VERTEX PHARMACEUTICALS INC MA
For the period ended May 14, 2025. Filed Apr 3, 2025.
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May 14, 2025 · Filed Apr 3, 2025
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Contents
PAY VERSUS PERFORMANCE
Pursuant to Item 402(v) of Regulation S-K, we are presenting information that describes the relationship between compensation actually paid, as computed under the rules prescribed by Item 402(v), to our NEOs and certain financial performance measures for the company’s five most recently completed fiscal years. For more information about our executive compensation program, refer to the Compensation Discussion and Analysis section of this proxy statement starting on page 51.
| Year · SummaryCompensationTable Total forCEO(1) · SummaryCompensationTable Totalfor CEO(2) · CompensationActually Paidto CEO(1)(3) · CompensationActually Paidto CEO(2)(4) · AverageSummaryCompensationTable Total forNon-CEONEOs(5) · AverageCompensationActually Paidto Non-CEONEOs(6) · Total ShareholderReturn (Value ofInitial Fixed $100Investment) · Net Income(Loss)(9) · Net ProductRevenue(10) | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| VRTXTSR(7) · NBITSR(8) | |||||||||||||||||
| 2024 | $21,538,668 | N/A | $43,611,733 | N/A | $8,088,674 | $18,370,307 | $183.92 | $118.20 | $(0.5) | Billion | $11.0 | Billion | |||||
| 2023 | $20,594,441 | N/A | $44,202,174 | N/A | $7,376,771 | $18,104,165 | $185.84 | $118.87 | $3.6 | Billion | $9.9 | Billion | |||||
| 2022 | $15,864,497 | N/A | $29,529,089 | N/A | $8,982,257 | $18,263,330 | $131.89 | $113.65 | $3.3 | Billion | $8.9 | Billion | |||||
| 2021 | $15,198,856 | N/A | $18,341,489 | N/A | $7,193,835 | $8,969,051 | $100.30 | $126.45 | $2.3 | Billion | $7.6 | Billion | |||||
| 2020 | $9,111,359 | $16,473,245 | $12,172,454 | $31,319,824 | $6,697,408 | $10,584,384 | $107.94 | $126.42 | $2.7 | Billion | $6.2 | Billion | |||||
(1)This column reflects the amounts reported in the “Total” column of the Summary Compensation Table for Reshma Kewalramani, our CEO for a portion of 2020 (effective April 1, 2020), and for 2021, 2022, 2023 and 2024.
(2)This column reflects the amounts reported in the “Total” column of the Summary Compensation Table for Jeffrey Leiden, our CEO for a portion of 2020 (until April 1, 2020).
(3)The amounts in this column reflect the Compensation Actually Paid for Reshma Kewalramani, our CEO for a portion of 2020 (effective April 1, 2020), and for 2021, 2022, 2023 and 2024. The amounts in the following table reflect the adjustments (additions/deductions) to the Summary Compensation Table Total to determine Compensation Actually Paid. Adjustments (additions/deductions) are not listed for Pension/Non-Qualified Deferred Compensation because we do not offer these plans.
| Year | SummaryCompensationTable Total | AmountsDeducted fromGrant Date Valueof Annual Equity | Amounts Addedfor the Fair Valueof AwardsGranted DuringFiscal Year | Amounts Addedfor AwardsGranted & VestedDuring Fiscal Year | AmountsAdded/Deducted forAwards thatVested DuringFiscal Year | Amounts Added/Deducted for the Changein Fair Value of AwardsOutstanding at FiscalYear End(a) | Compensation Actually Paid |
|---|---|---|---|---|---|---|---|
| 2024 | $21,538,668 | $(15,002,202) | $24,557,854 | $— | $1,298,423 | $11,218,990 | $43,611,733 |
| 2023 | $20,594,441 | $(15,001,894) | $24,692,933 | $— | $272,767 | $13,643,927 | $44,202,174 |
| 2022 | $15,864,497 | $(10,640,784) | $16,817,103 | $— | $768,712 | $6,719,561 | $29,529,089 |
| 2021 | $15,198,856 | $(10,924,599) | $14,344,492 | $— | $(659,323) | $382,063 | $18,341,489 |
| 2020 | $9,111,359 | $(5,250,411) | $6,587,268 | $— | $345,685 | $1,378,553 | $12,172,454 |
(a)Pursuant to applicable SEC rules, the fair values at the end of each fiscal year for the financial PSU awards were valued at 200% as of December 31, 2024, 2023, 2022, 2021, 2020 and 2019; and, the non-financial PSU award for 2020 was valued at 200%, 50% and 50% as of December 31, 2022, 2021 and 2020, respectively; the non-financial PSU award for 2021 was valued at 100%, 50% and 50% as of December 31, 2023, 2022 and 2021, respectively; the non-financial PSU award for 2022 was valued at 200%, 50% and 0% as of December 31, 2024, 2023 and 2022, respectively; the non-financial PSU award for 2023 was valued at 100% and 50% as of December 31, 2024 and 2023, respectively; the non-financial PSU award for 2024 was valued at 200% as of December 31, 2024.
(4)The amounts in this column reflect the Compensation Actually Paid for Jeffrey Leiden, our CEO for a portion of 2020 (until April 1, 2020). The amounts in the following table reflect the adjustments (additions/deductions) to the Summary Compensation Table Total to determine Compensation Actually Paid. Adjustments (additions/deductions) are not listed for Pension/Non-Qualified Deferred Compensation because we do not offer these plans.
| Year | SummaryCompensationTable Total | AmountsDeducted fromGrant Date Valueof Annual Equity | Amounts Addedfor the Fair Valueof AwardsGranted DuringFiscal Year | Amounts Addedfor AwardsGranted & VestedDuring Fiscal Year | AmountsAdded/Deducted forAwards thatVested DuringFiscal Year | Amounts Added/Deducted for the Changein Fair Value of AwardsOutstanding at FiscalYear End(a) | Compensation Actually Paid |
|---|---|---|---|---|---|---|---|
| 2020 | $16,473,245 | $(13,335,168) | $9,294,661 | $7,362,423 | $5,724,395 | $5,800,268 | $31,319,824 |
(a)Pursuant to applicable SEC rules, the fair values at the end of each fiscal year for the financial PSU awards were valued at 200% as of December 31, 2020 and 2019; and, the non-financial PSU award for 2017 was valued at 200% as of December 31, 2019; the non-financial PSU award for 2018 was valued at 200% and 100% as of December 31, 2020 and 2019, respectively; the non-financial PSU award for 2019 was valued at 100% and 50% as of December 31, 2020 and 2019, respectively; the non-financial PSU award for 2020 was valued at 50% as of December 31, 2020.
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(5)This column reflects the average of the amounts reported in the “Total” column of the Summary Compensation Table for our NEOs as a group (excluding our CEO or CEOs, in the case of 2020) for each of the periods presented. The NEOs included for purposes of computing the amounts in this column were as follows: for 2024, Mr. Wagner, Dr. Altshuler, Mr. Arbuckle, and Dr. Tatsis; for 2023 and 2022, Mr. Wagner, Dr. Altshuler, Mr. Arbuckle, and Dr. Leiden; for 2021, Mr. Wagner, Mr. Arbuckle, Dr. Leiden, and Dr. Tatsis; and for 2020, Mr. Wagner, Dr. Altshuler, Mr. Arbuckle, and Michael Parini.
(6)This column reflects the average of the Compensation Actually Paid for our NEOs as a group (excluding our CEO or CEOs, in the case of 2020) for each of the periods presented. The amounts in the following table reflect the adjustments to the Summary Compensation Table Total to determine Compensation Actually Paid. The NEOs included for purposes of computing the amounts in this column are listed in footnote (5) above. Adjustments (additions/deductions) are not listed for Pension/Non-Qualified Deferred Compensation because we do not offer these plans.
| Year | SummaryCompensationTable Total | AmountsDeducted fromGrant Date Valueof Annual Equity | Amounts Addedfor the Fair Valueof AwardsGranted DuringFiscal Year | Amounts Addedfor AwardsGranted & VestedDuring Fiscal Year | AmountsAdded/Deducted forAwards thatVested DuringFiscal Year | Amounts Added/Deducted for the Changein Fair Value of AwardsOutstanding at FiscalYear End(a) | Compensation Actually Paid |
|---|---|---|---|---|---|---|---|
| 2024 | $8,088,674 | $(5,496,460) | $8,997,325 | $— | $526,590 | $6,254,178 | $18,370,307 |
| 2023 | $7,376,771 | $(5,590,153) | $8,606,944 | $812,533 | $236,286 | $6,661,784 | $18,104,165 |
| 2022 | $8,982,257 | $(7,261,199) | $9,489,852 | $1,062,531 | $538,093 | $5,451,796 | $18,263,330 |
| 2021 | $7,193,835 | $(5,687,759) | $6,319,320 | $1,125,037 | $(778,741) | $797,359 | $8,969,051 |
| 2020 | $6,697,408 | $(4,812,998) | $6,038,487 | $— | $1,048,920 | $1,612,567 | $10,584,384 |
(a)Pursuant to applicable SEC rules, the fair values at the end of each fiscal year for the financial PSU awards were valued at 200% as of December 31, 2024, 2023, 2022, 2021, 2020 and 2019; and, the non-financial PSU award for 2017 was valued at 200% as of December 31, 2019; the non-financial PSU award for 2018 was valued at 200% and 100% as of December 31, 2020 and 2019, respectively; the non-financial PSU award for 2019 was valued at 200%, 100% and 50% as of December 31, 2021, 2020 and 2019; the non-financial PSU award for 2020 was valued at 200%, 50% and 50% as of December 31, 2022, 2021 and 2020; the non-financial PSU award for 2021 was valued at 100%, 50% and 50% as of December 31, 2023, 2022 and 2021, respectively; the non-financial PSU award for 2022 was valued at 200%, 50% and 0% as of December 31, 2024, 2023 and 2022, respectively; the non-financial PSU award for 2023 was valued at 100% and 50% as of December 31, 2024 and 2023, respectively; the non-financial PSU award for 2024 was valued at 200% as of December 31, 2024.
(7)This column represents our cumulative total shareholder return (“TSR”) under SEC rules from December 31, 2019, the last trading day before the start of 2020, through the last trading day for the applicable fiscal year in the table. TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between our share price at the end and the beginning of the measurement period by our share price at the beginning of the measurement period.
(8)This column represents the TSR of the NBI, our selected peer group, which is the same peer group used for purposes of Item 201(e) of Regulation S-K from December 31, 2019, the last trading day before the start of 2020, through the last trading day for the applicable fiscal year in the table, assuming reinvestment of dividends and weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated.
(9)This column reflects net income (loss) as reported for each year in our Annual Report on Form 10-K. In 2024, we had a net loss of $536 million, which reflected our strong operating results offset by $4.4 billion of AIPR&D expense related to the Alpine acquisition.
(10)This column reflectsnet product revenue as reported for each year in our Annual Report on Form 10-K. For purposes of the table above, we have selected net product revenue as the financial performance measure representing the most important financial performance measure used to link executive compensation actually paid to our financial performance in the most recently completed fiscal year. Please see the Compensation Discussion and Analysis section beginning on page 51 of this proxy statement for additional information.
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Relationship Between Pay and Performance
The relationships between certain specified measures in the pay-versus-performance table over the five most recently completed fiscal years are provided below.
Compensation Actually Paid vs TSR (and TSR vs Peer Group TSR)
| CEO CAP | Avg. NEO CAP | Co. TSR | Peer TSR |
Compensation Actually Paid vs Net Income (Loss)
| CEO CAP | Avg. NEO CAP | Net Income (Loss) |
(2)As discussed in (9) above, our net loss in 2024 was primarily related to our acquisition of Alpine.
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Compensation Actually Paid vs Net Product Revenue
| CEO CAP | Avg. NEO CAP | Net Product Revenue |
List of Performance Measures
The tabular list below includes the three financial and non-financial performance measures that represent the most important performance measures used to link compensation actually paid to company performance in 2024. The performance measures included in this list are not ranked by relative importance.
Performance Measures Used to Link Executive Compensation Actually Paid to Company Performance for the Most Recently Completed Fiscal Year
Net Product Revenue
Pipeline Progression(1)
Adjusted Non-GAAP EBITDA(2)
(1)Pipeline progression is a non-financial performance measure used to link executive compensation to company performance, as described in Goals –Pipeline Growth (Late and Early Stage) and Performance Units Results Table.
(2)Adjusted non-GAAP EBITDA is a financial performance measure used to link compensation actually paid to company financial performance, as described in Goals –Financial Strength. We calculated adjusted non-GAAP EBITDA by excluding interest, taxes, depreciation and amortization expenses, as well as AIPR&D and certain other adjustments primarily related to our acquisition of Alpine, from net income (loss), as well as excluding each of our non-GAAP adjustments to pre-tax income included in our “Reconciliation of GAAP to Non-GAAP Net Income” in our quarterly earnings release filed on February 13, 2025 for the twelve months ended December 31, 2024.
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