AVENUE THERAPEUTICS INC
For the period ended Dec 31, 2023. Filed Mar 18, 2024.
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FY2023 · Filed Mar 18, 2024
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Item 11. Executive Compensation
Named Executive Officers
This section discusses the material components of the executive compensation program for our named executive officers ("NEOs").
The following table presents summary information regarding the total compensation that was awarded to, earned by or paid to our NEOs for services rendered during the years ended December 31, 2023 and 2022.
Summary Compensation Table
As determined in accordance with SEC rules, our “named executive officers” for purposes of this Annual Report on Form 10-K are the two individuals set forth below. The following table sets forth information concerning compensation paid by the Company to its named executive officers for services rendered to it in all capacities during the years ended December 31, 2023 and December 31, 2022.
| Option Awards · Non-equity Incentive Plan Compensation · All Other Compensation | |||||||
|---|---|---|---|---|---|---|---|
| Name and Principal Position | Year | Salary ($) | Bonus ($) | ($)(1) | ($) | ($)(2) | Total ($) |
| Alexandra MacLean | 2023 | 400,000 | — | 800,000 | — | 13,200 | 1,213,200 |
| Chief Executive Officer | 2022 | 153,585 | 120,000 | — | 20,000 | 6,958 | 300,543 |
| David Jin | 2023 | — | — | 260,000 | — | — | 260,000 |
| Interim Chief Financial Officer and Chief Operating Officer | 2022 | — | — | — | — | — | — |
| (1) | Reflects the aggregate grant date fair value of options granted during the fiscal year calculated in accordance with FASB ASC Topic 718. The Company estimates fair value of options granted using the Black-Scholes options pricing model on the date of the grant, using the assumptions described in Note 7. |
| (2) | Reflects employer contributions to the 401(k) retirement plan. |
Narrative Disclosure to Summary Compensation Table
Terms of Employment with Dr. MacLean
On August 1, 2022, the Board of Directors of the Company appointed Alexandra MacLean, M.D. to serve as the Company's Chief Executive Officer. Dr. MacLean is employed on an at-will basis and has no written contract of employment. Her salary was increased from $332,000 to $400,000 in October 2022 and Dr. MacLean is eligible for an annual discretionary bonus of 40%.
Terms of Employment with Mr. Jin
Mr. Jin is employed by the Company on an at-will basis and has no written contract of employment. He currently receives no salary and would be eligible for bonus only on a discretionary basis based upon corporate factors and individual performance as determined by the Board.
Equity Awards
The Compensation Committee has granted each of Dr. MacLean and Mr. Jin the following equity awards under our 2015 Incentive Plan. In 2023, Dr. MacLean received an award of 800,000 options, and Mr. Jin received an award of 250,000 options, each of which vests as described in Footnote 1 to the Outstanding Equity Awards Table below.
Outstanding Equity Awards at Fiscal Year-End
The following awards that were previously granted under our 2015 Plan were outstanding as of December 31, 2023:
| Name · Grant Date · Number of securities underlying unexercised options (#) exercisable · Number of securities underlying unexercised options (#) unexercisable · Option Exercise Price · Option Expiration Date | |||||||
|---|---|---|---|---|---|---|---|
| Alexandra MacLean | 6/29/2023 | 200,000 | (1) | 600,000 | 1.14 | (2) | 6/29/2033 |
| David Jin | 6/30/2023 | 62,500 | (1) | 187,500 | 1.14 | (2) | 6/30/2033 |
(1) Represents options vesting annually in equal installments on August 1, 2023 - 2026.
(2) The closing sales price of the Company's common stock on June 29, 2023.
401(k) Plan
Our named executive officers are eligible to participate in a defined contribution retirement plan that provides eligible U.S. employees with an opportunity to save for retirement on a tax advantaged basis. Eligible employees may defer eligible compensation on a pre-tax or after-tax (Roth) basis, up to the statutorily prescribed annual limits on contributions under the Code. Contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participant's directions. We make matching contributions into the 401(k) plan on behalf of participants equal to 100% on participant contributions up to 4% of their compensation. Participants are immediately and fully vested in all contributions. The 401(k) plan is intended to be qualified under Section 401(a) of the Code with the 401(k) plan’s related trust intended to be tax exempt under Section 501(a) of the Code. As a tax-qualified retirement plan, contributions to the 401(k) plan (except for Roth contributions) and earnings on those contributions are not taxable to the employees until distributed from the 401(k) plan. Our Board may elect to adopt additional qualified or nonqualified benefit plans in the future, if it determines that doing so is in our best interest.
Clawback Policy
Pursuant to Nasdaq listing requirements, we have adopted a policy providing for the recovery of erroneously awarded incentive-based compensation received by executive officers employed by the Company or a subsidiary of the Company during an applicable recovery period (the “Clawback Policy”), effective as of October 2, 2023. Under the Clawback Policy, in the event that financial results upon which a cash or equity-based incentive award was based become the subject of a financial restatement that is required because of material non-compliance with financial reporting requirements, the Compensation Committee will conduct a review of awards covered by the Clawback Policy and recoup any erroneously awarded incentive-based compensation to ensure that the ultimate award reflects the financial results as restated. The Clawback Policy covers any cash or equity-based incentive compensation award that was paid, earned or granted to covered executive officers during the last completed three fiscal years immediately preceding the date on which the Company is required to prepare the accounting restatement.
Director Compensation Program
Our directors set compensation for non-employee directors on an annual basis in accordance with our 2015 Plan. Our non-employee directors received the following compensation for service to the Board during 2023:
Cash Compensation:
| ● | $50,000 annual retainer; |
|---|
| ● | $10,000 additional annual retainer for the Chairman of the Board; and |
|---|
| ● | $10,000 additional annual retainer for the Audit Committee Chair. |
|---|
Equity Compensation:
| ● | Options Award Grant: 100,000 options, which shall vest annually in equal installments over 3 years starting on January 1 following the year they were granted, subject to the director’s continued service on the Board on such date. |
|---|
In addition, each non-employee director receives reimbursement for reasonable travel expenses incurred in attending meetings of our Board and meetings of committees of our Board.
Director Compensation Table
The following table sets forth the cash and other compensation we paid to the non-employee members of our Board for all services in all capacities during 2023.
| Name · Fees Earned or Paid in Cash ($)(1) · Option Awards ($)(2) · All Other Compensation ($) · Total ($)(3) | |||||
|---|---|---|---|---|---|
| Lindsay A. Rosenwald | — | 104,000 | — | 104,000 | |
| Jay Kranzler, M.D., PhD | 58,194 | 104,000 | 50,000 | (4) | 212,194 |
| Faith Charles | 50,000 | 104,000 | — | 154,000 | |
| Neil Herskowitz | 60,000 | 104,000 | — | 164,000 | |
| Curtis Oltmans | 50,000 | 104,000 | — | 154,000 | |
| (1) | Represents cash retainer for serving on our Board and committees of the Board, as applicable. |
| (2) | Reflects the aggregate grant date fair value of options granted during the fiscal year calculated in accordance with FASB ASC Topic 718. The Company estimates the fair value of options granted using the Black-Scholes options pricing model on the date of the grant, using the assumptions described in Note 7. The options vest annually in equal installments on January 1, 2024 - 2026. |
| (3) | As of December 31, 2023, the aggregate number of restricted stock, RSUs, and options issued to each non-employee director that remains unvested was as follows: Dr. Rosenwald, 100,000 options; Dr. Kranzler, 100,000 options and 3,268 restricted stock awards; Ms. Charles, 100,000 options; Mr. Herskowitz, 100,000 options and 3,268 restricted stock awards; Mr. Oltmans, 100,000 options and 3,268 restricted stock awards. |
| (4) | Reflects quarterly consulting fees of $12,500 paid by Baergic, pursuant to a consulting agreement between Dr. Kranzler and Baergic, effective December 1, 2020, whereby Dr. Kranzler provides consulting and advisory services related to his expertise in neuroscience to Baergic in exchange for this quarterly fee. This agreement will remain in effect until the earlier of termination by either party with three days' notice or a "qualified financing" (as defined in Baergic Bio, Inc. Non-Employee Directors Compensation Plan). |
As an employee director of the Company, Dr. MacLean does not receive compensation for her service as a director. Information regarding Dr. MacLean's compensation is provided above under*"Summary Compensation Table"* on page 63*.*
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