Certara Inc

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We deliver executive compensation through a combination of the following components:

For additional detail on these components of compensation, see “Elements of our Compensation Program” below.

COMPENSATION DETERMINATION PROCESS

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Role of the Compensation Committee and Management

Our Compensation Committee is responsible for, among other things, overseeing our compensation policies and practices, determining the compensation of our chief executive officer (“CEO”), and reviewing and approving compensation of other executive officers. Our CEO works closely with the Compensation Committee in managing our executive compensation program and attends meetings of the Compensation Committee. Because of his daily involvement with the executive team, our CEO makes recommendations to the Compensation Committee regarding compensation for the executive officers other than himself. Our CEO does not participate in discussions with the Compensation Committee regarding his own compensation.

Role of the Compensation Consultant

Korn Ferry provides guidance with respect to the ongoing review of our executive compensation programs, including peer group development, benchmarking executive compensation and incentive (short and long-term) design. In connection with this appointment, the Compensation Committee assessed Korn Ferry’s independence and determined that Korn Ferry is independent and that there are no conflicts of interest raised by the work performed by them.

Korn Ferry assisted the Compensation Committee in developing a peer group of the following 15 companies, which were selected using relevant financial metrics, including average market capitalization, revenue, market

36 | 2024 PROXY STATEMENT capitalization to revenue ratio, EBITDA, as well as other factors, such as number of employees, industry, and business segment. Our peer group consists of the following:

Our peer group was selected to represent companies in the software, life sciences tools and services, and health care technology industries that are within an appropriate size range as compared to us, with relatively comparable financial and employee metrics.

ELEMENTS OF OUR COMPENSATION PROGRAM

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Base Salaries

The objective of our compensation program is to compensate our executives for performing the requirements of their positions and provide them with a level of cash income predictability and stability with respect to a portion of their total compensation. The Compensation Committee believes that base salaries for executives should reflect competitive levels of pay and factors unique to each executive, such as experience and breadth of responsibilities, performance, individual skill set, time in the role, pay relative to peers within the Company, and base pay in previous roles outside of the Company. Base salaries may be adjusted at times to deal with competitive pressures, changes in job responsibilities, and cost-of-living adjustments.

The following table reflects the annual base salaries of our NEOs as of December 31, 2023, and December 31, 2022, respectively:

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(1)

In 2022, Mr. Gallagher was not employed by the Company.

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(2)

Dr. Aspbury’s base salary is expressed in U.S. dollars. Because he is paid in British Pounds Sterling (GBP) monthly based on the exchange rate at the time his new salary is approved, his actual compensation received when those monthly payments are converted back to U.S. dollars based on the exchange rate at the time of each monthly payment, equals $337.651, as shown on the Summary Compensation Table. Going forward, the Company intends to express his base salary in GBP so that the currency conversion will only occur one-way (GBP to U.S. dollars).

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(3)

Mr. Schemick’s salary for 2022 is based on his role as the former CFO. He officially stepped down from his position as an officer on March 31, 2023, and assumed a new role with the Company before resigning as an employee of Certara in June 2023.

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The annual base salary for our NEOs were increased in 2023 from 2022 (with the exception of (a) Dr. Feehery, (b) Mr. Schemick who stepped down as the CFO, and (c) Mr. Gallagher who joined the Company on April 1, 2023) to (i) help ensure the retention of these executive officers, and (ii) ensure consistency with the general guideline established by our Compensation Committee of targeting total direct compensation for executive officers at the relevant median amount, based on our compensation peer group.

Annual Incentive Bonus Plan

The Annual Incentive Bonus Plan (“AIB Plan”) is designed to motivate our NEOs to achieve short-term performance goals and tie a portion of their annual compensation to the performance of the Company for that year. Each NEO is eligible for an annual bonus award under our annual cash-based AIB Plan. For fiscal year 2023, all our NEOs participated in the AIB Plan.

The AIB Plan awards are determined using two principal factors: (i) an individual’s target bonus percentage, which is expressed as a percentage of his or her base salary (“Individual Target”); and (ii) a multiplying factor based on the achievement of certain corporate and divisional goals established by our Compensation Committee at the beginning of each year (“Multiplier”). As expressed formulaically, the bonus amount for each senior executive is determined as follows: Individual Target X Multiplier (which is based on and correlates to the achievement of divisional or corporate goals). The Compensation Committee may then make further adjustments, considering individual performance and any other factors it deems relevant but that are not otherwise captured in the formula.

The Individual Target for each NEO is established within each NEOs’ employment agreement and may be adjusted from time to time by the Compensation Committee in connection with such NEO’s promotion or performance. In setting the applicable Individual Target, the Compensation Committee reviews the past performance of each NEO and contributions made to the Company, the annual benchmarking provided by our independent compensation consultant, and the relationship of pay levels to other senior executives at the Company. It then determines a target bonus deemed appropriate to increase focus on performance-based pay, ensure retention, and motivate performance against the Company’s strategic initiatives. As indicated below, certain Individual Targets were either added or increased in 2023 from 2022 to better align with peer company compensation. The Individual Targets under the 2023 and 2022 AIB Plan for our NEOs were as follows:

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(1)

Mr. Gallagher was not employed by the Company in 2022.

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(2)

Mr. Schemick resigned as an officer on March 31, 2023 and terminated employment with the Company on June 30, 2023.

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For 2023, the Compensation Committee selected a combination of adjusted EBITDA and revenue as the key financial metrics for determining the Multiplier portion of the AIB Plan calculation, with adjusted EBITDA

38 | 2024 PROXY STATEMENT achievement contributing 80% relative weight to the Multiplier, and revenue achievement contributing 20% relative weight to the Multiplier. The financial achievement metrics are determined for the overall company, and also determined for each business unit, with each NEO’s Multiplier calculated on some combination of overall Company and/or business unit performance. For Dr. Feehery and Mr. Gallagher, 20% of their Multiplier under the AIB Plan was tied to the achievement of Company-wide financial metrics and 80% was tied to the average financial metrics achievement of each of the divisions within the Company (the “Blended Rate”). For Mr. Pedersen, Dr. Smith and Dr. Aspbury, 20% of their Multiplier was based on Company-wide adjusted financial metrics achievement, and 80% was based on the financial metrics achievement of the respective business unit each such individual leads (the “Division Rate”). These allocations were selected to ensure that Dr. Feehery’s and Mr. Gallagher’s focus was equally distributed across the corporate functions and business units, and the other NEOs were primarily focused on the business units that they lead, while still having an important stake in the overall success of Company. We believe that this encourages collaboration across the business units, as well as building our business in the interest of “one Certara” at the enterprise level.

The amounts paid to the NEO participants under the AIB Plan were calculated by multiplying each NEO participant’s Individual Target by the Multiplier tied to either the Blended Rate or Division Rate. For achievement above a threshold level of the adjusted EBITDA and revenue goals, the Multiplier was based on a pre-determined scale (with a range of 50% to 200%), which may be adjusted by the Compensation Committee outside the pre-determined scale to reflect overall individual and Company performance.

The Multiplier under the AIB Plan for our NEOs was as follows:

The following table illustrates the calculation of the bonuses payable to our NEOs under the 2023 AIB Plan:

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(1)

Mr. Schemick was not eligible to participate in the AIB Plan for 2023 as he terminated his employment prior to the bonus payout.

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Long-Term Equity Incentive Awards

We believe that successful performance over the long term is aided by the use of equity-based awards, which create an ownership culture among our employees and provides an incentive to contribute to the continued growth and development of our business. Equity-based awards also allow for a portion of our executive compensation to be “at-risk” and directly tied to the performance of our business. The Compensation Committee has adopted a long-term equity structure that annually awards NEOs market-based equity opportunity in the form of time-based RSUs and PSUs. All RSUs and PSUs are settled in shares of common stock. For 2023, 40% of the LTI value granted to NEOs was issued in RSUs, and 60% was issued in PSUs.

Fiscal 2023 Grants

On April 1, 2023, we granted RSUs and PSUs to each of our NEOs as follows:

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(1)

The grant date value shown in this column is based on the number of RSUs and PSUs granted multiplied by the closing stock price on the grant date (April 1, 2023). The number of RSUs and PSUs granted on the grant date was determined based on the following dollar values, divided by $22.0753, which is the VWAP for the 60 trading days prior to and including March 29, 2023, which is the date the Compensation Committee authorized the grants: William F. Feehery: $5,500,000; John E. Gallagher III: $2,100,000; Leif E. Pedersen: $1,300,000; Patrick F. Smith: $1,300,000; and Robert P. Asbury: $1,300,000.

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(2)

Mr. Schemick resigned from the Company in June 2023, resulting in the forfeiture of any awards he was granted.

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The amount of the equity-based awards granted to each NEO was determined by taking into consideration each NEO’s total direct compensation and alignment to our philosophy of at or above market median total for compensation and equity.

For specific vesting terms of our equity awards and a description of equity awards made prior to fiscal year 2023, see “— Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table.”

Vesting of Restricted Stock and Restricted Stock Units and During Fiscal Year 2023

As discussed below under “— Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table — Pre-IPO Class B Units and Converted Restricted Stock,” prior to our December 2020 IPO (the “IPO”), long-term equity incentive awards were granted to our NEOs under the Company’s prior (2017) equity incentive plan in the form of Class B Profits Interest Units (“Class B Units”), which were 50% time-vesting and 50% performance-vesting. In connection with the IPO, all outstanding Class B Units were converted into shares of restricted stock granted under 2020 Incentive Plan, with the unvested Class B Units being converted into time-based restricted common stock. For all recipients of Class B Units that were converted into time-based restricted common stock that remains unvested, the vesting period is five years (20% per year, with annual cliff vesting) from the date of the original grant. Because the performance vesting portion of the Class B Units was primarily based on the cash-on-cash return on investment of the prior controlling partner of the Company, the

40 | 2024 PROXY STATEMENT timing of which was outside the control of management, the Board and Compensation Committee at the time felt that it was more equitable and incentivizing to tie all post-IPO vesting to continued employment with the Company.

As discussed below under “— Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table — Post-IPO Awards,” our NEOs were awarded PSUs and RSUs in 2021, 2022, and 2023 under our 2020 Incentive Plan. One-third of the RSUs granted to our NEOs on April 1, 2021, vested on April 1, 2022. One-third of the RSUs granted to our NEOs on April 1, 2021 and 2022, respectively, vested on April 1, 2023. The PSUs granted in 2021, 2022, and 2023 will not be distributed until after the end of the applicable Performance Period (three fiscal years for each plan), but, as of January 1, 2023, each NEO who received a PSU grant in 2021 and 2022 is entitled to two-third of t 2021 “Earned PSUs” ​(as such term is defined in the PSU Award Agreements), and one-third of the 2022 Earned PSUs, as determined after the end of the respective Performance Period.

Benefits and Perquisites

While our compensation philosophy focuses on performance-based forms of compensation while providing only minimal executive benefits and perquisites, we provide to all our employees, including our NEOs, broad-based, non-cash compensation, such as employee benefits that are intended to attract and retain employees while providing them with retirement and health and welfare security, which include:

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U.S. 401(k) Plan. We maintain a tax-qualified defined contribution 401(k) savings plan (the “401(k) Plan”), in which all our U.S.-based employees, including our U.S.-based NEOs, are eligible to participate. The 401(k) Plan allows participants to contribute up to 100% of their compensation on a pre-tax basis into individual retirement accounts, subject to the maximum annual limits set by the Internal Revenue Service. The 401(k) Plan also allows the Company to make employer matching contributions. The Company has historically made employer matching contributions of up to 50% of our employees’ deferral, limited to the first 6% of each employee’s compensation, except for one division for which we matched 100% of our employees’ deferral up to 6% of compensation. Participants’ contributions to the 401(k) Plan are immediately fully vested. Participants vest in the matching contributions we make to their accounts after four years of service at a rate of 25% per year, except for one division in which they fully vest after three years of service.

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U.K. Pension Plan. The Company also operates a Group Personal Pension Plan covering all U.K. employees, including our UK-based NEO, Dr. Aspbury. Employees are auto-enrolled in the plan who are at least 22 years of age and paid more than £10,000 a year, up to the State Pension Age. However, all employees who are between the ages of 16 and 75 can elect to join the plan. The Company contributes an additional 8% of salary for those employees who have registered for the Group Personal Pension Plan, which exceeds their duties under U.K. auto enrolment legislation.

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Health and Welfare Benefits. Our U.S.-based employees, including our U.S.-based NEOs, are generally eligible to participate in our health and welfare benefit plans, which offer medical, dental, vision, life, and disability insurance coverage, dependent care flexible spending accounts, and health savings and health reimbursement accounts. We also offer a voluntary legal plan and voluntary disability coverage.

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Other Benefits and Perquisites. There are no additional benefits or perquisites offered at this time other than those specifically mentioned in this Compensation Discussion & Analysis. For example, we do not currently sponsor any retiree medical or pension benefit plans, club memberships, automobile allowances, use of corporate aircraft for personal travel, or any other personal benefits.

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Severance and Change of Control Benefits.

We do not have a formal severance policy. However, we do provide severance benefits to our NEOs through their employment agreements in order to offer competitive total compensation packages and be competitive in our executive attraction and retention efforts. Our NEOs’ employment agreements provide for severance payments and benefits upon a qualifying termination of employment (“Qualifying Termination”), which is a termination by the Company without cause or a resignation by the executive for good reason. See “Executive Compensation Tables — Termination and Severance — Potential Payments to NEOs Upon Termination of Employment or Change of Control,” which describes the payments to which each of the NEOs may be entitled under their respective employment agreements.

In addition, our equity awards provide for accelerated vesting upon certain termination events and as more fully described below under “Executive Compensation Tables — Termination and Severance — Potential Payments to NEOs Upon Termination of Employment or Change of Control.”

Stock Ownership and Retention Policy

To align the interests of management with those of our stockholders, certain of our executives and non-employee directors (the “Covered Persons”) are required to hold a specific level of equity ownership as outlined below(1).

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(1)

Reflects amendments to the stock ownership guidelines approved by the Compensation Committee in 2023.

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(2)

Only applicable to executive officers.

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Compliance with this policy is measured on February 1 of each year (the “Compliance Date”). Any Covered Person who does not meet the threshold on the Compliance Date will be required to retain 100% of any Company equity acquired (net of taxes) through the exercise of stock options or the vesting of time-based restricted stock, RSUs, or PSUs, until the next Compliance Date. Until the applicable ownership level is achieved, Covered Persons must retain 100% of the net shares granted to them. As of February 1, 2024, all NEOs satisfied their minimum equity ownership thresholds. All our directors have satisfied the minimum ownership threshold requirement, except for. Messrs. Spaight and McLean who are not considered Covered Persons under the relevant policy as they are employees of an Institutional Stockholders (as defined in the Stockholders Agreement) and do not receive a cash and stock retainer to serve as directors of the Company.

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