ALX ONCOLOGY HOLDINGS INC

The Company’s executive compensation program consists of three primary elements: base salaries, annual cash incentives, and long-term equity awards.

Our Company is committed to a strong performance orientation in our compensation program and effective corporate governance practices for a company at our development stage and industry.

Base Salary

Base salary provides competitive pay to attract and retain our executives. Annual salary decisions are made in recognition of competitive data as well as the skills and experience that each individual brings to the Company and the performance contributions each makes.

Annual Cash Incentive Program

We maintain an Executive Incentive Compensation Plan (Incentive Compensation Plan), pursuant to which our named executive officers are eligible to receive cash incentive awards. The Incentive Compensation Plan is designed to provide a financial incentive to reward executives for the achievement of a series of program specific, pipeline, and functional corporate goals. Payments under the plan are ultimately based on achievement of these pre-established corporate goals. Actual performance against targets, as measured by these pre-established corporate goals, funds the incentive payouts. The total bonus payout cannot exceed the total amount of funding in the pool. Annual target bonuses are set based on factors such as the executive’s past contributions, tenure, experience, and role and the annual target bonuses provided by companies in our compensation peer group to their similarly situated executives. Bonuses are typically paid in the month following the end of the performance period.

For 2023, the compensation committee set Mr. Lettmann’s annual target bonus at 55% of his annual base salary, provided that such bonus was prorated based on the number of days in 2023 during which he served as our CEO. The compensation committee maintained Dr. Pons’ annual target bonus at 55% of his annual base salary for the full year. The annual target bonus target for each of our other named executive officers (NEOs), as a percentage of the NEO’s salary, remained at 40%.

Bonuses for all employees, including our NEOs, for the fiscal year ended December 31, 2023, were allocated from a bonus pool funded based on performance against a number of high-impact project and cross-functional goals. The project goals related to specific programs, trials and corporate progress. The cross-functional goals related to business development, positioning for future growth, and development and other functional goals. The combination of the project and cross-functional goals was intended to drive both specific technical achievement and continue to build the foundation for future company growth and advancements.

Each goal is given a specific weighting and measured individually, and the extent of achievement of the goals and the applicable weightings determine the 2023 bonus payout, subject to the compensation committee’s discretion to alter bonus funding and payouts. The 2023 performance goals for Mr. Lettmann and Dr. Pons were based entirely on corporate goals. The 2023 performance goals for the other NEOs were based 80% on corporate goals and 20% on individual goals.

In January 2024, the compensation committee reviewed the performance against the applicable 2023 corporate and individual goals. Based on the Company’s achievement of the corporate goals, the compensation committee approved funding of the Company’s bonus pool at 100% of target levels related to the corporate goals. Based on the NEOs’ achievement of the individual goals, the compensation committee approved 100% achievement of such individual goals. The resulting bonuses to our NEOs were as follows: Mr. Lettmann ($119,003), Dr. Pons ($357,357), Mr. Garcia ($194,189) and Dr. Randolph ($204,000).

Equity Long-Term Incentive Compensation

We believe long-term incentive compensation is an effective means for focusing our executive officers, including the named executive officers, on driving strong performance and increased stockholder value over a multi-year period, provides a meaningful reward for long-term value creation, and motivates them to remain employed with us. This approach aligns the contributions of our executive officers with the long-term interests of our stockholders and allows them to participate in any future appreciation in our common stock.