Inspire Medical Systems Inc
For the period ended May 2, 2024. Filed Mar 19, 2024.
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May 2, 2024 · Filed Mar 19, 2024
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Contents
PAY VERSUS PERFORMANCE
The following table sets forth information concerning the compensation of our NEOs for each of the fiscal years ended December 31, 2020, 2021, 2022, and 2023, and our financial performance for each such fiscal year:
| (a) | | | (b) | | | (c) | | | (d) | | | (e) | | | (f) | | | (g) | | | (h) | | | (i) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| · · · · · · · · · · Value of Initial Fixed $100 Investment Based on: · · · · | ||||||||||||||||||||||||
| Year | | | Summary Compensation Table Total for PEO($) | | | Compensation Actually Paid to PEO ($)(1) | | | Average Summary Compensation Table Total for Non-PEO NEOs ($) | | | Average Compensation Actually Paid to Non-PEO NEOs ($)(1) | | | Total Shareholder Return ($) | | | Peer Group Total Shareholder Return ($)(2) | | | Net Income ($) | | | Revenue ($) |
| 2023 | | | 7,490,775 | | | 876,350 | | | 2,184,323 | | | (488,837) | | | 274.13 | | | 98.68 | | | (21,153,000) | | | 624,799,000 |
| 2022 | | | 5,675,394 | | | 8,351,516 | | | 2,140,038 | | | 3,119,563 | | | 339.42 | | | 104.93 | | | (44,881,000) | | | 407,856,000 |
| 2021 | | | 1,272,916 | | | 10,637,336 | | | 1,132,482 | | | 3,925,220 | | | 310.25 | | | 137.24 | | | (42,042,000) | | | 233,394,000 |
| 2020 | | | 4,865,607 | | | 21,661,173 | | | 2,459,027 | | | 6,851,303 | | | 253.46 | | | 132.83 | | | (57,203,000) | | | 115,381,000 |
| (1) | Amounts represent compensation “actually paid” to our principal executive officer, or PEO, and the average compensation actually paid to our remaining NEOs for the relevant fiscal year, as determined under SEC rules (and described below), which includes the individuals indicated in the table below for each fiscal year: |
| Year | | | PEO | | | Non-PEO NEOs |
| 2023 | | | Timothy P. Herbert | | | Randall A. Ban, Richard J. Buchholz, Philip J. Ebling and Carlton W. Weatherby |
| 2022 | | | Timothy P. Herbert | | | Randall A. Ban, Richard J. Buchholz, Philip J. Ebeling and John C. Rondoni |
| 2021 | | | Timothy P. Herbert | | | Randall A. Ban, Richard J. Buchholz, Philip J. Ebeling and Bryan K. Phillips |
| 2020 | | | Timothy P. Herbert | | | Randall A. Ban, Richard J. Buchholz, Philip J. Ebeling and Steven L. Jandrich |
Compensation actually paid (CAP) to our NEOs represents the “Total” compensation reported in the Summary Compensation Table for the applicable fiscal year, as adjusted as reflected below. The fair values of PSUs, and stock options included in the CAP to our PEO and the Average CAP to our non-PEO NEOs are calculated at the required measurement dates, consistent with the approach used to value the awards at the grant date as described in our Annual Report on Form 10-K for the year ended December 31, 2023. Any changes to the PSU fair values from the grant date are based on our updated stock price at the respective measurement dates and updated performance metric projections, which were as revenue for PSUs granted in 2022 and revenue and operating income for PSUs granted in 2023. Changes to the stock option fair values are based on the updated stock price at the respective measurement dates, in addition to updated expected option term, implied volatility of our stock over the updated expected option term, risk-free rate assumptions, and changes to our non-PEO NEOs.
| · · 2023 | ||||||
|---|---|---|---|---|---|---|
| Adjustments | | | PEO | | | Average non-PEO NEOs |
| Deduction for Amounts Reported under the “Stock Awards” and “Option Awards” Columns in the Summary Compensation Table for Applicable FY | | | (6,132,855) | | | (1,612,079) |
| Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Remain Unvested as of Applicable FY End, determined as of Applicable FY End | | | (1,793,970) | | | (492,661) |
| Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Vested during Applicable FY, determined as of Vesting Date | | | — | | | — |
| Increase/deduction for Awards Granted during Prior FY that were Outstanding and Unvested as of Applicable FY End, determined based on change in ASC 718 Fair Value from Prior FY End to Applicable FY End | | | (1,419,624) | | | (1,428,442) |
| Inspire Medical Systems, Inc. | | | 58 | | | 2024 Proxy Statement |
|---|
PAY VERSUS PERFORMANCE
| · · 2023 | ||||||
|---|---|---|---|---|---|---|
| Adjustments | | | PEO | | | Average non-PEO NEOs |
| Increase/deduction for Awards Granted during Prior FY that Vested During Applicable FY, determined based on change in ASC 718 Fair Value from Prior FY End to Vesting Date | | | 2,732,024 | | | 860,022 |
| Deduction of ASC 718 Fair Value of Awards Granted during Prior FY that were Forfeited during Applicable FY, determined as of Prior FY End | | | — | | | — |
| Increase based on Dividends or Other Earnings Paid during Applicable FY prior to Vesting Date | | | — | | | — |
| Increase based on Incremental Fair Value of Options/SARs Modified during Applicable FY | | | — | | | — |
| Deduction for Change in the Actuarial Present Values reported under the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” Column of the Summary Compensation Table for Applicable FY | | | — | | | — |
| Increase for Service Cost and, if applicable, Prior Service Cost for Pension Plans | | | — | | | — |
| TOTAL ADJUSTMENTS | | | (6,614,425) | | | (2,673,160) |
| (2) | For the relevant fiscal year, represents the cumulative TSR (the “Peer Group TSR”) of the S&P Healthcare Equipment Select Industry Index (the “Peer Group”). |
| (3) | We have selected Revenue as our company-selected measure, which is a GAAP measure. |
Narrative Disclosure to Pay Versus Performance Table
Relationship Between Financial Performance Measures
The line graphs below compare (i) the compensation actually paid to our PEO and the average of the compensation actually paid to our remaining NEOs, with (ii) our cumulative TSR, (iii) our Peer Group TSR, (iv) our Net Income, and (v) our Revenue, in each case, for the fiscal years ended December 31, 2020, 2021, 2022, and 2023.
TSR amounts reported in the graph assume an initial fixed investment of $100.
| Inspire Medical Systems, Inc. | | | 59 | | | 2024 Proxy Statement |
|---|
PAY VERSUS PERFORMANCE
Pay Versus Performance Tabular List
We believe that revenue, adjusted operating income (loss), andinsurance reimbursement approvals, given the Company’s stage of development and market opportunity, represents the most important financial performance measure used by us to link compensation actually paid to our NEOs for the fiscal year ended December 31, 2023.
| Inspire Medical Systems, Inc. | | | 60 | | | 2024 Proxy Statement |
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