Adaptive Biotechnologies Corp

The compensation and human capital committee assesses the effectiveness of our executive compensation program from time to time and reviews risk mitigation and governance matters. The compensation and human capital committee, during its first meeting of the year, addresses achievement of the prior year’s corporate goals for purposes of determining annual cash incentives. Following that, most of the significant adjustments to compensation are made to base salary, annual cash incentive and equity awards at the compensation and human capital committee’s second meeting of the year, typically held during the first quarter.

Specific issues considered with respect to compensation for 2023 included salary, annual cash incentives and equity compensation in light of our fourth year as a public company, the progress of the MRD business toward profitability, the shift in focus of the immune medicine business from diagnostic and therapeutic products and services to drug discovery and development, equity compensation programming, the proper mix of equity vehicles, providing overall pool budgeting and modeling and providing updates with regards to long-term incentive trends among peers, and the non-executive equity compensation program design and effects on employee retention and engagement.

The compensation and human capital committee also considers matters related to individual current and future officer compensation, such as compensation for prospective new hires in support of both our established and emerging lines of business, as well as high-level issues related to compensation strategy, such as efficacy of current strategy, potential modifications to the strategy, risks created by that strategy, new regulatory requirements and/ or the adoption of new trends, and both recruitment and retention concerns, at various meetings throughout the year. For executives other than the Chief Executive Officer, the compensation and human capital committee solicits and considers evaluations and recommendations submitted to the committee by the Chief Executive Officer acting as a representative of management. Such recommendations consider internal pay equity, changes in responsibilities, compensation levels for similar positions in the industry, company performance, total targeted and historical compensation and personal performance and contributions.

In the case of our Chief Executive Officer, Mr. Robins, the evaluation of his performance is conducted by the compensation and human capital committee with feedback from the board of directors, which determines any adjustments to his compensation, as well as awards to be granted. The compensation and human capital committee weighs Mr. Robins’ guidance as a part of a greater assessment of our strategic goals and corporate performance when setting executive officer pay. With respect to Mr. Robins’ compensation, the same considerations are made by the compensation and human capital committee and Mr. Robins is not and cannot be present during voting or deliberations concerning his compensation. In addition, for all executives and directors as part of its deliberations, the compensation and human capital committee may review and consider, as appropriate, materials that it deems relevant, but the compensation and human capital committee does not consider post-employment compensation arrangements, such as executive severance agreements, when determining annual compensation.