CorMedix Inc
For the period ended Dec 31, 2023. Filed Mar 12, 2024.
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FY2023 · Filed Mar 12, 2024
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Item 11. Executive Compensation
DIRECTOR COMPENSATION
Director Compensation in Fiscal 2023
The following table shows the compensation earned by each of our non-employee directors for the year ended December 31, 2023:
| Name | Fees Earned or Paid in Cash ($) | Option Awards(1)(2) ($) | Total ($) |
|---|---|---|---|
| Paulo F. Costa(3) | 65,242 | 69,420 | 134,662 |
| Janet Dillione | 78,000 | 69,420 | 147,420 |
| Gregory Duncan | 72,000 | 69,420 | 141,420 |
| Alan W. Dunton | 72,000 | 69,420 | 141,420 |
| Myron Kaplan | 122,543 | 69,420 | 191,963 |
| Steven Lefkowitz | 93,000 | 69,420 | 162,420 |
| Robert Stewart | 43,587 | 158.995 | 202,582 |
| (1) | The amounts included in this column are the dollar amounts representing the full grant date fair value of each stock option award calculated in accordance with FASB ASC Topic 718 and do not represent the actual value that may be recognized by the directors upon option exercise. For information on the valuation assumptions used in calculating these amounts, see Note 7 to our audited financial statements included in this Annual Report on Form 10-K. |
| (2) | As of December 31, 2023, the number of shares underlying options held by each non-employee director was as follows: 83,750 shares for Mr. Costa; 145,000 shares for Ms. Dillione; 82,500 for Mr. Duncan; 112,500 shares for Dr. Dunton; 126,000 shares for Mr. Kaplan; 108,000 shares for Mr. Lefkowitz; and 39,200 shares for Mr. Stewart. |
| (3) | Effective October 15, 2023, Mr. Costa ceased as a member of the Company’s board of directors. |
Director Compensation Plan
The Board, following the recommendation of the Compensation Committee and, based on advice of Frederic W. Cook & Co., determined that no adjustment was needed with regard to Board and committee cash compensation for 2023.
The 2023 compensation program is set forth below in the table. Each year we make an annual grant of stock options to each non-employee director with respect to 20,000 shares and we make an initial grant of stock options to new non-employee directors with respect to 25,000 shares, prorated as appropriate. On March 5, 2024, the Board approved an increase in the annual and initial grant of stock options to non-employee directors, whereby such directors will receive an annual option grant with respect to 30,000 shares (from 20,000 shares) and new non-employee directors will receive an initial option grant with respect to 30,000 shares (from 25,000 shares). All stock options are subject to continued service on the Board through the vesting date. The exercise price per share of each stock option granted to our non-employee directors is equal to the fair market value of our common stock as determined based upon the closing sales price for our stock on the date of grant.
| Cash ($) · Stock Options (#) | |||
|---|---|---|---|
| Annual Fee | 55,000 | ||
| First Election to Board | 25,000 | (1) | |
| Annual Grant, Prorated in First Year Following Election to the Board | 20,000 | (2) | |
| Additional Annual Fee - Board Chair | 45,000 | ||
| Additional Annual Fee - Audit Chair | 23,000 | ||
| Additional Annual Fee - Compensation Chair | 18,000 | ||
| Additional Annual Fee - Nomination and Governance Chair | 14,000 | ||
| Additional Annual Fee - Audit Committee Non-Chair Members | 10,000 | ||
| Additional Annual Fee - Compensation Committee Non-Chair Members | 7,000 | ||
| Additional Annual Fee - Nomination and Governance Committee Non-Chair Members | 5,000 | ||
| Additional Annual Fee - Strategic Committee Members | 15,000 | ||
| (1) | Vests one third each on the date of grant and the first and second anniversary date of grant. |
| (2) | Vests monthly over one year after the grant date. |
We maintain a Deferred Compensation Plan for Directors, pursuant to which our non-employee directors may defer all of their cash director fees and restricted stock units. Any cash fees due to a participating director will be converted into a number of shares of our common stock by dividing the dollar amount of fees payable by the closing price of our common stock on the date such fees would be payable, and the director’s unfunded account is credited with the shares. The shares that accumulate in a director’s account will be paid to the director on the tenth business day in January following the year in which the director’s service terminates for whatever reason, other than death, in which case the account will be paid within 30 days of the date of death to the designated beneficiary, as applicable. In the event of a change in control of our Company, the director would receive cash in an amount equal to the number of shares in the account multiplied by the fair market value of our common stock on the change in control date, and the payment would be accelerated to five business days after the effective date of the change in control.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information with respect to compensation earned by our Named Executive Officers in the years ended December 31, 2023 and 2022:
| Name and Principal Position · Year · Salary ($) · Stock Awards(1) ($) · Option Awards(1) ($) · Non-equity Incentive Plan Compensation ($) · All Other Compensation ($) · Total ($) | ||||||||
|---|---|---|---|---|---|---|---|---|
| Joseph Todisco | 2023 | 616,962 | -- | 1,388,400 | 401,700 | 52,370 | (2) | 2,459,342 |
| Chief Executive Officer | 2022 | 378,461 | 701,245 | 1,273,500 | 305,760 | 32,223 | 2,691,189 | |
| Matthew David | 2023 | 389,135 | -- | 433,875 | 156,000 | 52,140 | (2) | 1,031,150 |
| Chief Financial Officer | 2022 | 393,462 | -- | 305,900 | 389,485 | 47,697 | 1,136,544 | |
| Erin Mistry(3) | 2023 | 389,577 | -- | 694,200 | 156,800 | -- | 1,240,577 | |
| Executive Vice President and Chief Commercial Officer | ||||||||
| Phoebe Mounts(4) | 2023 | 375,000 | -- | 433,875 | 112,500 | 333,207 | (5) | 1,254,582 |
| Former Executive Vice President and General Counsel and Head of Regulatory, Compliance and Legal | 2022 | 375,000 | -- | 428,260 | 195,075 | 12,146 | 1,010,481 | |
| (1) | The amounts included in this column are the dollar amounts representing the full grant date fair value of each award calculated in accordance with FASB ASC Topic 718 and do not represent the actual value that may be recognized by the Named Executive Officers upon option exercise. |
| (2) | Represents premiums paid by us for health benefits and 401(k) plan employer match. |
| (3) | Ms. Mistry became our Chief Commercial Officer on January 15, 2023. Ms. Mistry was not an executive officer during 2022. |
| (4) | Dr. Mounts’ service as an executive officer ceased on December 12, 2023, but her employment continued through December 31, 2023. |
| (5) | Represents premiums paid by us for health benefits, Dr. Mounts’ 401(k) employer match for 2023, Dr. Mounts’ cash severance and accrued but unpaid paid time off through her termination date. |
Narrative Disclosure to Summary Compensation Table
Employment Agreements with Named Executive Officers
Joseph Todisco
On March 16, 2022, we entered into an employment agreement with Mr. Todisco, our Chief Executive Officer. The term of the employment agreement will automatically renew for additional successive one-year periods on March 16 th of each calendar year, unless either party notifies the other in writing at least 90 days before the expiration of the then-current term that the term will not be renewed. Mr. Todisco is entitled to an annual salary of $618,000 (effective January 2023), and his target annual bonus is 65% of his base salary, with the actual bonus entitlement based on the achievement of specified Company objectives.
Matthew David
On May 11, 2020, we entered into an employment agreement with Dr. David to serve as our Executive Vice President and Chief Financial Officer. The term will automatically renew for additional successive one-year periods on May 11 th of each calendar year, unless either party notifies the other in writing at least 90 days before the expiration of the then-current term that the term will not be renewed. Dr. David is entitled to an annual salary of $390,000 (effective January 2023), and his target annual bonus is 40% of his base salary, with the actual bonus entitlement based on the achievement of specified Company objectives.
Erin Mistry
On January 15, 2023, we entered into an employment agreement with Ms. Mistry to serve as Executive Vice President and Chief Commercial Officer. After the initial three-year term of the employment agreement, the term will automatically renew for additional successive one-year periods, unless either party notifies the other in writing at least 90 days before the expiration of the then-current term that the term will not be renewed. Ms. Mistry receives an annual salary of $392,000, and her target annual bonus is 40% of her base salary, with the actual bonus entitlement based on the achievement of specified Company objectives.
Phoebe Mounts
Until December 12, 2023, Dr. Mounts served as our Executive Vice President and General Counsel and Head of Regulatory, Compliance and Legal and received an annual salary of $375,000, with a target annual bonus of 30% of her base salary, with the actual bonus entitlement based on the achievement of specified Company objectives.
In connection with her departure, the Company and Dr. Mounts entered into a separation agreement which provided for severance benefits, including continued payment of her base salary for nine months, payment of her 2023 target annual bonus, and accelerated vesting of her time-based stock options that were otherwise scheduled to vest on or before the first anniversary of her termination date. For additional information regarding Dr. Mounts’ separation agreement, please see the section titled “Potential Payments on a Qualifying Termination.”
Potential Payments Upon Termination or Change in Control
The following provisions of the employment agreements with our Named Executive Officers are identical except where noted.
In the event that a Named Executive Officer’s employment is terminated during the term of his or her employment agreement by the Company other than for Cause (other than as a result of death or disability), or by the Named Executive Officer for Good Reason (as defined in the employment agreement), the Named Executive Officer will, subject to execution of a general release of claims, be entitled to: (i) a continuation of base salary for a period of nine months; except that Mr. Todisco’s base salary will continue for 12 months (or 18 months if such termination occurs within 24 months following a corporate transaction (as defined in the employment agreement)); (ii) payment on a prorated basis for any target bonus for the year of termination based on the actual achievement of the specified bonus objectives (or in the case of Mr. Todisco only, for 18 months, if such termination occurs within 24 months following a corporate transaction); (iii) subsidized COBRA premiums for up to nine months (or in the case of Mr. Todisco only, for 18 months, if such termination occurs within 24 months following a corporate transaction); and (iv) one year of additional time vesting of the Named Executive Officer’s then-outstanding equity awards (and in the case of Mr. Todisco, accelerated vesting of the restricted stock units granted to him on May 10, 2022), or full vesting if such termination occurs within 24 months following a corporate transaction.
Dr. Mounts’ separation agreement provides for severance benefits consistent with the terms of her employment agreement in connection with a termination without “cause” prior to a corporate transaction. Specifically, in exchange for a general release of claims in favor of the Company and its affiliates, Dr. Mounts’ cooperation with the transition of her position, and continued compliance with certain restrictive covenants, the Company agreed to provide Dr. Mounts with (i) a continuation of base salary ($31,250 per month) for a period of nine months, (ii) payment of her full 2023 target annual bonus (as reflected in the “Non-equity Incentive Plan Compensation” column of the Summary Compensation Table), and (iii) one year of additional time vesting of her then-outstanding options.
Non-Compete Covenants
Each of our Named Executive Officers is prohibited from engaging in any business involving the development or commercialization of a preventive anti-infective product that would be a direct competitor of DefenCath/Neutrolin or a product containing taurolidine or any other product being actively developed or produced by us within the United States and the European Union (or in the case of Dr. David and Mr. Todisco, worldwide) on the date of termination of his or her employment for a period of 12 months following any termination of employment.
Equity Plan
The Company maintains the CorMedix Inc. Amended and Restated 2019 Omnibus Stock Incentive Plan pursuant to which it has granted equity awards to the Named Executive Officers, as well as other employees and service providers.
2023 Equity Awards
Mr. Todisco was granted stock options to purchase 400,000 shares of the Company’s Common Stock on January 14, 2023. The options granted to Mr. Todisco are scheduled to vest over a period of three years (with the first 25% vesting on the date of the grant, and the remainder scheduled to vest in equal annual installments over the next three years thereafter, subject to continued employment).
Dr. David was granted stock options to purchase 125,000 shares of the Company’s Common Stock on January 14, 2023. The options granted to Dr. David are scheduled to vest over a period of three years (with the first 25% vesting on the date of the grant, and the remainder scheduled to vest in equal annual installments over the next three years thereafter, subject to continued employment).
Ms. Mistry was granted stock options to purchase 200,000 shares of the Company’s Common Stock on January 14, 2023. The options granted to Ms. Mistry are scheduled to vest over a period of three years (with the first 25% vesting on the date of the grant, and the remainder scheduled to vest in equal annual installments over the next three years thereafter, subject to continued employment).
Dr. Mounts was granted stock options to purchase 125,000 shares of the Company’s Common Stock on January 14, 2023. The options granted to Dr. Mounts were scheduled to vest over a period of three years (with the first 25% vesting on the date of the grant, and the remainder scheduled to vest in equal annual installments over the next three years thereafter, subject to continued employment).
Outstanding Equity Awards at Fiscal Year-End 2023
The following table contains certain information concerning unexercised options for the Named Executive Officers as of December 31, 2023.
| Option Awards · Stock Awards | ||||||||
|---|---|---|---|---|---|---|---|---|
| Name · Number of Shares Underlying Unexercised Options (#) Exercisable · Number of Shares Underlying Unexercised Options (#) Unexercisable (1) · Equity Incentive Plan Awards: Number of Shares Underlying Unexercised Unearned Options # (2) · Option Exercise Price ($) · Option Expiration Date · Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested # · Equity Incentive Plan Awards: FMV or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested $ (3) | ||||||||
| Joseph Todisco | 125,000 | 375,000 | -- | 3.38 | 05/09/2032 | 103,735 | (4) | 390,044 |
| 100,000 | 300,000 | -- | 4.43 | 01/14/2033 | -- | -- | ||
| Matthew David | 101,917 | 20,750 | -- | 5.63 | 05/11/2030 | -- | -- | |
| 101,917 | 20,750 | -- | 4.08 | 05/11/2030 | -- | -- | ||
| 30,000 | 10,000 | -- | 8.32 | 01/10/2031 | -- | -- | ||
| 93,750 | 31,250 | -- | 5.56 | 10/31/2031 | -- | -- | ||
| 50,000 | 50,000 | -- | 4.03 | 02/17/2032 | -- | -- | ||
| 31,250 | 93,750 | -- | 4,43 | 01/14/2033 | ||||
| Erin Mistry | 77,500 | 2,500 | -- | 3.57 | 04/13/2030 | -- | -- | |
| 7,500 | 2,500 | -- | 8.32 | 01/10/2031 | -- | -- | ||
| 10,500 | 10,500 | -- | 4.03 | 02/17/2032 | -- | -- | ||
| 60,000 | 60,000 | -- | 5.45 | 07/20/2032 | -- | -- | ||
| 50,000 | 150,000 | -- | 4.43 | 01/14/2033 | -- | -- | ||
| Phoebe Mounts(5) | 60,000 | -- | -- | 7.92 | 12/31/2024 | -- | -- | |
| 24,764 | -- | -- | 5.63 | 12/31/2024 | -- | -- | ||
| 50,000 | -- | -- | 4.08 | 12/31/2024 | -- | -- | ||
| 50,000 | -- | -- | 5.63 | 12/31/2024 | -- | -- | ||
| 70,000 | -- | -- | 8.32 | 12/31/2024 | -- | -- | ||
| 100,000 | -- | -- | 5.56 | 12/31/2024 | -- | -- | ||
| 105,000 | -- | -- | 4.03 | 12/31/2024 | -- | -- | ||
| 62,500 | -- | -- | 4.43 | 12/31/2024 | ||||
| (1) | Vesting based on continued employment over four years. |
| (2) | Options vest based on achievement of specific milestones and continued employment and become exercisable if and when a milestone is achieved. |
| (3) | Fair market value of the shares that could be acquired based on the closing sale price per share of our common stock on the Nasdaq Global Market on December 31, 2023, which was $3.76. |
| (4) | Each restricted stock unit represents the right to receive one share of our common stock. The restricted stock units vest as follows: 50% on the first anniversary of the grant date, 30% on the second anniversary of the grant date, and the remaining 20% on the third anniversary of the grant date, subject to continued service through the applicable vesting date. |
| (5) | Dr. Mounts ceased serving as our General Counsel and Head of Regulatory, Compliance and Legal effective December 12, 2023, but her employment continued through December 31, 2023. |
Potential Payments on a Qualifying Termination
If the severance payments called for in our employment agreements for Mr. Todisco, Dr. David and Ms. Mistry had been triggered on December 31, 2023, we would have been obligated to make the following payments as described in more detail under the “Potential Payments Upon Termination or Change in Control” summary above:
| Name | Cash Severance ($) | COBRA Subsidy ($) | Accelerated Equity Vesting ($)(1) | Total ($) |
|---|---|---|---|---|
| Joseph Todisco (no Corporate Transaction) | 618,000 | 42,831 | 437,544 | 1,098,375 |
| Joseph Todisco (within 24 months following a Corporate Transaction) | 927,000 | 64,246 | 532,544 | 1,230,790 |
| Matthew David (no Corporate Transaction) | 292,500 | 31,863 | 0 | 324,363 |
| Matthew David (within 24 months following a Corporate Transaction) | 292,500 | 31,863 | 0 | 324,363 |
| Erin Mistry (no Corporate Transaction) | 294,003 | 0 | 475 | 294,578 |
| Erin Mistry (within 24 months following a Corporate Transaction) | 294,003 | 0 | 475 | 294,578 |
| (1) | With respect to outstanding stock options, represents the difference between the fair market value of the shares that could be acquired based on the closing sale price per share of our common stock on the Nasdaq Global Market on December 31, 2023, which was $3.76, and the exercise prices of the applicable stock options. With respect to restricted stock units, represents the fair market value of the shares that could be acquired based on the closing sale price per share of our common stock on the Nasdaq Global Market on December 31, 2023, which was $3.76. |
Pursuant to Dr. Mounts’ separation agreement, her departure was treated as a termination by the Company without Cause and she will be entitled to receive the severance benefits and payments described under the “Potential Payments Upon Termination or Change in Control” summary above. Dr. Mounts is subject to a noncompete covenant that runs through September 30, 2024, consistent with the terms described above under “Non-Compete Covenants”.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.