ordinary shares, or cash, equal to the value of his outstanding equity awards through his terminationthe appreciation in our share price over the exercise price. The exercise price of each share appreciation right may not be less than 100% of the fair market value of the ordinary shares on the date of December 31, 2021.grant. UnderOur Compensation and Leadership Development Committee may award restricted shares and restricted share units to participants subject to such conditions and restrictions as it may determine. These conditions and restrictions may include the termsachievement of hiscertain performance goals and/or continued employment agreementwith us through a specified vesting period. Our Compensation and transition agreement,Leadership Development Committee may also grant ordinary shares that are free from any restrictions under the 2020 Plan. Unrestricted shares may be granted to participants in recognition of past services or other valid consideration and may be issued in lieu of cash compensation due to such participant. Our Compensation and Leadership Development Committee may grant cash bonuses under the 2020 Plan to participants, subject to the achievement of certain performance goals.
The 2020 Plan provides that in the case of, and subject to, the consummation of a “sale event” as defined in the 2020 Plan, all outstanding awards may be assumed, substituted or otherwise continued by the successor entity. To the extent that the successor entity does not assume, substitute or otherwise continue such awards, then (i) all share options and share appreciation rights will automatically become fully exercisable and the restrictions and conditions on all other awards with time-based conditions will automatically be deemed waived, and awards with conditions and restrictions relating to the attainment of performance goals may become vested and non-forfeitable in connection with his departurea sale event in the Compensation and Leadership Development Committee’s discretion and (ii) upon the effectiveness of the sale event, the 2020 Plan and all awards will automatically terminate. In the event of such termination, (i) individuals holding options and share appreciation rights will be permitted to exercise such options and share appreciation rights (to the extent exercisable) prior to the sale event, or (ii) we may make or provide for a cash payment to participants holding options and share appreciation rights equal to the difference between the per share cash consideration payable to shareholders in the sale event and the exercise price of the options or share appreciation rights (to the extent then exercisable). Our Board may amend or discontinue the 2020 Plan and our Compensation and Leadership Development Committee may amend the exercise price of options and amend or cancel outstanding awards for purposes of satisfying changes in law or any other lawful purpose but no such action may adversely affect rights under an award without the holder’s consent. Certain amendments to the 2020 Plan require the approval of our shareholders. No awards may be granted under the 2020 Plan after the date that is ten years from employment with the Company and subject to certain other conditions, Mr. Poulsen was entitled to nine months of his base pay and an additional $615,000 as severance. Mr. Poulsen was also entitled to his earned base salary, any unused vacation time, unpaid expense reimbursements and any vested benefits through the termination date. Since Mr. Poulsen did not breach any of his continuing obligations through his termination date of December 31, 2021, he received $892,500 (an amount equal to nine months of his base salary plus an additional $615,000) as severance and $134,472 for his 2021 annual incentive compensation. Potential Payments upon Termination or Change in Control
The following table sets forth the estimated payments payable to our NEOs upon termination of employment under various circumstances. Payments and benefits are estimated assuming that the triggering event took place on December 31, 2021. There can be no assurance that a triggering event would produce the same or similar results as those estimated below if such event occurs on any other date or at any other price, of if any other assumption used to estimate potential payments and benefits is not correct. Due to the number of factors that affect the nature and amount of any potential payments or benefits, any actual payments and benefits may be different. GBP amounts have been converted to USD using the 2021 average FX rate (£1:$1.3757).shareholder approval.
| | | | | | | | | | | | | | | | | | | Name | Triggering Event (1) | Cash based on Base Salary ($)(2) | Pro Rated Annual Bonus ($) | Benefits ($)(3) | Accrued Vacation ($)(4) | | George Goldsmith | Notice of immediate termination by the Company without cause | 438,504 | — | — | 59,637 | | Notice by the Company or employee to termination and the employee is on garden leave | 438,504 | — | — | — | | Termination by the Company or by the employee in response to a fundamental breach of contract by the Company within 12 months following a Change in Control (5) | 877,009 | 321,570 | 55,956 | 59,637 | | Termination for cause | — | — | — | 58,637 | | Guy Goodwin | Notice of immediate termination by the Company without cause | 111,584 | — | — | 44,633 | | Notice by the Company or employee to terminate and the employee is on garden leave | 111,584 | — | — | — | | Termination by the Company or by the employee in response to a fundamental breach of contract by the Company within 12 months following a Change in Control(5) | 446,335 | 64,572 | — | 44,633 | | Termination for cause | — | — | — | 44,633 | | Ekaterina Malievskaia | Notice of immediate termination by the Company without cause | 309,525 | — | — | 41,270 | | Notice by the Company or employee to terminate and the employee is on garden leave | 309,525 | — | — | — | | Termination by the Company or by the employee in response to a fundamental breach of contract by the Company within 12 months following a Change in Control(5) | 412,700 | 231,800 | 24,635 | 41,270 | | Termination for cause | — | — | — | 41,270 |
(1) The vesting offollowing table sets forth information concerning the outstanding equity awards is only accelerated in the event of termination at the discretionheld by each of the administrator.named executive officers as of December 31, 2022:
(2) In | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | Stock Awards | | | | | | | | | | | Market | | | | | | | | | Number of | | Value of | | Number of Securities | | | | | Shares or | | Shares or | | Underlying Unexercised | | Option | | | Units That | | Units That | | Options | | Exercise | | Option | Have Not | | Have Not | | Exercisable | | Unexercisable | | Price | | Expiration | Vested | | Vested | | Name | (#) | | (#) | | ($) | | Date | (#) | | ($) (1) | | Kabir Nath (2) | — | | 600,000 | | 14.94 | | 7/31/2032 | | | | | (5) | | | | | | | | 50,000 | | 401,500 | | George Goldsmith (3) | 63,900 | | 49,700 | | 17.00 | | 9/18/2030 | | | | | (4) | 36,042 | | 136,958 | | 15.75 | | 1/31/2032 | | | | | (6) | | | | | | | | 19,561 | | 157,075 | | (7) | | | | | | | | 29,000 | | 232,870 | | Matthew Owens (8) | — | | 100,000 | | 15.75 | | 1/31/2032 | | | | | (9) | | | | | | | | 12,400 | | 99,572 | | Ekaterina Malievskaia (3) | 47,925 | | 37,275 | | 17.00 | | 9/18/2030 | | | | | (4) | 15,625 | | 59,375 | | 15.75 | | 1/31/2032 | | | | | (6) | | | | | | | | 19,561 | | 157,075 | | (7) | | | | | | | | 13,000 | | 104,390 |
(1) Market value has been computed in accordance with SEC rules as the eventnumber of immediate termination without causeunvested shares or units multiplied by the Company,closing price per share of our ADSs on The Nasdaq Global Select Market as of December 30, 2022 ($8.03). (2) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is August 1, 2022. This grant was awarded outside the 2020 Plan pursuant to the inducement grant exception under Nasdaq Listing Rule 5635(c). (3) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is September 18, 2020. This grant was made under the 2020 Plan. (4) Options vest over a 4 year service period in 48 equal monthly installments, subject to continued service through each applicable vesting date. The vesting commencement date is February 1, 2022. This grant was made under the 2020 Plan. (5) The restricted share units vest in four equal annual installments, subject to continued service through each applicable vesting date. The vesting commencement date is August 1, 2022. This grant was made under the 2020 Plan. (6) The restricted share units are subject to 25% vesting upon the earlier of (i) the one year anniversary of the date of grant, or if(ii) the executive orfirst day following the six-month anniversary of the listing of the Company terminate’s ordinary shares on any stock exchange on which the executive’s employment,closing price of the shares is 20% higher than the listing price for at least five consecutive trading days. They vest quarterly thereafter over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is August 12, 2021. This grant was made under the 2017 Plan. (7) The restricted share units vest in four equal annual installments, subject to continued service through each applicable vesting date. The vesting commencement date is February 1, 2022. This grant was made under the 2020 Plan. (8) Options vest over a 4 year service period with 25% of the award vesting on the first anniversary of the commencement date and assuming the executivebalance vesting monthly over the remaining three years, subject to continued service through each applicable vesting date. The vesting commencement date is placed on garden leave forFebruary 1, 2021. This grant was made under the full2020 Plan. (9) The restricted share units vest in four equal annual installments, subject to continued service through each applicable notice period, (i) Mr. Goldsmith and Dr. Malievskaia are each entitled to nine months’ salary and (ii) Dr. Goodwinvesting date. The vesting commencement date is entitled to three months salary.February 1, 2022. This grant was made under the 2020 Plan.
(3) Benefits received byPAY VERSUS PERFORMANCE
The following table shows the total compensation for each of our principal executive officers (each a "PEO") and the average compensation for our other named executive officers during the last two fiscal years ended December 31, 2022 and 2021 compared to our net income and total shareholder return for the last two fiscal years.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Year | Summary Compensation Table Total for First PEO(1) | Summary Compensation Table Total for Second PEO(2) | Compensation Actually Paid to First PEO(1)(4) | Compensation Actually Paid to Second PEO(2)(5) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers(3) | Average Compensation Actually Paid to Non-PEO Named Executive Officers(3)(6) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return | Net Income | | (a) | (b) | (b) | (c) | (c) | (d) | (e) | (f) | (g) | | 2022 | 2,977,030 | 7,643,576 | 786,153 (4) | 3,848,172 (4) | 1,659,322 | 639,499 (4) | 47 | (91,505,000) | | 2021 | 943,524 | — | (2,553,688) (5) | — | 1,215,021 | (1,893,965) (5) | 130 | (71,742,000) |
(1) Mr. Goldsmith served as our PEO throughout 2021 and Dr.during 2022 until July 31, 2022. (2) Mr. Nath served as our PEO beginning on August 1, 2022.
(3) For fiscal 2022, our non-PEO named executive officers were Matthew Owens and Ekaterina Malievskaia. For fiscal 2021, our non-PEO named executive officers were Ekaterina Malievskaia, upon termination relates to health insurance. Dr.Guy Goodwin, does not participate in our benefits plan.Piers Morgan (our former Chief Financial Officer) and Nate Poulsen (our former General Counsel).
(4) Assumes each Named Executive Officer has 26 accrued but untaken holidays. InThe 2022 compensation actually paid to our PEO and the event any Named Executive Officer ceasesaverage compensation actually paid to be an employeeour non-PEO named executives reflects the following adjustments from total compensation reported in the Summary Compensation Table:
| | | | | | | | | | | | | First PEO | Second PEO | Average of Non-PEO's | | Total compensation reported in the Summary Compensation Table | 2,977,030 | 7,643,576 | 1,659,322 | | Deduct the equity compensation reported in the Summary Compensation Table in column (Stock Awards) and column (Option Awards), | (2,150,660) | (7,177,631) | (1,061,051) | | Add year end fair value all awards granted during 2022 that are outstanding and unvested as of the end of the fiscal year; | 881,954 | 3,382,227 | 476,050 | | Add change in fair value (from prior year-end) of prior year equity awards that are unvested and outstanding | (854,742) | — | (354,936) | | Add for awards that were granted and vested in 2022, the fair value as of the vesting date | 264,337 | — | 57,296 | | Add the change in fair value (from prior year-end to vesting date) of prior year equity awards that vested in the 2022 | (331,766) | — | (137,183) | | Compensation Actually Paid for Fiscal Year 2022 | 786,153 | 3,848,172 | 639,498 |
(5) The 2021 compensation actually paid to our first PEO and the average compensation actually paid of our non-PEO named executives reflects the following adjustments from total compensation reported in the Summary Compensation Table:
| | | | | | | | | | First PEO | Average of Non-PEO's | | Total compensation reported in the Summary Compensation Table | 943,524 | 1,215,022 | | Deduct the equity compensation reported in the Summary Compensation Table in column (Stock Awards) and column (Option Awards), | — | (485,111) | | Add year end fair value all awards granted during 2021 that are outstanding and unvested as of the end of the fiscal year; | — | 353,522 | | Add change in fair value (from prior year-end) of prior year equity awards that are unvested and outstanding | (2,691,551) | (1,331,837) | | Add for awards that were granted and vested in 2021, the fair value as of the vesting date | — | — | | Add the change in fair value (from prior year-end to vesting date) of prior year equity awards that vested in 2021 | (785,661) | (385,451) | | Subtract for any awards granted in any prior fiscal year that fail to meet the applicable vesting conditions during 2021, the amount equal to the fair value at the end of the prior fiscal year | — | (1,260,109) | | Compensation Actually Paid for Fiscal Year 2021 | (2,533,688) | (1,893,964) |
Analysis of the Company, regardlessInformation Presented in the Pay Versus Performance Table
We generally seek to incentivize long-term performance, and therefore do not specifically align our performance goals with “compensation actually paid” (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the reason,relationships between information presented in the Pay Versus Performance table. Since our second PEO was not employed during 2021, he or she would be entitledis not included in either of the below comparisons.
Compensation Actually Paid and Net Loss
As a clinical-stage company primarily focused on research and development of novel therapies to paymenttreat series mental health conditions, our company has not historically utilized net income (loss) as a performance measure for any accrued but untaken holiday equalour executive compensation program. From 2021 to 1/260th of his or her salary for each day. If either party has served notice2022, our net loss increased and the compensation actually paid to terminate, the Company may require theour first PEO and named executive to take any accrued but unused holiday entitlement during the notice period. Any accrued but unused holiday entitlement shall be deemed to be taken during any period of garden leave. (5) In the event the executive’s employment is terminated by the Company or by the employee in response toofficers as a fundamental breach of contract by the Company within 12 months following a change in control, (a) Mr. Goldsmith is entitled to 18 months salary, his pro rated bonus and an amount equivalent to the cost to the Company of providing Mr. Goldsmith with 18 months of employment benefits, (b) Dr. Goodwin is entitled to 12 months’ salary, his pro rated bonus and an amount equivalent to the cost to the Company of providing Mr. Goldsmith with 12 months of employment benefits, and (c) Dr. Malievskaia is entitled to 12 months’ salary, her pro rata bonus, and (c) an amount equivalent to the cost to the Company of providing Dr. Malievskaia with her other employment benefits for 12 months.group (excluding our PEOs) also increased between those years.
Each
Compensation Actually Paid and TSR
As shown in the following graph, the compensation actually paid to our first PEO and the average amount of Mr. Poulsen and Mr. Morgan were no longer servingcompensation actually paid to our named executive officers as a group (excluding our First PEO) during the periods presented are negatively correlated. As discussed above in "Executive Compensation - Primary Elements of Compensation Program" we use a combination of short-term cash incentive compensation opportunities for our named executive officerofficers, in the form of annual cash bonuses to incentivize and award delivery of the Company atCompany’s strategy and corporate objectives, and long-term equity incentive compensation consisting of share options, which provide value only if the endmarket price of fiscal year 2021. Additionally, since Mr. Poulsen did not breach anyour shares increases and if the executive officer continues in our employment over the vesting period, and restricted share units, which provide value only if the executive officer continues in our employment over the vesting period. These equity awards strongly align our executive officers’ interests with those of hisour shareholders by providing a continuing obligations through his termination date, he received $892,500 (an amount equalfinancial incentive to nine monthsmaximize long-term value for our shareholders and by encouraging our executive officers to continue in our employment for the long-term.
Mr. Morgan did not receive any termination related payments in connection with his voluntary termination of employment with the Company.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS Equity Compensation Plans Table The following table sets forth information as of December 31, 20212022 regarding ordinary shares that may be issued under our equity compensation plans: | | | | | | | | | | | | | Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (#) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights ($) (1) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column) (3) | Equity Compensation Plans Approved by Security Holders (2) | 3,195,503 (4) | 13.53 | 1,260,865 | | Equity Compensation Plans not Approved by Security Holders | — | — | — | | Total | 3,915,503 | 13.53 | 1,260,865 |
| | | | | | | | | | | | | Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (#) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights ($) (1) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column) (3)(4) | Equity Compensation Plans Approved by Security Holders (2) | 4,492,732 | $12.08 | 1,390,436 | Equity Compensation Plans not Approved by Security Holders(5) | 600,000 | $1.78 | — | | Total | 5,092,732 | $13.85 | 1,390,436 |
(1) The weighted average exercise price is calculated based solely on outstanding share options. (2) Includes the following plans: our 2020 Plan, our 2017 Plan and our Employee Stock Purchase Plan (“ESPP”). (3) The Company initially reserved 2,074,325 of its ordinary shares for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by up to 4% of the outstanding number of ordinary shares on the immediately preceding December 31, or such lesser number of shares as determined by our Compensation and Leadership Development Committee. This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. The total number of ordinary shares that may be issued under the 2020 Plan was 2,074,3253,755,120 shares as of December 31, 2021,2022, of which 406,737 667,802shares remained available for future grant. As of December 31, 2021, the Company was authorized under the shareholder agreements to issue a total of 13,601,246 ordinary shares, including shares underlying options granted pursuant to the 2017 Plan. Forfeitures are accounted for as they occur. As of December 31, 2021, there were 514,075 shares available for issuance as incentives to the Company’s employees and directors, which includes shares underlying options that may be granted from time to time subsequent to December 31, 2021 under the terms of the 2017 Plan.
The ESPP initially reserves and authorizes the issuance of up to a total of 340,053 ordinary shares to participating employees. The ESPP provides that the number of shares reserved and
available for issuance will automatically increase each January 1, beginning on January 1, 2022 and each January 1 thereafter through January 1, 2022, by the lesser of (i) 1% of the outstanding number of ordinary shares on the immediately preceding December 31 or (ii) 510,058 ordinary shares. The number of shares reserved under the ESPP is subject to change in the event of a share split, share dividend or other change in our capitalization. On October 1, 2021, the Company launched the Share Incentive Plan and the ESPP, through which employees can purchase shares at a discounted price. At the end of each six months,month purchase period, shares will automatically be purchased at the lower of the opening and closing price of the shares for the savingpurchase period minus a 15% discount.
(4) Amount does not include any purchase rights accruing under the ESPP during the current purchase period, which commenced on OctoberNovember 1, 2021,2022, because the purchase right (and therefore the number of shares to be purchased) will not be determined until the end of the purchase period on March 31, 2022.April 30, 2023.
(5) On August 1, 2022, we granted a non-qualified share option to purchase an aggregate of 600,000 shares to Mr. Nath in connection with his appointment as Chief Executive Officer. In accordance with Nasdaq Listing Rule 5635(c)(4), the non-qualified share option award was approved by Compensation and Leadership Development Committee and made as a material inducement to Mr. Nath’s entry into employment as our new Chief Executive Officer. The non-qualified share option has a 10-year term and vests as to one-fourth on August 1, 2023 (the first anniversary of his employment commencement date) and as to the remaining three-fourths in equal monthly installments over the following 36 months, subject to Mr. Nath remaining an employee on the applicable vesting dates. The non-qualified share option has other terms that mirror those of non-qualified share options granted under our 2020 Plan and the standard form of non-qualified share option agreement.
AUDIT AND RISK COMMITTEE REPORT The Audit and Risk Committee oversees the accounting and financial reporting processes of COMPASS Pathways plc (the “Company”) and the audits of the Company’s financial statements, evaluates auditor performance, manages relations with the Company’s independent registered public accounting firm and evaluates policies and procedures relating to internal control systems. The Audit and Risk Committee operates under a written Audit and Risk Committee charter that has been adopted by the Board of Directors of the Company (the “Board”). All members of the Audit and Risk Committee currently meet the independence and qualification standards for audit committee membership set forth in the listing standards provided by Nasdaq and the U.S. Securities and Exchange Commission (“SEC”), and the Board has determined that Annalisa Jenkins and Linda McGoldrick are “audit committee financial experts,” as the SEC has defined that term in Item 407 of Regulation S-K. The Audit and Risk Committee members are not professional accountants or auditors. The members’ functions are not intended to duplicate or to certify the activities of management and the independent registered public accounting firm. The Audit and Risk Committee serves a board-level oversight role in which it provides advice, counsel and direction to management and the auditors on the basis of the information it receives, discussions with management and the auditors, and the experience of the Audit and Risk Committee’s members in business, financial and accounting matters. The Audit and Risk Committee oversees the Company’s financial reporting process on behalf of the Board. The Company’s management has the primary responsibility for the financial statements and reporting process, including the Company’s system of internal controls. In fulfilling its oversight responsibilities, the Audit and Risk Committee reviewed with management the audited financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021.2022. This review included a discussion of the quality and the acceptability of the Company’s financial reporting, including the nature and extent of disclosures in the financial statements and the accompanying notes. The Audit and Risk Committee also reviewed the progress and results of the testing of the design and effectiveness of its internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002. The Audit and Risk Committee also reviewed with PricewaterhouseCoopers LLP (“PwC”), our independent registered public accounting firm, which is responsible for expressing an opinion on the conformity of the audited financial statements with accounting principles generally accepted in the United States of America, their judgments as to the quality and the acceptability of the Company’s financial reporting and such other matters as are required to be discussed with the Committee by Public Company Accounting Oversight Board (“PCAOB”) AU 380, Communications with Audit Committees, and SEC Regulation S-X Rule 207, Communication with Audit Committees. The Audit and Risk Committee has received the written disclosures and the letter from PwC required by the applicable requirements of the PCAOB regarding PwC’s communications with the audit committee concerning independence. The Audit and Risk Committee has discussed with PwC its independence from management and the Company. In addition to the matters specified above, the Audit and Risk Committee discussed with PwC the overall scope, plans and estimated costs of their audit. The Audit and Risk Committee met with PwC periodically, with and without management present, to discuss the results of PwC’s examinations, the overall quality of the Company’s financial reporting and PwC’s reviews of the quarterly financial statements, and drafts of the quarterly and annual reports. Based on the reviews and discussions referred to above, and subject to the limitations of the Audit and Risk Committee’s role and responsibilities referred to above and in the Audit and Risk Committee charter, Audit and Risk Committee recommended to the Board that the Company’s audited financial statements should be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 20212022 for filing with the SEC.
| | | | | The Audit and Risk Committee of the Board | | Linda McGoldrick, Chair Annalisa Jenkins Robert McQuade |
The information contained in this Audit and Risk Committee report shall not be deemed to be “soliciting material,” “filed” with the SEC, subject to Regulations 14A or 14C of the Exchange Act, or subject to the liabilities of Section 18 of the Exchange Act. No portion of this audit and risk committee report shall be deemed to be incorporated by reference into any filing under the Securities Act, or the Exchange Act, through any general statement incorporating by reference in its entirety the proxy statement in which this report appears, except to the extent that we specifically incorporate this report or a portion of it by reference. In addition, this Audit and Risk Committee report shall not be deemed filed under either the Securities Act or the Exchange Act.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table and related footnotes set forth information with respect to the beneficial ownership of our ordinary shares, as of April 19, 2022,4, 2023, by: •each beneficial owner of more than 5% of our ordinary shares; •each of our named executive officers and directors; and •all of our current executive officers and directors as a group. Beneficial ownership is determined in accordance with the rules and regulations of the SEC. Under these rules, beneficial ownership includes any shares as to which a person has sole or shared voting power or investment power. In computing the number of ordinary shares beneficially owned by a person and the percentage ownership of that person, ordinary shares subject to options, or other rights held by such person that are currently exercisable or will become exercisable within 60 days of April 19, 20224, 2023 are considered outstanding. These ordinary shares, however, are not included in the computation of the percentage ownership of any other person. Applicable percentage ownership is based on 42,511,35745,343687 ordinary shares outstanding as of April 19, 2022.4, 2023. Unless otherwise indicated, addresses of the directors, executive officers and named beneficial owners are in care of COMPASS Pathways plc, 3rd Floor, 1 Ashley Road, Altrincham, Cheshire WA14 2DT, United Kingdom.
| | | | | | | | | | | | | | | | | Ordinary Shares Beneficially Owned | | Name of Beneficial Owner | | Number | | Percent | | Greater than 5% Shareholders | | | | | ATAI Life Sciences AG(1) | | 9,435,758 | | 19.74% | George Goldsmith(2) | | 4,345,249 | | 10.20% | Ekaterina Malievskaia(3) | | 4,324,653 | | 10.16% | | Named Executive Officers and Directors | | | | | George Goldsmith(2) | | 4,345,249 | | 10.20% | Piers Morgan(4) | | 206,382 | | * | Nate Poulsen(5) | | 12,570 | | * | Guy Goodwin(6) | | 3,750 | | * | Ekaterina Malievskaia(3) | | 4,324,653 | | 10.16% | | Jason Camm | | — | | * | Annalisa Jenkins(7) | | 118,720 | | * | Thomas Lönngren(8) | | 124,584 | | * | David Norton(9) | | 133,650 | | * | Linda McGoldrick(10) | | 9,443 | | * | Robert McQuade(11) | | 1,602,771 | | 3.77% | Wayne Riley(12) | | 7,000 | | * | All Current Executive Officers and Directors as a Group (12 persons)(13) | | 10,669,820 | | 24.85% |
| | | | | | | | | | | | | | | | | Ordinary Shares Beneficially Owned | | Name of Beneficial Owner | | Number | | Percent | | Greater than 5% Shareholders | | | | | ATAI Life Sciences AG(1) | | 9,435,758 | | 20.81% | George Goldsmith(2) | | 4,419,691 | | 9.72% | Ekaterina Malievskaia(3) | | 4,371,525 | | 9.62% | | Named Executive Officers and Directors | | | | | George Goldsmith(2) | | 4,419,691 | | 9.72% | Kabir Nath(4) | | 12,825 | | * | Michael Falvey(5) | | 56,875 | | * | Guy Goodwin(6) | | 3,750 | | * | Ekaterina Malievskaia(3) | | 4,371,525 | | 9.62% | Matthew Owens(7) | | 40,063 | | * | Annalisa Jenkins(8) | | 138,217 | | * | Thomas Lönngren(9) | | 151,970 | | * | David Norton(10) | | 153,147 | | * | Linda McGoldrick(11) | | 26,389 | | * | Robert McQuade(12) | | 1,620,167 | | 3.57% | Wayne Riley(13) | | 13,000 | | * | All Current Executive Officers and Directors as a Group (12 persons)(14) | | 11,072,004 | | 23.99% |
* Represents beneficial ownership of less than one percent.
(1) Based solely on a Schedule 13G/13D/A filed with the SEC by ATAI Life Sciences AG (“ATAI AG”) and ATAI Life Sciences N.V. (“ATAI N.V.”) on December 1, 2021. Consists of 9,435,758 ordinary shares owned by ATAI AG, a wholly-owned subsidiary of ATAI N.V. ATAI Life Sciences N.V. and ATAI Life Sciences AG both hold shared voting and dispositive power over 9,435,758 shares. ATAI Life Sciences AG is a German public limited company. Its address is Barer Straße 7, 80333 München, Germany. (2) Represents (i) 4,278,3394,280,702 ordinary shares, (ii) 2,7942,795 ordinary shares issuable upon the settlementvesting of RSUs releasable within 60 days of April 19, 20224, 2023 and (ii) 64,116136,194 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 4, 2023. Mr. Goldsmith and Dr. Malievskaia are married
but they expressly disclaim beneficial ownership of each other’s shares in the Company. Pursuant to the terms of call option agreements dated May 19, 2022.2020, as amended and restated on July 21, 2020, as further amended and restated on September 9, 2020, and as further amended effective February 15, 2023, Lars Christian Wilde, a former co-founder of the Company, has an option to purchase 776,565 of our ordinary shares for an exercise price of less than £0.01 per share from each of Mr. Goldsmith and Dr. Malievskaia, exercisable at any time following our initial public offering until September 9, 2033. (3) Represents (i) 4,278,512 ordinary shares, (ii) 2,795 ordinary shares issuable upon vesting of RSUs within 60 days of April 4, 2023 and (iii) 90,218 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 4, 2023. Mr. Goldsmith and Dr. Malievskaia are married but they expressly disclaim beneficial ownership of each other’s shares in the Company.
(3) Represents (i) 4,278,335call option agreements dated May 19, 2020, as amended and restated on July 21, 2020, as further amended and restated on September 9, 2020, and as further amended effective February 15, 2023, Lars Christian Wilde, a former co-founder of the Company, has an option to purchase 776,565 of our ordinary shares (ii) 2,794 ordinary shares issuable upon the settlementfor an exercise price of RSUs releasable within 60 daysless than £0.01 per share from each of April 19, 2022Mr. Goldsmith and (iii) 43,524Dr. Malievskaia, exercisable at any time following our initial public offering until September 9, 2033.
(4) Represents 12,825 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022. Mr. Goldsmith and Dr. Malievskaia are married but they expressly disclaim beneficial ownership of each other’s shares in the Company.4, 2023. (4)
(5) Represents (i) 150,382 ordinary shares and (ii) 56,00056,875 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022.4, 2023. (5) Represents 12,570 ordinary shares.
(6) Represents 3,750(i) 2,062 ordinary shares and (ii) 66,073 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022.4, 2023.
(7) Represents (i) 8,9031,407 ordinary shares and (ii) 38,656 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 4, 2023.
(8) Represents (i) 9,970 ordinary shares, (ii) 1,484 ordinary shares issuable upon vesting of RSUs within 60 days of April 4, 2023 and (iii) 126,763 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 4, 2023. (9) Represents (i) 89,049 ordinary shares and (ii) 62,921 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 4, 2023. (10) Represents (i) 9,970 ordinary shares, (ii) 1,484 ordinary shares issuable upon the settlement of RSUs releasable within 60 days of April 19, 20224, 2023 and (iii) 108,333141,693 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022.4, 2023. (8)
(11) Represents (i) 84,049 ordinary shares and (ii) 40,53526,389 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022.4, 2023. (9)(12) Represents (i) 8,9031,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC and (ii) 1,484 ordinary shares issuable upon the settlement of RSUs releasable within 60 days of April 19, 2022 and (iii) 123,26325,490 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022.
(10) Represents 9,443 ordinary shares underlying4, 2023 held by Dr. McQuade. Dr. McQuade holds the share options to purchase ordinary shares fromfor the Company exercisable within 60 days after April 19, 2022.
(11) Represents (i) 1,594,677 ordinary shares held bybenefit of the McQuade Center for Strategic Research and Development LLC and (ii) 8,094 ordinarydisclaims beneficial ownership of any shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022 held by Dr. McQuade.such share options. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares.
(12)(13) Represents 7,00013,000 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 2022.4, 2023.
(13)(14) Represents (i) 10,253,20610,266,349 ordinary shares, (ii) 8,5568,558 ordinary shares issuable upon the settlement of RSUs releasable within 60 days of April 19, 20224, 2023 and (iii) 408,058797,097 ordinary shares underlying options to purchase ordinary shares from the Company exercisable within 60 days after April 19, 20224, 2023 held by our current officers and directors.
DELINQUENT SECTION 16(a) REPORTS
Under Section 16(a) of the Exchange Act, directors, executive officers, our principal accounting officer and beneficial owners of 10% or more of our common stock, or reporting persons, are required to report to the SEC on a timely basis the initiation of their status as a reporting person and any changes with respect to their beneficial ownership of our common stock. Based solely on our review of copies of such forms that have been filed with the SEC, or written representations from reporting persons, we believe that during the fiscal year ended December 31, 2022, all reporting persons complied with all applicable filing requirements, except with respect to (i) a Form 4 filing made on February 15, 2022 to report grants of share options and restricted share units to Mr. Owens on February 1, 2022, (ii) a Form 3 filing made on February 28, 2022 by ATAI Life Sciences N.V. to report initiation of their status as a reporting person on January 1, 2023, (iii) Form 4 filings made on March 31, 2022 to report grants of restricted share units to each of Mr. Goldsmith and Dr. Malievskaia on February 1, 2022, (iv) a Form 4 filing made on April 6, 2022 to report grants of share options to Mr. Goodwin on February 1, 2022, (v) Form 4 filings made on April 19, 2022 to report grants of share options to each of Mr. Goldsmith and Dr. Malievskaia on February 1, 2022, and (vi) Form 4 filings made on February 3, 2023 to report net withholding of shares to settle taxes upon vesting of restricted stock units held by each of Mr. Goldsmith and Dr. Malievskaia on December 20, 2022.
CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH RELATED PERSONS Other than the compensation arrangements described above under the sections “Director Compensation” and “Executive Compensation Discussion and Analysis” and the transactions described below, in the period from January 1, 2021 through the date of this Proxy Statement, we have engaged in the following transactions with our directors, executive officers or holders of more than 5% of our outstanding share capital and their affiliates, which we refer to as our related parties. AGREEMENTS WITH OUR EXECUTIVE OFFICERS AND DIRECTORS We have entered into employment agreements with our executive officers and service agreements with our non-executive directors. These agreements contain customary provisions and representations, including confidentiality, non-competition, non-solicitation and inventions assignment undertakings by the executive officers. However, the enforceability of the non-competition provisions may be limited under applicable law. FAMILY RELATIONSHIPS George Goldsmith, our Chief Executive Officer and Chairman of our Board Chair, is married to Ekaterina Malievskaia, our Chief Innovation Officer and a member of our Board. On October 5, 2020, Dr. Malievskaia’s son began work with us as Stakeholder Engagement and Operations Associate, and subsequently resigned effective April 16, 2021. As of the date of this Proxy Statement, there were no other family relationships between our executive officers and any of our directors. INSURANCE AND INDEMNIFICATION To the extent permitted by the Companies Act 2006 and in accordance with our Articles of Association, we are empowered to indemnify our directors against any liability they incur by reason of their directorship. Prior to the completion of our IPO, we obtained andWe maintain directors’ and officers’ insurance to insure such persons against certain liabilities. We enteredalso enter into a deed of indemnity with each of our directors and executive officers prior to the completion of our IPO.officers. These agreements and our Articles of Association require us to indemnify our directors and executive officers to the fullest extent permitted by law. RELATED PARTY TRANSACTION POLICY We have adopted a related party transaction policy. This policy became effective on September 17, 2020, the date on which our registration statement on Form F-1 in connection with our IPO was declared effective by the SEC. Pursuant to this policy, the Audit and Risk Committee has the primary responsibility for reviewing and approving or disapproving “related party transactions,” which are transactions between us and related parties in which the related party has a direct or indirect material interest. For purposes of this policy, a related party is defined as a director, executive director, nominee for director, or greater than 5% beneficial owner of any class of our voting securities, and their immediate family members.
DELIVERY OF PROXY MATERIALS Our 2022 Annual Report, on Form 10-K, including audited financial statements, accompanies this Proxy Statement. Copies of our Annual Report on Form 10-K and the exhibits thereto are available from the Company without charge upon written request of a shareholder. Copies of these materials are also available online through the SEC at www.sec.gov. The Company may satisfy SEC rules regarding delivery of proxy materials, including this Proxy Statement and our 2022 Annual Report, by delivering a single set of proxy materials to an address shared by two or more Company shareholders or ADS holders. This delivery method can result in meaningful cost savings for the Company. In order to take advantage of this opportunity, the Company may deliver only a single set of proxy materials to multiple shareholders or ADS holders who share an address, unless contrary instructions are received prior to the mailing date. Similarly, if you share an address with another shareholder or ADS holder and have received multiple copies of our proxy materials, you may write or call us at the address and phone number below to request delivery of a single copy of the proxy materials in the future. We undertake to deliver promptly upon written or oral request a separate copy of the proxy materials, as requested, to a shareholder or ADS holders at a shared address to which a single copy of the proxy materials was delivered. If you are an ordinary shareholder of record and prefer to receive separate copies of proxy materials either now or in the future, please contact Ben Harber, Company Secretary, COMPASS Pathways plc, 3rd Floor, 1 Ashley Road, Altrincham, Cheshire, WA14 2DT, United Kingdom or by telephone at +1 (646) 905-3974. If you hold ADSs and you prefer to receive separate copies of proxy materials either now or in the future, please contact the Depositary, your brokerage firm or bank, as applicable. EACH ORDINARY SHAREHOLDER IS URGED TO COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY FORM. EACH ADS HOLDER IS URGED TO COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ADS PROXY CARD TO CITIBANK, N.A., THE DEPOSITARY FOR THE ADSs.
ADDITIONAL INFORMATION U.K. STATUTORY ANNUAL ACCOUNT AND REPORTS OF THE BOARD OF DIRECTORS AND AUDITORS OF COMPASS PATHWAYS PLC FOR THE YEAR ENDED DECEMBER 31, 20212022 Consistent with its obligations under the U.K. Companies Act 2006, our Board will present at the AGM our U.K. statutory annual accounts and reports for the year ended December 31, 2021,2022, which have been approved by and, where appropriate, signed on behalf of our Board and will be delivered to the Registrar of Companies in the United Kingdom following the AGM. A copy of our U.K. statutory directors’ remuneration report, including the annual report on remuneration, is included as Annex A to this Proxy Statement. A complete copy of our U.K. statutory annual accounts and reports, including the statutory Board of Directors report, strategic report, and auditor’s report on our U.K. accounts will be sent separately to you no less than 21 days prior to the AGM. You will be provided an opportunity to raise questions in relation to such accounts and reports at the AGM. Full accounts and reports will be available for inspection prior to and during the AGM. SHAREHOLDERS' RIGHT TO CALL A GENERAL MEETING Our shareholders have the right to call a meeting of our shareholders. The U.K. Companies Act 2006 generally requires the directors to call a general meeting once we have received requests to do so from shareholders representing at least 5% of our paid-up shares entitled to vote at a general meeting. The U.K. Companies Act 2006 generally prohibits shareholders of a U.K. public limited company from passing written resolutions. However, significant shareholders would, in any case, still have the power to call a general meeting and propose resolutions. These provisions are mandatory under the U.K. Companies Act 2006 and cannot be waived by our shareholders. SHAREHOLDER PROPOSALS Pursuant to Rule 14a-8 under the Exchange Act, in order to be considered for inclusion in our proxy statement for our 20232024 annual general meeting of shareholders, shareholder proposals must be received by the Company at the Office of the Company Secretary, 3rd Floor, 1 Ashley Road, Altrincham, Cheshire, WA14 2DT, United Kingdom no later than 120 days before the anniversary of the date on which we sent our proxy materials for the AGM, or January 11,December 30, 2023. However, if the date of such annual general meeting is more than 30 calendar days from the date of the anniversary of the AGM, then the notice must be received by our Company Secretary a reasonable time before we begin to print and send our proxy materials. To comply with the universal proxy rules, (once effective), shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice at our principal executive offices that sets forth the information required by Rule 14a-19 under the Exchange Act no later than April 17, 2023.3, 2024. We also encourage anyone sending in a shareholder proposal to additionally send such proposals via email AGM@compasspathways.com. Under Section 338 of the U.K. Companies Act 2006, shareholders representing at least 5% of holders entitled to vote on a resolution at an annual general meeting may require the Company to include such resolution in its notice of an annual general meeting. Provided the applicable thresholds are met, notice of the resolution must be received by the Company at the Office of the Company Secretary, 3rd Floor, 1 Ashley Road, Altrincham, Cheshire, WA14 2DT, United Kingdom at least six weeks prior to the date of the annual general meeting, or, if later, at the time notice of the annual general meeting is delivered to shareholders. QUESTIONS? If you have any questions or need more information about the AGM please write to us at: Ben Harber Company Secretary COMPASS Pathways plc 3rd Floor 1 Ashley Road Altrincham Cheshire WA14 2DT United Kingdom
Annex A DIRECTORS’ REMUNERATION REPORT
This part of the Remuneration Report sets out the remuneration policy for the Company. The current Directors’ Remuneration Policy (the “Policy”“Policy”) was approved by shareholders in a binding vote at the AGM held on 22 June 2021. It took effect from the date of approval and applies for a period of three years until 2024. At the 2022 annual general meeting of shareholders, 88.1% of shareholders voted in favour of the proposal to receive and approve, as a non-binding advisory resolution, the U.K. statutory Directors’ Remuneration Report for the year ended 31 December 2021, with 0.1% voted against and 11.8% withheld from such proposal. Key considerations when determining the Policy The Policy was designed by the Committee with a number of specific principles in mind: •attract, retain and motivate high calibre Senior Management and focus them on the delivery of the Company’s strategic and business objectives; •encourage a corporate culture that promotes the highest level of integrity, teamwork and ethical standards; •be competitive against appropriate market benchmarks (being predominantly the US biotech sector) and have a strong link to performance, providing the ability to earn above-market rewards for strong performance; •be simple and understandable, both internally and externally; •encourage increased equity ownership to motivate executives in the overall interests of shareholders, the Company, employees and customers; and •take due account of good governance and promote the long-term success of the Company. In seeking to achieve the above objectives, the Committee is mindful of the views of a broad range of stakeholders in the business and accordingly takes account of a number of factors when setting remuneration including: market conditions; pay and benefits in relevant comparator organizations;organisations; terms and conditions of employment across the Company; the Company’s risk appetite; the expectations of institutional shareholders; and any specific feedback received from shareholders and other stakeholders. During 2020, associated with the Company’s IPO, the Committee determined that it was appropriate to benchmark the salary, bonus and option levels of Senior Management and make necessary adjustments to ensure these remain competitive with UK and US benchmarks. In 2021, the Committee reviewed the peer groups used to benchmark remuneration for Senior Management.
In 2022, the Committee reviewed and updated the peer group used to benchmark remuneration for Senior Management. The directorsDirectors identify any conflicts of interest at the beginning of each boardBoard meeting and the beginning of each Committee meeting. Currently theMr. Goldsmith who served as Chairman and Chief Executive Mr Goldsmith, is alsountil August 2022 and continues to serve as Chairman of the Board, and is married to the Chief Innovation Officer and Executive Director, Dr Malievskaia. The Senior Independent Director, Mr Norton and the Chair of the Compensation and Leadership Development Committee, Dr Jenkins, have assumed the governance role for all matters pertaining to the compensation of Mr Goldsmith and Dr Malievskaia. No conflicts of interest relevant to remuneration have been identified to date. The Policy for Executive Directors CurrentlyDuring 2022 the Company has only twohad three Executive Directors, but the Policy will apply equally to any additional Executive Directors who may be appointed in the future. The Committee annually reviews the operation of the remuneration packages to ensure they are operating within an acceptable risk profile and that they do not inadvertently encourage any economic, social or governance issues.
The total remuneration for the Executive Directors is made up of the following elements: •salary; •benefits; •annual bonus; •long-term incentive awards; and •pension.Pension/401k contribution. Long term incentive awards: The Company adopted the 2020 Share Option Plan, or the 2020 plan and Employee Share Purchase Plan, orthe ESPP, on completion of its Nasdaq IPO in September 2020. On 1 October 2021, the Company launched the Share Incentive Plan (the “SIP”) and the ESPP. The companySince the completion of the Nasdaq IPO, the Company has only issued equity under these two plans since completionand has issued an inducement grant, on such terms as are defined under applicable NASDAQ listing rules, in connection with hiring of its Nasdaq IPO.Mr. Nath as our Chief Executive Officer in 2022. In the period 1 January 2020 to 18 September 2020, the Company granted options under the 2017 Plan.
| | | | | | | Purpose and link to strategy | | Salary | Provides market competitive fixed remuneration that reflects the responsibilities of the role undertaken, the experience of the individual and performance in the role over
time. | | Benefits | Provides market competitive, yet cost-effective employment benefits. | | Annual bonus | To incentivizeincentivise and award delivery of the Company's strategy and corporate objectives
on an annual basis. | | Equity Incentives | To align the interests of Executive Directors and management with long-term shareholder interests and to attract, incentivizeincentivise and retain staff. To incentivizeincentivise and recognizerecognise achievement of longer term corporate objectives and sustained
shareholder value creation. To effectively manage the Group's cash resources. | | Pension | To provide a competitive and tax-efficient pension savings plan which complies with
at least the minimum contributions requirements of the applicable jurisdiction. |
| | | | | | | Operation | | Salary | Reviewed annually taking into account individual responsibilities, experience, performance, inflation and market rates. The Committee will also consider the pay and employment conditions in the wider workforce when determining Executive Directors’ salaries. Where there has been a change in role, or the individual is new to the role, increases could be higher. Salary increases are normally effective from 1 January each year. Salaries are periodically benchmarked against a relevant peer group of biotech companies, most of which are listed on Nasdaq, with others listed on European stock exchanges, with a similar stage of clinical development, and similar
market capitalizationcapitalisation or net assets. | | Benefits | For Executive Directors this includes private medical insurance and life insurance. Other employment benefits may be provided from time to time on similar terms as those of other employees. If an Executive Director is based outside the UK additional benefits and assistance with relocation may be provided which reflect local market norms or legislation. Any reasonable business-related expenses can be reimbursed, including tax there-on. | | Annual bonus | Annual bonus performance targets are set at the start of the year by the Board and performance against objectives is assessed by the Compensation and Leadership Development Committee after the end of the relevant financial year. Bonuses are paid in cash after the award has been approved by the Committee.Committee and, as applicable for the Chief Executive Officer, the Board. | | Equity Incentives | ConditionalLong-term equity incentive awards are granted annually under the 2020 Plan. The awards have time-based vesting conditions and vest over a period of at least three years and may include a mix of share options, restricted share units, performance shares and other awards available for issuance under the 2020 Plan. Awards vest in accordance with the vesting schedule set for the relevant award in its equity agreement.
Under
Executive Directors are eligible to participate in the SIP and ESPP under the same conditions as other employees. The SIP and ESPP generally allow employees to save a portion (up to a specified maximum) of their salary over a six-month savings period and at the end of six months,the savings period, shares will automatically be purchased at the lower of the opening and closing price of the shares for the saving period minus a 15% discount.
The Committee maintains discretion over the types and terms of equity awards granted.
| PensionPension/401(k) | Executive Directors are eligible to join a defined contribution pension scheme. Only base salary is pensionable. Current Executive DirectorsDr Malievskaia and Mr Goldsmith have opted out of pension arrangements.arrangements while Mr Nath receives company 401k contributions. |
| | | | | | | Maximum potential value | | Salary | The current base salary of the Executive Directors is set out in the application of policy section of the Remuneration Report. Whilst there is no prescribed formulaic maximum, any increases will take into account prevailing market and economic conditions and the approach to employee pay throughout the organisation. Base salary increases are awarded at the discretion of the Committee; however, salary increases will normally be no greater than the general increase awarded to the wider workforce, in percentage of salary terms. However, a higher increase may be made where an individual had been appointed to a new role at below-market salary while gaining experience. Subsequent demonstration of strong performance may result in a salary increase which is higher than that awarded to the wider workforce. | | Benefits | The value of each benefit is not predetermined and is typically based upon the cost to the Company of providing said benefit which will vary from year to year based on the cost from third-party providers. | | Annual bonus | The maximum payable to an Executive Director is 125% of the target bonus level for each Executive Director. The target bonus level for the Chief Executive Officer is 60% of base salary (55% in 2021) and Chief Innovation Officer is 55%45% (45% in 2021) of base salary and planned to increase to 60% of base salary in 2022.salary. | | Equity Incentives | The Company initially reserved 2,074,325 of its ordinary shares for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each 1 January, beginning on 1 January 2022, by up to 4% of the outstanding number of ordinary shares on the immediately preceding 31 December, or such lesser number of shares as determined by our Compensation and Leadership Development Committee. This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. capitalisation.
The total number of ordinary shares that may be issued under the 2020 Plan was 2,074,3253,755,120 shares as of 31 December 2021,2022, of which 406,737667,802 shares remained available for future grant.
During the years ended 31 December 31,2022 and 2021, and 2020, the Company granted options to purchase 1,043,7022,120,783 and 3,405,4901,043,702 ordinary shares under the 2020 Plan to employees and non-employees, respectively.
During the year ended 31 December 2022, the Company granted options to purchase 600,000 shares to the Company’s new Chief Executive Officer as an inducement grant, as such term is defined under applicable NASDAQ listing rules. | PensionPension/401(k) | TheFor the pension, the maximum contribution, cash supplement (or combination thereof) payable by the Company is 3% of salary, which is at the same level as the general workforce. For the 401(k) defined contribution plan available to employees, including Executive Directors, in the United States, the Company match is equal to 100% of the amount an employee contributes to the 401(k) plan for each payroll period up to a maximum of 4% of cash compensation earned by such employee. |
| | | | | | | Performance metrics | | Salary | The overall performance of the individual and Company, including against individual performance objectives, is a key determinant for salary increases. | | Benefits | None. | | Annual bonus | ResearchOperational targets related to research and development, business development, financial goals and commercial targetsgoals are discussed with the Compensation and Leadership Development Committee and set at the start of the year by the Board. Details of the performance measures for the current year are provided in the Remuneration Report, subject to any nondisclosure on the basis of commercially-sensitive information. The payment of any bonus is at the absolute discretion of the Committee which has the discretion to override out-turn of the bonus if appropriate to do so, including but not limited to factors such as the underlying financial and operational performance of the Company and individual performance. | | Equity Incentives | Vesting may be on a time-phased basis or subject to performance conditions, as determined at the discretion of the Committee. During the years ended 31 December 2022 and 2021, the Company granted equity awards with time-phased vesting. | PensionPension/401(k) | None. |
The Committee operates the annual bonus and 2020 Plan, in accordance with their rules, and where relevant, the rules and regulations of the U.S. Securities and Exchange Commission and U.S. federal securities laws.NASDAQ listing rules. To maintain an efficient administrative process, the Committee retains the following discretion relating to remuneration: a.the eligibility to participate in the plans; b.the timing of grant of awards and any payments; c.the size of awards and payments (subject to the maximum limits set out in the Policy table above and the respective plan rules); d.the determination of whether any performance conditions have been met; and e.the annual review of performance objectives for the annual bonus plan. In certain exceptional circumstances, such as a material acquisition/divestment of a Group business or a change in the broader business environment, which mean the original performance conditions are no longer appropriate, the Committee may adjust the objectives, alter weightings or set different measures as necessary, to ensure the conditions achieve their original purpose and are not materially less difficult to satisfy. The Directors' service contracts and letters of appointment are kept for inspection at the Company's registered office.Non-Executive Directors are subject to fixed term contracts The Company has a classified Board with each Director serving a three-year term; each Director must seek re-election at the annual general meeting of one, twoshareholders at the end of his or three years. Executive Directors have contracts of indefinite duration.her three-year term.
Historical equity incentive awards Awards which were granted prior to 18 September 18, 2020 are disclosed separately in this Remuneration Report in the Long Term Incentive AwardsStatement of Directors’ Shareholding and Share Interests section. These awards remain eligible to vest, based on their original terms which are described separately in the Directors' Report on Remuneration.Remuneration Report. Annual bonus
The annual bonus is designed to drive the achievement of the Company’s strategic and corporate objectives. These targets are agreed by the Board and selected because of their importance in value creation for shareholders. Objectives are weighted for Executive Directors in proportion to the degree of importance of that objective for the Company. The weightings are agreed by the Committee. Remuneration on recruitment The remuneration package for any new Executive Director will be determined by the Committee in accordance with the terms of the Policy at the time of appointment (including salary, benefits, annual bonus, long-term incentive awards and pension). It is recognised that in order to attract and recruit talented individuals the Policy needs to allow sufficient flexibility with respect to remuneration on recruitment. The following policies apply to the remuneration on recruitment of new Executive Directors: Salary: Base salary will be determined based on the responsibilities of the role, experience of the individual and current market rates. It may be considered necessary to appoint a new Executive Director on or below market rates (e.g. to reflect limited boardBoard experience). In such circumstances, phased increases above those of the wider workforce may be required over an appropriate time period, to bring the salary to the desired market level, subject to the continued development in the role. Annual bonus: The ongoing annual bonus maximum will be in line with that outlined in the policy table for existing Executive Directors, pro-rated to reflect the period of service. Depending on the timing or nature of an appointment it may be necessary to set different initial performance measures and targets for the first year of appointment. Long-term incentive awards: 2020 Plan awards are granted in line with the policy outlined for existing Executive Directors. An award may be made shortly following an appointment. For internal appointments, existing awards will continue on their original terms.
Benefits:Benefits: Benefits provided should be in line with those of existing Executive Directors. For external and internal appointments, where required to meet business needs, reasonable relocation support will be provided. In addition, if it becomes necessary to appoint a new Executive Director from outside the UK, additional benefits may be provided to reflect local market norms or legislation.
Pension:Pension/401k: A company contribution or cash supplement up to the maximum as outlined for existing Executive Directors. Current Executive DirectorsOur Chair and Chief Innovation Officer have opted out of pension arrangements.arrangements while our current Chief Executive Officer receives a company contribution to his 401(k). Any new executives will be offered a pension or 401(k), as applicable, at the same level as the general workforce.
Sign-on payments and buy-out awards:awards: To enable the recruitment of exceptional talent, the Committee may offer additional cash and/or share-based remuneration to take account of and compensate for remuneration that the Executive Director is required to relinquish when leaving a former employer. The Committee will seek to structure any such replacement awards to be no more generous overall in terms of quantum or vesting than the award to be forfeited from the previous employer and will take into account the timing, form and performance requirements of the awards forgone. Where appropriate, any long-term incentive awards will be granted under the 2020 Plan, however, the Committee will have discretion to make use of the flexibility to make awards under any relevant exemptions in the SEC Rules.NASDAQ listing rules. For an internal Executive Director appointment, any variable pay element awarded in respect of the prior role will be allowed to pay out according to its terms. In addition, any other contractual remuneration obligations existing prior to appointment may continue. The fees for any new Chairman and non-Executive Director appointments will be set in accordance with the prevailing policy and at a level that is consistent with those of the existing Chairman and non-Executivenon- Executive Directors. Policy for payments on loss of office
The companyCompany does not have a policy of fixed term employment contracts, however, the Directors are required to retire and are entitled to put themselves forward for re-election at the AGM in accordance with their respective directorDirector class, as prescribed by the Company’s articles of association (“Articles of Association”Association”). The notice period for the existingcurrent Chief Executive Officer’s employment contract is 12 months, for90 days, provided however, that if the Chief Innovation Officer is 9 months, and three months forCompany terminates his employment contract without cause, the existing non-Executive Directors.Chief
Executive Officer is entitled to a cash severance payment equal to one year’s annual salary plus the target annual bonus amount for the year in which such termination occurs, for the Chief Innovation Officer is 9 months, and one months for the existing non- Executive Directors. The Committee’s approach to payments in the event that an Executive Director’s employment is terminated is to take account of the individual circumstances including the reason for termination, individual performance, contractual obligations, potential claims the Executive Director might have against the companyCompany and the terms of the equity incentive plans in which the Executive Director participates. Termination by notice from the Company: up to 12 months’ notice, with the discretion for the Committee to make a payment in lieu of notice for base salary, pension and other benefits that would otherwise have been paid during the notice period. Annual bonus: except for the current Chief Executive Officer who is entitled to his target annual bonus,: there is no automatic contractual entitlement to bonus or pro-rata bonus on termination, although this may be considered at the discretion of the Committee. Long-term incentives:incentives: whether any long-term incentive awards would vest and be exercisable upon loss of office would be subject to the relevant plan rules under which such award was granted. The 2020 Plan allows vesting and exercise of awards in the event of death, retirement, ill-health, injury, redundancy and any other reason at the discretion of the Committee. The Committee retains discretion to determine the extent to which the award will vest, taking into consideration the circumstances. Unvested awards normally lapse, although the Committee retains the power to determine, in accordance with the “good leaver” provisions of the relevant plan rules, what proportion of unvested awards will be retained and what proportion will lapse. In determining this, the Committee will give consideration to the reason for leaving, the extent of achievement of performance objectives at the date of leaving and may decide to pro-rate awards. Change of Control:Control: on a change of control, all unvested awards vest on the date of change of control. Change of control provisions in the Executive Directors’Chief Innovation Officer’s service agreementsagreement provide for a lump sum payment equal to the value of salary, bonus and contractual benefits for 12 months (or 18 months in the case of Mr. Goldsmith) if, within 12 months of the change of control, their employment by the Company is terminated (other than for reason of misconduct and certain other grounds, but including by way of constructive dismissal) less any sums paid by way of notice or payment in lieu of notice.
Additional payments:payments: the Committee reserves the right to make payments it considers reasonable under a settlement agreement, including payment or reimbursement of reasonable legal and professional fees, untaken holiday and any payment for the settlement of potential claims against the Company in the UK or other jurisdictions. Payment or reimbursement of reasonable outplacement fees may also be provided.
The Directors' service contracts are available for inspection at the Company's principal place of business: Fora - Soho 33 Broadwick Street Soho London W1F 0DQ
The Policy forfor the Chairman The Board approves fees payable to the Chairman. The Chairman (who also occupiesoccupied the role of Chief Executive Officer)Officer until August 2022) does not participate in discussions in respect of his own fees. The Policy for the Chief Executive Officer (CEO) The Board approves any compensation paid to the Chief Executive Officer and the Chief Executive Officer does not participate in any discussions relating to his own compensation. The Policy for Non-Executive Directors The Board approves the fees payable to the Company’s non-Executive Directors.
| | | | | | | | | | | | | Remuneration Element | Purpose and link to strategy | Operation and Maximum | Performance Related | | Chair’s fee | To attract and retain a high calibre individual with the requisite experience and knowledge. | The now Chair of the Board, Mr Goldsmith, served part of the year as Chief Executive Officer, is, as noted above, the current Chair of the Board; the Chief Executive Officer doesand did not receive any additional remuneration in respect of his duties as Chair. Executive Chair in 2022. His fee for 2023 was agreed by the Compensation Committee without his participation. Any fees payable in the future will be reviewed by the Committee on a periodic basis against those in similar sized companies to ensure they remain competitive and adequately reflect the time commitments and scope of the role. Any increase in fee levels may be above that of the wider workforce in a particular year to reflect the periodic nature of any review and/or any change in responsibilities/time commitments. The Chair may also receive limited travel and/or hospitality related benefits in connection with the role. The Chair may not receive any consultancy or other payments outside his fee.
| No | | Non-Executive Director fee | To attract and retain high calibre individuals with the requisite experience and knowledge. | The current fee levels are set out in the Non-ExecutiveNon- Executive Director cash fees section of the Remuneration Report. Fees are reviewed on a periodic basis against those in similar sized companies to ensure they remain competitive and adequately reflect the time commitments and scope of the role. A Board fee is paid to each non-Executivenon- Executive Director. Supplemental fees may be paid to the Senior Independent Director and for chairmanship and membership of Committees to recognizerecognise the additional time commitments and responsibilities of these roles. Any increase in fee levels may be above that of the wider workforce in a particular year to reflect the periodic nature of any review and/or any change in responsibilities/time commitments. If business needs arise, non-Executivenon- Executive Directors may also be engaged to provide limited consulting services outside their director responsibilities and receive fees for those services. Non-Executive Directors may also receive limited travel and/or hospitality related benefits in connection with the role. | No | | Non-Executive Director long-term incentive awards | To provide alignment with the interest of shareholders. | The Company has historically awarded share options to all employees and certain Non-Executive Directors in order to align long-term employee interests with those of shareholders, and this will be the case going forward for any new Non-Executive Directors. Notwithstanding anything to the contrary in the 2020 Plan, the value of all Awards awarded under this Plan and all other cash compensation paid by the Company to any Non-Employee Director in any calendar year for services as a Non-Employee Director shall not exceed £750,000. For the purpose of this limitation, the value of any Award shall be its grant date fair value, as determined in accordance with the Accounting Standards Codification (ACS) 718 Compensation – Stock Compensation or successor provision but excluding the impact of estimated forfeitures related to service-based vesting provisions. | No |
Statement of consideration of employees’ pay and remuneration conditions elsewhere in the Group
The Company does not formally consult with employees when drawing up the Policy. However, the Committee is made aware of employment conditions in the wider Group. The same broad principles apply to the Policy both for the Executive Directors and the wider employee population. However, the remuneration for the Executive Directors has a stronger emphasis on variable pay than for other employees. In particular, the following approach is used for the wider employee population in the Group: •Salaries, benefits and pensions are compared to appropriate market rates and set at approximately midmarketmid market level with allowance for role, responsibilities and experience. •When setting salary levels for the Executive Directors, the Committee considers the salary increases provided to other employees. •An annual bonus plan is available to all employees and is based on business and individual performance. Payments under the bonus plan are entirely discretionary.
ANNUAL REPORT ON REMUNERATION Single total figure of remuneration of each Director (audited). The Directors received the following remuneration for the years ended 31 December 31, 20202021 and 2021;2022;
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Base Salary | Bonus | Share-based payments | Other* | Total variable | Total fixed | Total | | | US $ | US $ | US $ | US $ | US $ | US $ | US $ | | George Goldsmith | 2021 | 584,658 | 321,562 | 415,538 | 37,304 | 321,562 | 1,037,500 | 1,359,062 | | 2020 | 453,936 | 234,743 | 567,911 | 34,113 | 234,743 | 1,055,960 | 1,290,703 | | Ekaterina Malievskaia | 2021 | 412,700 | 231,800 | 339,273 | 24,635 | 231,800 | 776,608 | 1,008,408 | | 2020 | 362,287 | 150,403 | 547,627 | 23,708 | 150,403 | 933,622 | 1,084,025 | | David York Norton | 2021 | 62,249 | — | 169,783 | — | — | 232,032 | 232,032 | | 2020 | 16,052 | — | 173,219 | — | — | 189,271 | 189,271 | | Florian Brand1 | 2021 | 13,119 | — | 87,609 | — | — | 100,728 | 100,728 | | 2020 | 10,944 | — | 11,119 | — | — | 22,063 | 22,063 | | Jason Camm2 | 2021 | — | — | (11,764) | — | — | (11,764) | (11,764) | | 2020 | 14,957 | — | 11,119 | — | — | 26,076 | 26,076 | | Annalisa Jenkins | 2021 | 66,032 | — | 169,835 | — | — | 235,867 | 235,867 | | 2020 | 17,511 | — | 176,835 | — | — | 194,346 | 194,346 | | Thomas Lönngren | 2021 | 49,535 | — | 205,092 | — | — | 254,627 | 254,627 | | 2020 | 13,133 | — | 248,321 | — | — | 261,454 | 261,454 | | Robert McQuade | 2021 | 60,529 | — | 166,155 | — | — | 226,684 | 226,684 | | 2020 | 16,052 | — | 11,119 | — | — | 27,171 | 27,171 | | Linda McGoldrick | 2021 | 62,077 | — | 111,116 | — | — | 173,193 | 173,193 | | 2020 | 16,417 | — | 15,609 | — | — | 32,026 | 32,026 | | Wayne Riley3 | 2021 | 38,531 | — | 96,716 | — | — | 135,247 | 135,247 | | 2020 | — | — | — | — | — | — | — | | Total | 2021 | 1,349,430 | 553,362 | 1,749,353 | 61,939 | 553,362 | 3,160,722 | 3,714,084 | | 2020 | 921,289 | 385,146 | 1,762,879 | 57,821 | 385,146 | 2,741,988 | 3,127,135 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Base Salary | Bonus | Share-based payments | Other* | Total variable remuneration | Total fixed remuneration | Total remuneration | | | US $ | US $ | US $ | US $ | US $ | US $ | US $ | | Kabir Nath | 2022 | 243,123 | 145,000 | — | — | 145,000 | 243,123 | 388,123 | | 2021 | — | — | — | — | — | — | — | | George Goldsmith (Executive Chairman) | 2022 | 179,843 | 123,642 | 37,355 | 17,994 | 123,642 | 235,192 | 358,834 | | George Goldsmith (CEO) | 2022 | 311,494 | 171,321 | 52,296 | 22,076 | 171,321 | 385,866 | 557,187 | | 2021 | 584,658 | 321,562 | 846,545 | 37,304 | 321,562 | 1,468,507 | 1,790,069 | | Ekaterina Malievskaia | 2022 | 378,563 | 163,549 | 89,651 | 25,802 | 163,549 | 494,016 | 657,565 | | 2021 | 412,700 | 231,800 | 739,056 | 24,635 | 231,800 | 1,176,391 | 1,408,191 | | David Norton | 2022 | 60,620 | — | 20,426 | — | — | 81,046 | 81,046 | | 2021 | 62,249 | — | 265,031 | — | — | 327,280 | 327,280 | | Florian Brand | 2022 | — | — | — | — | — | — | — | | 2021 | 13,119 | — | — | — | — | 13,119 | 13,119 | | Jason Camm | 2022 | — | — | — | — | — | — | — | | 2021 | — | — | — | — | — | — | — | | Annalisa Jenkins | 2022 | 59,382 | — | 47,601 | — | — | 106,983 | 106,983 | | 2021 | 66,032 | — | 302,913 | — | — | 368,945 | 368,945 | | Thomas Lonngren | 2022 | 45,692 | — | 47,601 | — | — | 93,293 | 93,293 | | 2021 | 49,535 | — | 258,663 | — | — | 308,198 | 308,198 | | Robert McQuade | 2022 | 54,434 | — | — | — | — | 54,434 | 54,434 | | 2021 | 60,529 | — | — | — | — | 60,529 | 60,529 | | Linda McGoldrick | 2022 | 56,290 | — | — | — | — | 56,290 | 56,290 | | 2021 | 62,077 | — | 81,691 | — | — | 143,768 | 143,768 | | Wayne Riley | 2022 | 46,393 | — | — | — | — | 46,393 | 46,393 | | 2021 | 38,531 | — | — | — | — | 38,531 | 38,531 | | Total | 2022 | 1,435,834 | 603,512 | 294,930 | 65,872 | 603,512 | 1,796,636 | 2,400,148 | | 2021 | 1,349,430 | 553,362 | 2,493,899 | 61,939 | 553,362 | 3,905,268 | 4,458,630 |
*Relates to health insurance, life assurance and income protection insurance i) The value of share-based payment awards to Directors is defined as the fairintrinsic value of the shares on the date of grant. For equity awards that vest based on a service condition, the share-based compensation expense is recognized on a straight-line basis over the requisite service period. This was a weighted average value of $18.43 per share in the year (2020: $10.75), meaningshares. The table reflects the total fair value of the options issuedshare-based expense recognised in 2021 was $2 million (2020: 1On May 14, 2021, Florian Brand resigned from the position of Director.
2On February 1, 2021, Jason Camm permanently waived any and all compensation which he was entitled to receive. Shares issued in 2020 were subsequently cancelled in 2021.
3Wayne Riley was appointed as Director, effective from March 31, 2021.2022.
$6 million). Note: the vesting of certain options accelerated upon completion of the IPO in accordance with the option grant terms which resulted in the recognition of a higher share-based compensation expense in 2020.
ii) No Director is currently in receipt of a pension contribution. Each Director is either not entitled to a pension payment or has opted out of receiving it. There are no payments made in lieu of pension entitlement. Illustrations of Base Case, Expected, and Maximum remuneration for the Executive Directors Scenarios (unaudited) The charts set out for illustrative purposes only, what annual remuneration the Company expects the Executive Directors to obtain as a base case, expected and maximum achievement of performance targets with respect to the year ending 31 December 2022.2023. The assumptions used in the calculations are set out below: | | | | | | | | | | 2022 | Chief Executive Officer | Chief Innovation Officer | | US $ | US $ | | Base salary | 585,108 | 413,017 | | Benefits | 37,304 | 24,635 | | FV of RSU's (granted on February 1, 2022) | 456,750 | 204,750 | | Base case | 1,079,162 | 642,402 | | Expected bonus (assumed at 100% of target) | 351,065 | 185,858 | | Expected case | 1,430,227 | 828,260 | | Maximum bonus (paid at 125% of target) | 438,831 | 232,322 | | Maximum bonus case | 1,517,993 | 874,724 | | Effect of 50% share price appreciation on share options (granted on February 1, 2022) | 1,362,375 | 590,625 | | 50% share price appreciation case | 2,880,368 | 1,465,349 |
| | | | | | | | | | | | | 2023 | Chief Executive Officer | Chairman | Chief Innovation Officer | | US $ | US $ | US $ | | Base salary | 594,500 | 96,824 | 370,352 | | Benefits | — | 40,070 | 25,802 | | Fair value of restricted share units (granted on 2 February 2023) | 273,420 | — | 126,945 | | Base case | 867,920 | 136,894 | 523,099 | | Expected bonus (assumed at 100% of target) | 356,700 | — | 166,658 | | Expected case | 1,224,620 | 136,894 | 689,757 | | Maximum bonus (paid at 125% of target) | 445,875 | — | 208,323 | | Maximum bonus case | 1,313,795 | 136,894 | 731,422 |
i)Base case: this illustration assumes fixed base case, as set out above. This illustration assumes no annual bonus; ii)Expected case: this illustration assumes the base case remuneration set out above, plus an annual bonus. We make the assumption that each Executive Director will receive the target annual bonus of 60% (2021: 55%) in the case of the Chief Executive Officer (2021: 60%) and 45% (2021: 45%) in the case of the Chief Innovation Officer of base salary, being $1,430,227$356,700 and $828,260$166,658 respectively; and
iii)Maximum bonus case: this illustration assumes the base case remuneration set out above, plus the maximum annual bonus of 125% x the target bonus percentage of base salary, being $1,517,993
$445,875 for the year in respect of the Chief Executive Officer and $874,724$208,323 for the year in respect of the Chief Innovation Officer. iv)50% share price appreciation case: this illustration assumes the base case remuneration set out above, plus the change in value of share options granted on 1 February 2022, if the share price appreciated by 50%, being $2,880,368 for the year in respect of the Chief Executive Officer and $1,465,349 for the year in respect of the Chief Innovation Officer.
The Group has used the exchange rate $0.7409:$0.8262:£1.00, the rate at 31 December 2021.
Annual performance bonus
In 20212022 the CEO, Executive Chairman (who served as CEO until 1 August 2022) and CIO’s annual bonus outcome of 100% of target for each, resulted in a total bonus pay out for the financial year ended 31 December 20212022 of 55%60% of the CEO’s base salary, 60% of the Executive Chair’s base salary and 45% of the
CIO’s base salary in each case for the period. The CIO was also awarded an additional bonus to increase the effective bonus percentage to 125% of the target. During a series of meetings in January and February 2022,2023, the Compensation and Leadership Development Committee evaluated achievement of the 20212022 corporate objectives and each Executive Director’s individual performance. The Compensation and Leadership Development Committee reviewed the following corporate goals and based on the results approved an overall average 100% achievement level of the 20212022 corporate objectives as the Company achieved its target goals. The goals were as follows: Corporate Goals and Achievements
•COMP360 for TRD: PrepareLaunched a phase III programme in TRD and phase II programmes in PTSD and anorexia nervosa; •Established a robust pipeline of new drug and technology assets to increase the value of COMPASS while demonstrating commitment to transforming mental health; •Prepared for a successful End of Phase IIb meeting and a promptscalable commercial launch of Phase III •Build out a portfolio of new indications for COMP360 new compounds, and technologies that have the potential to improve the safety, efficacy and accessibility of our therapies
•Position COMPASS as a leading mental health care company and fund future plans
•COMP360 for TRD: Prepare for a successful commercial launchtherapy that will ensure access for as many patients as possiblepossible; and
•DevelopDeveloped a talentedhigh-performing team and ana mission-driven organisation that makes rapid growth sustainable for employeescommitted to the highest standards of quality and compliance. Long term incentive awards during the year ended 31 December 2021.2022. During the 20212022 performance year, the Executive DirectorsMr Goldsmith and Ms Malievskaia were not awarded any furtheroptions and restricted share options or RSUs above whatunits ("RSUs") grants on 1 February 2022. Mr Nath was awarded in 2020.options and RSUs upon his hire date 1 August 2022. Payments to past Directors (audited) There were no payments to past Directors made during the financial year ending 31 December 2021 (2020:2022 (2021: nil). Payments for Loss of Office (audited)
There were no payments made to Directors for Loss of Office during the financial year ending 31 December 2021 (2020:2022 (2021: nil) and no such payments have been made in the period between 31 December 20212022 and the date of this report.
Statement of Directors’ Shareholding and Share Interests (audited) The Company does not have a formal policy on Executive or Non-Executive Director shareholdings. The table below details the total number of shares owned (including their beneficial interests), the total number of share options held, the number of share options vested but not yet exercised and the total number of restricted share units ("RSUs") held as at 31 December 20202021 and 31 December 2021,2022, respectively: | | | | | | | | | | | | | | | | | | | | | | | | | Shares | Share options | RSUs | | 2021 | Beneficially owned shares at 31 December 2021 | Total share options at 31 December 2021 | Unvested without performance conditions | Vested but unexercised | Total RSUs at 31 December 2021 | Unvested without performance conditions | Vested but unexercised | | Executive Directors | | George Goldsmith | 4,318,572 | 113,600 | 78,100 | 35,500 | 44,710 | 30,739 | — | | Ekaterina Malievskaia | 4,308,510 | 85,200 | 58,575 | 26,625 | 44,710 | 30,739 | — | | Non-Executive Directors | | David Norton | 127,984 | 147,404 | 26,839 | 120,565 | 23,740 | 16,321 | — | | Florian Brand | — | 5,396 | — | 5,396 | — | — | — | | Jason Camm | — | — | — | — | — | — | — | | Annalisa Jenkins | 113,054 | 132,474 | 26,839 | 105,635 | 23,740 | 16,321 | — | | Thomas Lonngren | 123,919 | 72,095 | 37,225 | 34,870 | — | — | — | | Robert McQuade | 1,600,523* | 33,584 | 27,738 | 5,846 | — | — | — | | Linda McGoldrick | 6,745 | 33,584 | 26,839 | 6,745 | — | — | — | | Wayne Riley | — | 24,000 | 24,000 | — | — | — | — |
*
| | | | | | | | | | | | | | | | | | | | | | | | | Shares | Share options | RSUs | | 2020 | Beneficially owned shares at 31 December 2020 | Total share options at 31 December 2020 | Unvested without performance conditions | Vested but unexercised | Total RSUs at 31 December 2020 | Unvested without performance conditions | Vested but unexercised | | Executive Directors | | George Goldsmith | 4,521,571 | 113,600 | 113,600 | | 44,710 | 44,710 | — | | Ekaterina Malievskaia | 4,521,571 | 85,200 | 85,200 | | 44,710 | 44,710 | — | | Non-Executive Directors | | David York Norton | 113,820 | 135,404 | 21,584 | 113,820 | 23,740 | 23,740 | — | | Florian Brand | — | 21,584 | 21,584 | — | — | — | — | | Jason Camm | 1,300 | 21,584 | 21,584 | — | — | — | — | | Annalisa Jenkins | 113,820 | 135,404 | 21,584 | 113,820 | 23,740 | 23,740 | — | | Thomas Lönngren | 122,227 | 60,095 | 37,906 | 22,189 | — | — | — | | Robert McQuade | — | 21,584 | 21,584 | — | — | — | — | | Linda McGoldrick | — | 21,584 | 21,584 | — | — | — | — |
| | | | | | | | | | | | | | | | | | | | | | | | | Shares | Share options | RSUs | | 2021 | Beneficially owned shares at 31 December 2021 | Total share options at 31 December 2021 | Unvested without performance conditions | Vested but unexercised | Total RSUs at 31 December 2021 | Unvested without performance conditions | Vested but unexercised | | Executive Directors | | George Goldsmith | 4,318,572 | 113,600 | 78,100 | 35,500 | 44,710 | 30,739 | — | | Ekaterina Malievskaia | 4,308,510 | 85,200 | 58,575 | 26,625 | 44,710 | 30,739 | — | | Non-Executive Directors | | David York Norton | 127,984 | 147,404 | 26,839 | 120,565 | 23,740 | 16,321 | — | | Florian Brand | — | 5,396 | — | 5,396 | — | — | — | | Jason Camm | — | — | — | — | — | — | — | | Annalisa Jenkins | 113,054 | 132,474 | 26,839 | 105,635 | 23,740 | 16,321 | — | | Thomas Lönngren | 123,919 | 72,095 | 37,225 | 34,870 | — | — | — | | Robert McQuade | 5,846 | 33,584 | 27,738 | 5,846 | — | — | — | | Linda McGoldrick | 6,745 | 33,584 | 26,839 | 6,745 | — | — | — | | Wayne Riley | — | 24,000 | 24,000 | — | — | — | — |
Includes 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Shares | Share options | RSUs | | | 2022 | Beneficially owned shares at 31 December 2022 | Total share options at 31 December 2022 | Unvested without performance conditions | Vested but unexercised | Total RSUs at 31 December 2022 | Unvested without performance conditions | Vested but unexercised | | | Executive Directors | | | Kabir Nath | — | 600,000 | 600,000 | — | 50,000 | 50,000 | — | | | George Goldsmith | 4,397,499 | 286,600 | 186,658 | 99,942 | 73,710 | 48,561 | — | | | Ekaterina Malievskaia | 4,349,794 | 160,200 | 96,650 | 63,550 | 57,710 | 32,561 | — | | | Non-Executive Directors | | | David Norton | 150,314 | 164,404 | 26,443 | 137,961 | 23,740 | 10,386 | — | | | Annalisa Jenkins | 135,384 | 149,474 | 26,443 | 123,031 | 23,740 | 10,386 | — | | | Thomas Lonngren | 149,137 | 89,095 | 30,894 | 58,201 | — | — | — | | | Robert McQuade | 1,618,818* | 50,584 | 27,342 | 23,242 | — | — | — | | | Linda McGoldrick | 25,040 | 50,584 | 26,443 | 24,141 | — | — | — | | | Wayne Riley | 11,500 | 45,250 | 34,750 | 10,500 | — | — | — | |
*Includes 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares.
The interests of the Directors in the Company’s share options and RSUs as at 31 December 20212022 is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Director | Date of grant | Price per Share ($) | Type | 01/01/2022 | Granted during the year | Exercised during the year | Vested in year | Cancelled during the period | 31/12/2022 | Date from which exercisable | Expiry date | | | Kabir Nath | 01/08/2022 | 14.94 | Option | — | 600,000 | — | — | — | 600,000 | 01/08/2022 | 31/07/2032 | | | 01/08/2022 | 0.01 | RSU | — | 50,000 | — | — | — | 50,000 | 01/08/2022 | 01/08/2026 | | | George Goldsmith | 18/09/2020 | 16.85 | Option | 113,600 | — | — | 28,400 | — | 113,600 | 18/09/2020 | 18/09/2030 | | | 01/02/2022 | 15.75 | Option | — | 173,000 | — | 36,042 | — | 173,000 | 01/02/2022 | 31/01/2032 | | | 30/06/2020 | 0.01 | RSU | 30,739 | — | — | 11,178 | — | 19,561 | 12/08/2020 | 01/08/2024 | | | 01/02/2022 | 0.01 | RSU | — | 29,000 | — | — | — | 29,000 | 01/02/2022 | 01/02/2026 | | | Ekaterina Malievskaia | 18/09/2020 | 16.85 | Option | 85,200 | — | — | 21,300 | — | 85,200 | 18/09/2020 | 18/09/2030 | | | 01/02/2022 | 15.75 | Option | — | 75,000 | — | 15,625 | — | 75,000 | 01/02/2022 | 31/01/2032 | | | 30/06/2020 | 0.01 | RSU | 30,739 | — | — | 11,178 | — | 19,561 | 12/08/2020 | 01/08/2024 | | | 01/02/2022 | 0.01 | RSU | — | 13,000 | — | — | — | 13,000 | 01/02/2022 | 01/02/2026 | | | David Norton | 20/07/2019 | 1.40 | Option | 99,049 | — | — | — | — | 99,049 | 05/05/2018 | 20/07/2029 | | | 30/03/2020 | 2.40 | Option | 14,771 | — | — | — | — | 14,771 | 05/05/2018 | 30/03/2030 | | | 18/09/2020 | 16.85 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 18/09/2020 | 18/09/2030 | | | 01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | | | 16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | | | 30/06/2020 | 0.01 | RSU | 16,321 | — | — | 5,935 | — | 10,386 | 12/08/2020 | 01/08/2024 | | | Annalisa Jenkins | 20/07/2019 | 1.40 | Option | 84,119 | — | — | — | — | 84,119 | 01/06/2018 | 20/07/2029 | | | 30/03/2020 | 2.40 | Option | 14,771 | — | — | — | — | 14,771 | 01/06/2018 | 30/03/2030 | | | 18/09/2020 | 16.85 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 18/09/2020 | 18/09/2030 | | | 01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | | | 16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | | | 30/06/2020 | 0.01 | RSU | 16,321 | — | — | 5,935 | — | 10,386 | 12/08/2020 | 01/08/2024 | | | Thomas Lonngren | 30/03/2020 | 0.01 | Option | 14,771 | — | — | — | — | 14,771 | 18/05/2018 | 30/03/2030 | | | 30/06/2020 | 0.01 | Option | 23,740 | — | — | 5,935 | — | 23,740 | 30/06/2020 | 30/06/2030 | | | 18/09/2020 | 16.85 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 18/09/2020 | 18/09/2030 | | | 01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | | | 16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | | | Robert McQuade | 23/11/2020 | 32.66 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 23/11/2020 | 22/11/2030 | | | 01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | | | 16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | | | Linda McGoldrick | 18/09/2020 | 17.05 | Option | 21,584 | — | — | 5,396 | — | 21,584 | 18/09/2020 | 18/09/2030 | | | 01/10/2021 | 29.87 | Option | 12,000 | — | — | 12,000 | — | 12,000 | 01/10/2021 | 30/09/2031 | | | 16/06/2022 | 9.44 | Option | — | 17,000 | — | — | — | 17,000 | 16/06/2022 | 15/06/2032 | | | Wayne Riley | 31/03/2021 | 35.25 | Option | 24,000 | — | — | 10,500 | — | 24,000 | 31/03/2021 | 30/03/2031 | | | 16/06/2022 | 9.44 | Option | — | 21,250 | — | — | — | 21,250 | 16/06/2022 | 15/06/2032 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Director | Date of grant | Price Per Share ($) | Type | 01/01/2021 | Granted during the year | Exercised during the year | Vested in year | Cancelled during the period | 31/12/2021 | Date from which exercisable | Expiry date | | George Goldsmith | 18/09/2020 | 10.03 | Option | 113,600 | — | — | 35,500 | — | 113,600 | 18/09/2020 | 18/09/2030 | | 30/06/2020 | 10.15 | RSU | 44,710 | — | — | 13,971 | — | 30,739 | 12/08/2020 | 01/08/2024 | | Ekaterina Malievskaia | 18/09/2020 | 10.03 | Option | 85,200 | — | — | 26,625 | — | 85,200 | 18/09/2020 | 18/09/2030 | | 30/06/2020 | 10.15 | RSU | 44,710 | — | — | 13,971 | — | 30,739 | 12/08/2020 | 01/08/2024 | | David York Norton | 20/07/2019 | 1.50 | Option | 99,049 | — | — | — | — | 99,049 | 05/05/2018 | 20/07/2029 | | 30/03/2020 | 4.11 | Option | 14,771 | — | — | — | — | 14,771 | 05/05/2018 | 30/03/2030 | | 18/09/2020 | 10.03 | Option | 21,584 | — | — | 6,745 | — | 21,584 | 18/09/2020 | 18/09/2030 | | 01/10/2021 | 17.43 | Option | — | 12,000 | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | | 30/06/2020 | 10.15 | RSU | 23,740 | — | — | 7,419 | — | 16,321 | 12/08/2020 | 01/08/2024 | | Florian Brand | 23/11/2020 | 19.56 | Option | 21,584 | — | — | — | 21,584 | — | 23/11/2020 | 22/11/2030 | | 14/05/2021 | 18.83 | Option | — | 5,396 | — | 5,396 | — | 5,396 | 14/05/2021 | 22/11/2030 | | Jason Camm | 23/11/2020 | 19.56 | Option | 21,584 | — | — | — | 21,584 | — | 23/11/2020 | 22/11/2030 | | Annalisa Jenkins | 20/07/2019 | 1.50 | Option | 99,049 | — | 14,930 | — | — | 84,119 | 01/06/2018 | 20/07/2029 | | 30/03/2020 | 4.11 | Option | 14,771 | — | — | — | — | 14,771 | 01/06/2018 | 30/03/2030 | | 18/09/2020 | 10.03 | Option | 21,584 | — | — | 6,745 | — | 21,584 | 18/09/2020 | 18/09/2030 | | 01/10/2021 | 17.43 | Option | — | 12,000 | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | | 30/06/2020 | 10.15 | RSU | 23,740 | — | — | 7,419 | — | 16,321 | 12/08/2020 | 01/08/2024 | | Thomas Lönngren | 30/03/2020 | 5.56 | Option | 14,771 | — | — | — | — | 14,771 | 18/05/2018 | 30/03/2030 | | 30/06/2020 | 10.15 | Option | 23,740 | — | — | 5,935 | — | 23,740 | 30/06/2020 | 30/06/2030 | | 18/09/2020 | 10.03 | Option | 21,584 | — | — | 6,745 | — | 21,584 | 18/09/2020 | 18/09/2030 | | 01/10/2021 | 17.43 | Option | — | 12,000 | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | | Robert McQuade | 23/11/2020 | 19.56 | Option | 21,584 | — | — | 5,846 | — | 21,584 | 23/11/2020 | 22/11/2030 | | 01/10/2021 | 17.43 | Option | — | 12,000 | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | | Linda McGoldrick | 18/09/2020 | 10.15 | Option | 21,584 | — | — | 6,745 | — | 21,584 | 18/09/2020 | 18/09/2030 | | 01/10/2021 | 17.43 | Option | — | 12,000 | — | — | — | 12,000 | 01/10/2021 | 30/09/2031 | | Wayne Riley | 31/03/2021 | 21.45 | Option | — | 24,000 | — | — | — | 24,000 | 31/03/2021 | 30/03/2031 |
All options are subject to service rather than performance conditions. The options vestedvest monthly over 4 years with a 1 year 25% cliff for those granted after September 2020 and with a 25% cliff on the earlier of 1 year and IPO for the June 2020 grants. Awards granted in March 2020 vested fully upon IPO.
Awards granted prior to March 2020 had fully vested prior to IPO. RSU awards granted in February 2022 vest 25% per year for 4 years, and the options granted at that time vest monthly over 4 years. Mr Nath’s option grant awards vest over 4 years with a 1 year 25% cliff and his RSU awards vest 25% per year for 4 years. For the Non-Executive Officers, the options awarded on 1 October 2021 vested 100% after one year and the options awarded on 16 June 2022 vest upon the earlier of the one-year anniversary of the date of grant or the date of the 2023 annual general meeting of shareholders.
The beneficial and non-beneficial interests in the Company’s shares of the Directors and their families were as follows: | | | | | | | | | | NAME OF BENEFICIAL OWNER | ORDINARY SHARES BENEFICIALLY OWNED AT 31 December 2021 | | NUMBER | PERCENT | | Directors | | George Goldsmith | 4,318,572 | 10.3% | | Ekaterina Malievskaia | 4,308,510 | 10.3% | | Non-Executive Directors | | David York Norton | 127,984 | * | | | | | Jason Camm | — | — | | Annalisa Jenkins | 113,054 | * | | Thomas Lönngren | 123,919 | * | | Robert McQuade | 5,846 | * | | Linda McGoldrick | 6,745 | * | | Wayne Riley | — | — |
| | | | | | | | | | NAME OF BENEFICIAL OWNER | ORDINARY SHARES BENEFICIALLY OWNED AT 31 DECEMBER 2022 | | NUMBER | PERCENT | | Directors | | George Goldsmith | 4,397,499 | 10.3% | | Ekaterina Malievskaia | 4,349,794 | 10.2% | | Non-Executive Directors | | David Norton | 150,314 | * | | Annalisa Jenkins | 135,384 | * | | Thomas Lonngren | 149,137 | * | | Robert McQuade | 1,618,818** | 3.8% | | Linda McGoldrick | 25,040 | * | | Wayne Riley | 11,500 | * |
*Represents beneficial ownership of less than one percent.
**Includes 1,594,677 ordinary shares held by McQuade Center for Strategic Research and Development LLC. Dr. McQuade, the Officer and Manager of McQuade Center for Strategic Research and Development LLC, may be deemed to have voting and investment power over the shares beneficially owned by McQuade Center for Strategic Research and Development LLC, but he disclaims beneficial ownership of such shares. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission, or SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities and include ordinary shares that can be acquired within 60 days of 31 December 2021.2022. *Represents beneficial ownership of less than one percent.
Total Shareholder Return
The graph below shows the Company’s performance, measured by total shareholder return, for the Company’s American Depositary Shares (“ADSs”ADSs”), which are listed on Nasdaq and each representing one of the Company’s ordinary shares against the Nasdaq Composite Index (Nasdaq: CMPS vs NBI). TheNCI) and the Nasdaq Biotech Index has been(Nasdaq: CMPS vs NBI). We have selected these indices for this comparison because the Company has been admitted to trading on the Nasdaq exchange and it is consideredoperates as a Biotech and we consider them to be the most suitable comparator index.
indices.
Chief Executive Officer total remuneration history
2020 was the first year that the Company prepared a Remuneration Report. We have taken the exemption not to disclose 5 years of history of remuneration and have chosen to disclose remuneration history for 2020 onwards. Percentage change in remuneration of the Executive and Non-Executive Directors
The year on year movement to 31 December 2021 of CEO, CIO and Non-Executive Directors pay versus that of employees is disclosed in the table below. | | | | | | | | | | | | | Change in pay between 31 December 2021 and 31 December 2020 | | Salary | Annual Bonus | Benefits | | CEO % change | 29 | % | 37 | % | 9 | % | | CIO % change | 14 | % | 54 | % | 4 | % | | David Norton | 288 | % | n/a | n/a | | Jason Camm | n/a | n/a | n/a | | Annalisa Jenkins | 277 | % | n/a | n/a | | Thomas Lonngren | 277 | % | n/a | n/a | | Robert McQuade | 277 | % | n/a | n/a | | Linda McGoldrick | 278 | % | n/a | n/a | | Wayne Riley | n/a | n/a | n/a | | Employees % change | 17 | % | 29 | % | 36 | % | | | | |
| | | | | | | | | | | | | Salary | Annual Bonus (1) | Benefits (1) | | CEO % change | 29 | % | 37 | % | 9 | % | | CIO % change | 14 | % | 54 | % | 4 | % | | David Norton (2) | 288 | % | n/a | n/a | | Jason Camm (3) | n/a | n/a | n/a | | Annalisa Jenkins (2) | 277 | % | n/a | n/a | | Thomas Lonngren (2) | 277 | % | n/a | n/a | | Robert McQuade (2) | 277 | % | n/a | n/a | | Linda McGoldrick (2) | 278 | % | n/a | n/a | | Wayne Riley (4) | n/a | n/a | n/a | | Employees % change | 17 | % | 29 | % | 36 | % |
(1)
The year on year movement to 31 December 2022 of CEO, Executive Chairman, CIO and Non-Executive Directors pay versus that of employees is disclosed in the table below. | | | | | | | | | | | | | | | | | | | | | | Change in pay between 31 December 2022 and 31 December 2021 | | | | | Salary | Annual Bonus (1) | Benefits (1) | | | | | CEO % change (2)* | (1) | % | 6 | % | (100) | % | | | | | CEO % change (2)** | (8) | % | (2) | % | 7 | % | | | | | Executive Chairman % change (2) | 100 | % | 100 | % | 100 | % | | | | | CIO % change | (8) | % | (29) | % | 5 | % | | | | | David Norton | (3) | % | n/a | n/a | | | | | Annalisa Jenkins | (10) | % | n/a | n/a | | | | | Thomas Lonngren | (8) | % | n/a | n/a | | | | | Robert McQuade | (10) | % | n/a | n/a | | | | | Linda McGoldrick | (9) | % | n/a | n/a | | | | | Wayne Riley (3) | 20 | % | n/a | n/a | | | | | Employees % change | (37) | % | (27) | % | (19) | % | | | |
*Represents Kabir Nath *Represents George Goldsmith
1.None of the Non-Executive Directors are eligible for an annual bonus and none claimed any benefits during the year. (2)David Norton, Annalisa Jenkins, Thomas Lonngren, Robert McQuade2.During 2022, Kabir Nath joined as our Chief Executive Officer, effective 1 August 2022 and Linda McGoldrick joined the BoardGeorge Goldsmith transitioned to Executive Chair. The remuneration received by Mr. Nath and Mr Goldsmith in 2020 and2022 in respect of their roles as CEO were full annual amounts, therefore for comparison purposes, the remuneration received in 20202022 as CEO was notpro-rated as a full annual amount.result and was compared to Mr. Goldsmith's remuneration for the year ended 31 December 2021.
(3) On 1 February 2021, Jason Camm permanently waived any and all compensation which he was entitled to receive.
(4) 3.Wayne Riley joined the Board in 2021 and the remuneration received in 2021 was not a full annual amount.
4.Year over year decreases in average salary are the result of fluctuations in foreign currency exchange rates and as a result of the hire of additional employees at lower pay bands.
Relative importance of spend on pay
The Committee considers the Company’s research and development expenditure relative to remuneration expenditure for all employees, to be the most appropriate metric for assessing overall spend on pay due to the nature and stage of the Company’s business. Dividend distribution comparators have not been included as the Company has no history of such transactions. The graph below illustrates the gross remuneration to all employees compared to research and development expenditure in 20212022 and in 2020 post IPO (18 September 2020 to 31 December 2021).2021. The Committee notes that research and development expenditure may increase in future years as the Company continues to progress its COMP360 psilocybin therapy into later stage clinical trials for the treatment of TRD and into trials for other indications, as well as developing other neuropsychiatric therapies.
Structure and Role of Committee and Approach to Remuneration Matters The Committee is comprised of Annalisa Jenkins, who chairs the Committee, David York Norton and Wayne Riley. The constitution of the Committee is in compliance with Nasdaq requirements. The members of the Committee are Independent Directors as defined in Rule 10A-310C-1 under the US Securities Exchange Act of 1934.1934 and under applicable NASDAQ listing rules.
It is the Board's belief that good corporate governance is integral to a successful business and the Company finds instructive the standards of corporate governance prescribed by the Corporate Governance Code for Small and Mid-Size Quoted Companies from The Quoted Companies Alliance (the “QCA Code”“QCA Code”). The Board believes that this corporate governance framework is an appropriate guide for the Company, having regard to its size and nature.
The Committee’s approach to remuneration matters is to enable the Company to attract and retain talent, incentivizeincentivise long-term value generation and effectively manage the Company’s cash resources. It is the belief of the Committee that this is best achieved through a greater emphasis on variable rather than fixed remuneration, comprised of a mix of base salary and benefits, along with the flexibility to appropriately reward and incentivizeincentivise with variable pay and longer term incentives, as described within the Policy. When applying the Policy to Executive Directors, the Committee seeks to comply with the QCA Code so far as it is practical to do so, having regard to the size, nature and business requirements of the Company. Operation of the Policy will largely be compliant with the remuneration elements of the QCA Code, but we are aware that in certain instances we will differ from the QCA Code. These instances reflect differences in US market practice when compared to the UK, and the need to balance our governance obligations against the importance of offering competitive remuneration packages in the markets in which we compete and operate. The terms of reference of the Committee can be found on our website at www.compasspathways.com. External advice During the year, the Company engaged Aon Solutions UK Limited (Aon) to support management and the Committee with advice on remuneration matters, in particular peer-group benchmarking of Director and Senior Management remuneration and the grant of long term equity incentives under the 2020 Plan that became effective on the day prior to the listing of our ADSs on Nasdaq. The consultants were appointed by the Committee. The Company also engaged Aon to support management in the valuation of option awards granted under the 2020 Plan. The Committee is satisfied that Aon provides independent and objective advice, as Aon is a leading global professional services firm and the boardBoard confirm no conflicts of interest before each meeting. During 20212022 fees of $76,957 (2020: $82,500)$213,826 (2021: $76,957) were paid to Aon Consulting Inc.Solutions UK Limited (Aon).
Proposed Application of the Policy for the Year Ending 31 December 20222023 CEO remuneration i)Fixed elements of remuneration With effect from 1 January 2022,2023, the base salary of George GoldsmithKabir Nath in his role as Chairman and Chief Executive Officer (CEO) and Executive Director of the Company is £433,500 ($585,108)$594,500 (£491,201) per annum. ii)Variable elements of remuneration - Short-term incentives The target bonus for Mr. GoldsmithNath for the 20222023 performance year will be 60% of base salary. Benchmarking the CEO bonus against peers identified it would be appropriate to increase the target bonus to 60% (2021: 55%). The performance objectives for Mr. GoldsmithNath against which the Committee will determine the annual bonus were approved by the Board in February 2021.2023. The detail behind the performance objectives is currently considered to be commercially sensitive as they relate to the strategy that the Company intends to take with respect to the advancement of the COMP360 clinical development program and the Company’s financial and commercial goals. To the extent that the objectives do not comprise commercially sensitive information, the Company expects to disclose both the objectives and performance against those objectives in next year’s Remuneration Report. iii)Long-term incentive awards Long term incentives for 20222023 were awarded on 12 February 2022.2023. The Company awards share options to all employees in order to align long-term employee interests with those of shareholders. On 2 February 2023, the Company awarded Mr. Nath 153,900 share options and 25,200 restricted share units. Chairman remuneration i)Fixed elements of remuneration
With effect from 1 January 2023, the base salary of George Goldsmith in his role as non- Executive Chairman of the Company is £80,000 ($96,824) per annum. ii)Long-term incentive awards Mr Goldsmith will be awarded 25,500 options at the 2023 AGM for his role as Chairman.
CIO remuneration
i) Fixed elements of remuneration With effect from 1 January 2022,2023, the base salary of Ekaterina Malievskaia in her role as Chief Innovation Officer (CIO) and Executive Director of the Company is £306,000 ($413,017)370,352) per annum. ii) Variable elements of remuneration - Short-term incentives The target bonus for Dr Malievskaia for the 20212023 performance year will be 45% of base salary. The performance objectives for Dr Malievskaia against which the Committee will
determine the annual bonus were approved by the Board in February 2021.2023. The detail behind the performance objectives is currently considered to be commercially sensitive as they relate to the strategy that the Company intends to take with respect to the advancement of the COMP360 clinical development program and the Company’s financial and commercial goals. To the extent that the objectives do not comprise commercially sensitive information, the Company expects to disclose both the objectives and performance against those objectives in next year’s Remuneration Report. iii) Long-term incentive awards Long term incentives for 20222023 were awarded on 12 February 2022.2023. The Company awards share options to all employees in order to align long-term employee interests with those of shareholders.
On 2 February 2023, the Company awarded Dr. Malievskaia 67,500 share options and 11,700 restricted share units.
Chairman and Non-Executive Director fees (audited) Chairman fees GeorgeMr Goldsmith serves as both Chairman and CEO and does not receive any additional remuneration in respect of his role as Chair.chair other than the total amounts disclosed above.
Non-Executive Director cash fees Non-Executive Directors are paid a basic fee. In addition to the basic fee, committee fees may be paid for chairing or membership of a Board committee. Non-Executive Director fees were reviewed in 2021.2022. Non-Executive Directors are eligible to receive the following annual fees:
| | | | | | | | | | | | 2021
($) | 2020
($) | | Annual Retainer for Board Membership*: | | 41,270 | 38,524 | | Additional Annual Retainer for Lead Independent Director: | | 20,635 | 12,841 | | Additional Retainers for Committee Membership: | | | | | Audit and Risk Committee Chair: | | 16,508 | 15,410 | | Audit and Risk Committee member: | | 8,254 | 7,705 | | Compensation and Leadership Development Committee Chair: | | 11,005 | 10,273 | | Compensation and Leadership Development Committee member: | | 5,503 | 5,137 | | Nominating and Corporate Governance Committee Chair: | | 9,630 | 7,705 | | Nominating and Corporate Governance Committee member: | | 4,815 | 3,852 | | Innovation and Research Committee Chair: | | 11,005 | 10,273 | | Innovation and Research Committee member: | | 5,503 | 5,137 |
| | | | | | | | | | | | 2022
($) | 2021
($) | | Annual Retainer for Board Membership*: | | 37,114 | 41,270 | | Additional Annual Retainer for Lead Independent Director: | | 18,557 | 20,635 | | Additional Retainers for Committee Membership: | | | | | Audit and Risk Committee Chair: | | 14,846 | 16,508 | | Audit and Risk Committee member: | | 7,423 | 8,254 | | Compensation and Leadership Development Committee Chair: | | 9,897 | 11,005 | | Compensation and Leadership Development Committee member: | | 4,949 | 5,503 | | Nominating and Corporate Governance Committee Chair: | | 8,660 | 9,630 | | Nominating and Corporate Governance Committee member: | | 4,330 | 4,815 | | Innovation and Research Committee Chair: | | 9,897 | 11,005 | | Innovation and Research Committee member: | | 4,949 | 5,503 |
* for general availability and participation in meetings and conference calls of our Board of Directors, to be paid monthly, pro-rated based on the number of actual days served by the directorDirector during such calendar month. **Year over year decreases in salary are the result of fluctuations in foreign currency exchange rates rather than actual decreases in compensation paid in GBP. Note: Chair and committee member retainers are in addition to retainers for members of the Board of Directors. In accordance with the Company's Articles of Association, Directors are allocated into one of three classes. Each class of directorsDirectors serves a staggered three-year term. At each annual general meeting, the successors of directorsDirectors whose terms then expire will be elected to serve from the time of election and
qualification until the third annual meeting following election. Directors of the class retiring at the annual general meeting shall be eligible for re-appointment by ordinary resolution at such annual general meeting. The Company’s Class I directorsDirectors are David York Norton, Ekaterina Malievskaia and Wayne
Riley, allwhom were re-elected at the 2021 annual general meeting. The Company’s Class II Directors are Kabir Nath (who was appointed in August 2022 and therefore will stand for re-election at the 2023 annual general meeting), Robert McQuade and Thomas Lönngren, each of whom were re-elected at last year's annual general meeting. The Company’s Class II directors are Jason Camm, Robert McQuade and Thomas Lönngren, each of whom shall be eligible for re-appointment at this year's annual general meeting. The Company’s Class III directorsDirectors are Annalisa Jenkins, George Goldsmith and Linda McGoldrick, each of whom shall be eligible for re-electionre- election at the 2023 annual general meeting. Pursuant to our Articles of Association, if the directorDirector eligible for re-election does not seek re-election and no other directorDirector is elected to fill their respective position(s), they shall be re-elected by default if the relevant directorDirector is willing to do so.
Details of Directors’ service contracts or letters of appointment for the year ended 31 December 20212022 are as follows: | | | | | | | | | | Director | Executive/NED | Date of contract | | Kabir Nath | Executive | 01 August 2022 | | George Goldsmith | Executive | 15 September 202001 August 2022 | | Ekaterina Malievskaia | Executive | 17 September 2020 | | David York Norton | NED | 14 September 2020 | | | | Jason Camm | NED | 2 March 2020 | | Annalisa Jenkins | NED | 14 September 2020 | | Thomas Lönngren | NED | 15 September 2020 | | Robert McQuade | NED | 25 March 2021 | | Linda McGoldrick | NED | 14 September 2020 | | Wayne Riley | NED | 31 March 2021 |
The information in this part of the Remuneration Report is not subject to audit. Directors’ Remuneration Policy This remuneration policy was approved by shareholders in a binding vote at the AGM held on 22 June 2021.
Statement of consideration of shareholder views The Compensation and Leadership Development Committee will consider any shareholder feedback received and ongoing shareholder feedback throughout the year, when reviewing and applying the Policy each year.
The broad topics discussed with shareholders in 20212022 include peer groups and appropriate jurisdiction for benchmarking directorsDirectors remuneration.
The guidance from shareholder representative bodies is also considered on an ongoing basis. More specifically,The Committee submits a its U.K. Statutory Directors’ annual report on remuneration for a non-binding, advisory vote of shareholders at its annual general meeting of shareholders. At the 2022 annual general meeting of shareholders, 88.1% of shareholders voted in favor of the proposal to receive and approve, as a non-binding advisory resolution, the U.K. Statutory Directors’ Remuneration Report for the year ended 31 December 2021, with 0.1% voted against and 11.8% withheld from such proposal. Although non-binding, the Compensation and Leadership Development Committee will consult with major shareholdersreview and consider the voting results when proposing any significant changes to the Policy in the future.making future decisions regarding our Director remuneration program. The attendees of the Compensation and Leadership Development Committee meetings in 20212022 were as follows: | | | | | | | Director | Attendance | George Goldsmith | 5 of 5 | | Jason Camm* | 23 of 53 | David York NortonNorton** | 5 of 56 | | Annalisa Jenkins | 56 of 56 | Wayne Riley**Riley | 26 of 26 |
*Jason Camm attended 23 of 3 meetings prior to stepping down from the Board effective 16 June 2022. **David York Norton attended 5 of 6 meetings due to scheduling conflicts. **Wayne Riley attended every meeting after joining the Compensation and Leadership Development Committee.
FORM OF PROXY FOR ORDINARY SHAREHOLDERS
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