PRECIGEN INC

​

towards long-term objectives in a manner that links compensation of our executive officers with the value created for our shareholders. While aligning our executive officers’ compensation with our short-term and long-term business goals, we aim to provide the incentives needed to attract, motivate, reward, and retain our management talent, which is crucial to our long-term success.

Principles of Our Compensation Framework

Our executive compensation program is designed to attract, retain, motivate, and reward talented individuals who will execute our business plan so that we can succeed in the competitive and highly volatile business environment in which we operate. The Compensation Committee believes that the compensation program for our executive officers should reward the achievement of our short-term and long-term objectives and that compensation should be related to the value created for our shareholders. Furthermore, the compensation program should reflect competition and best practices in the marketplace. The following objectives serve as the Compensation Committee’s guiding principles for all compensation decisions:

•

Our executive compensation and benefits should attract, motivate, reward, and retain the management talent necessary to achieve our business objectives at compensation levels that are fair, equitable, and competitive with those of comparable companies.

​

•

Compensation should be set based on the leadership of each executive officer, which reflects skill sets, experience, and achievement, to create a competitive framework for talent acquisition and retention.

​

•

Compensation should be linked to individual and corporate performance by aligning our executive compensation program to company-wide performance, which is assessed in terms of financial and non-financial performance and creation of long-term value for our shareholders.

​

•

There should be an appropriate mix and weighting compensation elements such that an adequate amount of each executive officer’s total compensation is performance-based or “at risk.” Further, as an executive’s responsibilities increase, the portion of “at-risk” compensation for the executive should also increase as a percentage of total compensation.

​

In addition, the Compensation Committee believes that the various elements of our compensation program effectively align compensation with performance measures that are directly related to our financial goals and creation of shareholder value without encouraging executives to take unnecessary and excessive risks.

Elements of Our Compensation Program

The Compensation Committee utilizes a mix of compensation components, with the intent to make each component of total direct compensation competitive while also linking compensation to individual and corporate performance and encouraging stock ownership by our executive officers. The table below describes each compensatory element in our program and briefly explains how it promotes our objectives. We believe the combination of these elements provides an appropriate balance of rewards, incentives, and benefits to our executives and enables us to meet our desired compensation objectives, strengthen our ability to attract and retain highly qualified individuals, and to appropriately link pay to performance.

We do not provide our executives with any meaningful perquisites that are not provided to employees generally. We also do not have any deferred compensation programs or retirement programs other than our 401(k) Plan that is generally available to all employees. We enroll all eligible employees in the same health, dental, and life and disability insurance programs.

Base Salary

General

Base salary levels for our executive officers, with the exception of our CEO, are recommended to the Compensation Committee by our CEO and are subject to approval by the Compensation Committee and the Board. In setting the base salary level for each executive officer (other than our CEO), the Compensation Committee generally considers the executive officer’s experience level, demonstrated capabilities, time and placement in position, our geographic region, individual performance, and potential future contributions to our Company. In addition, the Compensation Committee may consider executive compensation data for the industry as a whole, including data from similarly situated companies. Base salaries are reviewed annually by the Compensation Committee. When making decisions to adjust executive salaries, the Compensation Committee will also consider our overall financial performance in addition to the factors identified above. No particular weight is assigned to any one factor. Taking into account the overall position of the Company, the Compensation Committee determined not to make any changes to base salary for our named executive officers in 2023.

The following table sets forth the 2023 annualized base salaries for each of our NEOs.

Annual Short-Term Incentive Awards

General

Our NEOs are eligible to receive annual bonuses based on corporate performance achievement, as determined by the Compensation Committee following the completion of the applicable performance year, and subject to the NEO’s continued employment through the applicable payment date. Each named executive officer is provided an annual target bonus opportunity that is set as a percentage of base salary, except that Dr. Sabzevari’s employment agreement provides for eligibility for an annual bonus of between 75% and 150% of Dr. Sabzevari’s annual base salary.

For 2023, the Compensation Committee established a bonus program for our named executive officers based on the achievement of a combination of primarily operational performance goals, which would promote the achievement of our key clinical, non-clinical, business development and other corporate objectives. The Compensation Committee established a target bonus for Dr. Sabzevari of 150% of base salary and for our other NEOs of 40% of base salary.

Following the end of the 2023 performance year, the Compensation Committee carefully reviewed the performance of the Company against each of the goals as part of the evaluation process for determining the annual bonus payouts for our named executive officers. In addition, the Compensation Committee performed a holistic review of company and individual performance, which contributed to its determination of payout amounts. Although a relatively small portion of certain goals were not achieved, the Committee concluded that the overall achievements of the executive team in 2023 far outweighed some of the goals that were not completely achieved. Overall, the Committee concluded that the following accomplishments supported this conclusion:

•

Significant clinical progress was achieved across our principal pipeline, including AdenoVerse and UltraCAR-T, highlighted by the U.S. Food and Drug Administration (FDA) granting Breakthrough Therapy Designation for PRGN-2012 AdenoVerse immunotherapy for the treatment of recurrent respiratory papillomatosis (RRP), and the FDA’s confirmation that the ongoing phase 1 / 2 study of PRGN-2012 will serve as pivotal for the purpose of filing an accelerated approval request for licensure.

​

•

We regained exclusive rights to proven CAR-T targets, CD19 and BCMA, to enable unencumbered development and commercialization of UltraCAR-T.

​

•

We also strengthened the Company’s balance sheet through both the complete retirement of our convertible notes and raising approximately $73 million of net proceeds from an underwritten public offering of the Company’s common stock.

​

•

The Company also took certain additional organizational steps to continue the Company’s focus as a healthcare company.

​

The Compensation Committee discussed these accomplishments with Dr. Sabzevari and, subsequently, with members of the Board and the Compensation Committee’s independent compensation consultant, recommended to the Board the approval of a performance bonus in an aggregate amount equal to 100% of target, or 150% of Dr. Sabzevari’s base salary and 40% of base salary for our other NEOs. Taking into consideration the continued focus on enhanced equity ownership by our executives, as well as cash preservation, the Compensation Committee also approved the short-term incentive bonuses to be paid 100% in fully-vested RSUs based on the grant date fair market value of the Company’s shares, as reflected in the table below.

Long-Term Equity Incentive Awards

Our primary objectives in granting long-term equity incentive awards are to encourage significant ownership of our common stock by management and to provide long-term financial incentives linked