☒ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☐ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material Pursuant to Section 240.14a-12 |
☒ | No fee required. |
☐ | Fee paid previously with preliminary materials |
☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
PRELIMINARY COPY – SUBJECT TO COMPLETION
NOTICE OF 2023 ANNUAL GENERAL MEETING
OF SHAREHOLDERS
TO BE HELD ON AUGUST 3, 2023
Dear Shareholder:
The 2023 annual general meeting of shareholders (the “annual meeting”) of Jazz Pharmaceuticals plc, a public limited company formed under the laws of Ireland (the “company”), will be held on Thursday, August 3, 2023, at 9:45 a.m. local time at our corporate headquarters located at Fifth Floor, Waterloo Exchange, Waterloo Road, Dublin 4, Ireland, for the following purposes:
1. To elect by separate resolutions each of the four nominees for director named in the accompanying proxy statement (the “proxy statement”) to hold office until the 2026 annual meeting of shareholders (Proposal 1).
2. To ratify, on a non-binding advisory basis, the appointment of KPMG as the independent auditors of the company for the fiscal year ending December 31, 2023 and to authorize, in a binding vote, the board of directors, acting through the audit committee, to determine the independent auditors’ remuneration (Proposal 2).
3. To approve, on a non-binding advisory basis, the compensation of the company’s named executive officers, or NEOs, as disclosed in the accompanying proxy statement (Proposal 3).
4. To grant the board of directors authority under Irish law to allot and issue ordinary shares for cash without first offering those ordinary shares to existing shareholders pursuant to the statutory pre-emption right that would otherwise apply (Proposal 4).
5. To approve any motion to adjourn the annual meeting, or any adjournments thereof, to another time and place to solicit additional proxies if there are insufficient votes at the time of the annual meeting to approve Proposal 4 (Proposal 5).
To conduct any other business properly brought before the annual meeting.
Proposals 1, 2, 3 and 5 are ordinary resolutions, requiring the affirmative vote of a majority of the votes cast (in person or by proxy) at the annual meeting. Proposal 4 is a special resolution, requiring the approval of not less than 75% of the votes cast (in person or by proxy) at the annual meeting.
In addition to the above proposals, the annual meeting will also receive and consider the company’s Irish statutory financial statements for the fiscal year ended December 31, 2022 and the reports of the directors and auditors thereon. There is no requirement under Irish law that the Irish statutory financial statements be approved by the shareholders, and no such approval will be sought at the annual meeting. Under the company’s Memorandum and Articles of Association (our “articles”), and the Irish Companies Act 2014 (the “2014 Act”), Proposals 1 and 2 are deemed to be ordinary business, and Proposals 3, 4 and 5 are deemed to be special business.
The record date for the annual meeting is June 7, 2023. Only shareholders of record at the close of business on that date may vote at the annual meeting or any adjournment or postponement thereof. The Notice of Internet Availability of Proxy Materials and our proxy materials, which include this proxy statement, our annual letter to shareholders and our 2022 Annual Report on Form 10-K, are first being mailed to shareholders on or about June , 2023.
A shareholder entitled to attend and vote at the annual meeting is entitled to appoint one or more proxies to attend, speak and vote instead of him or her at the annual meeting, using the proxy card provided (or the form of proxy contained in section 184 of the 2014 Act) or using an electronic proxy card by telephone or via the internet in the manner described in this proxy statement. A proxy need not be a shareholder of record. |
Whether or not you expect to attend the meeting, please vote as soon as possible. You may vote your shares:
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Over the Telephone 1-800-690-6903 | |||||||
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Via the Internet www.proxyvote.com |
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By Mail Complete, sign and return proxy card |
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In Person Attend Annual Meeting |
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If you received a proxy card or voting instruction card by mail, you may submit your proxy card or voting instruction card by mailing your proxy card or voting instruction card in the envelope provided. Proxy cards must be received by August 2, 2023. Electronic proxy cards submitted via the internet or by telephone must be received by 11:59 p.m., U.S. Eastern Time, on August 2, 2023. It may not be possible to count proxy cards received after the relevant time towards voting. Proxy cards received will be forwarded to the company’s registered office electronically before commencement of the annual meeting to comply with Irish law. Even if you have voted by proxy, you may still vote in person if you attend the meeting. Please note, however, that if the record holder of your ordinary shares is a broker, bank or other agent, and you wish to vote at the meeting, you must obtain a proxy issued in your name from that record holder.
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Important Notice Regarding the Availability of Proxy Materials for the annual meeting of shareholders to be held on August 3, 2023,
at 9:45 a.m. local time at our corporate headquarters located at Fifth Floor, Waterloo Exchange, Waterloo Road, Dublin 4, Ireland.
The proxy statement, our letter to shareholders, our Irish statutory financial statements and our 2022 Annual Report on Form 10-K are available at https://materials.proxyvote.com/G50871.
By order of the board of directors,
Aislinn Doody, Company Secretary
Dublin, Ireland
June , 2023
TABLE OF CONTENTS
Index of Frequently Requested Information
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Procedures for Shareholder Proposals and Director Nominations for the 2024 Annual Meeting |
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2023 NOTICE OF MEETING AND PROXY STATEMENT
PROXY OVERVIEW
This overview highlights certain information contained elsewhere in this proxy statement and does not contain all of the information that you should consider. You should read the entire proxy statement carefully before voting. For more complete information regarding our business and 2022 performance, please review our Annual Report on Form 10-K for the year ended December 31, 2022 that we filed with the Securities and Exchange Commission, or SEC, on March 1, 2023, which we refer to throughout this proxy statement as the 2022 Annual Report on Form 10-K.
In this proxy statement, unless otherwise indicated or the context otherwise requires, all references to “Jazz Pharmaceuticals,” “Jazz,” “the company,” “we,” “us” and “our” refer to Jazz Pharmaceuticals plc and its consolidated subsidiaries, except when the context makes clear that the time period being referenced is prior to January 18, 2012, in which case such terms are references to Jazz Pharmaceuticals, Inc. and its consolidated subsidiaries. On January 18, 2012, the businesses of Jazz Pharmaceuticals, Inc. and Azur Pharma Public Limited Company, or Azur Pharma, were combined in a merger transaction, or the Azur Merger, in connection with which Azur Pharma was renamed Jazz Pharmaceuticals plc, and we became the parent company of and successor to Jazz Pharmaceuticals, Inc., with Jazz Pharmaceuticals, Inc. becoming our wholly owned subsidiary.
Meeting and Voting Information
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Time and Date:
9:45 a.m., local time on Thursday, August 3, 2023 |
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Place:
Our Corporate Headquarters Fifth Floor, Waterloo Exchange Waterloo Road Dublin 4, Ireland |
Whether or not you expect to attend the meeting, please vote as soon as possible. Please see “Questions and Answers About These Proxy Materials and Voting—How do I vote?” beginning on page 104 below.
Business Overview
We are a global biopharmaceutical company whose purpose is to innovate to transform the lives of patients and their families. We are dedicated to developing life-changing medicines for people with serious diseases—often with limited or no therapeutic options. We have a diverse portfolio of marketed medicines and novel product candidates, from early- to late-stage development, in neuroscience and oncology. Within these therapeutic areas, we strive to identify new options for patients by actively exploring small molecules and biologics, and through innovative delivery technologies and cannabinoid science.
Our strategy for sustainable growth is rooted in executing commercial launches and ongoing commercialization of our portfolio of products in global markets; advancing robust research and development, or R&D, programs and delivering impactful clinical results; effectively deploying capital to strengthen the prospects of achieving our short- and long-term goals through strategic corporate development; and delivering strong financial performance. We focus on patient populations with high unmet needs. We identify and develop differentiated therapies for these patients that we expect will be long-lived assets and that we can support with an efficient commercialization model. In addition, we leverage our efficient, scalable operating model and integrated capabilities across our global infrastructure to effectively reach patients around the world.
In January 2022, we announced our Vision 2025, which aims to deliver sustainable growth and enhanced value, driving our continued transformation to an innovative, high-growth global pharmaceutical leader. The three core components of our Vision 2025 focus on commercial execution, pipeline productivity and operational excellence.
JAZZ PHARMACEUTICALS | 2023 Proxy Statement 1
2023 NOTICE OF MEETING AND PROXY STATEMENT
Proxy Overview (continued)
Our strategy to deliver sustainable growth and enhanced value is focused on:
• | Strong commercial execution to drive diversified revenue growth and address unmet medical needs of our patients across our product portfolio, which focuses on neuroscience and oncology medicines; |
• | Expanding and advancing our pipeline to achieve a valuable product portfolio of durable, highly differentiated programs; |
• | Continuing to build a flexible, efficient and productive development engine for targeted therapeutic areas to identify and progress early-, mid- and late-stage assets; |
• | Identifying and acquiring novel product candidates and approved therapies to complement our existing pipeline and commercial portfolio; |
• | Investing in an efficient, scalable operating model and differentiated capabilities to enable growth; and |
• | Unlocking further value through indication expansion and entry into global markets. |
A key aspect of our strategy is our continued investment in expanding our research and development organization and initiatives. We actively explore new options for patients including novel compounds, small molecule advancements, biologics and innovative delivery technologies. We are focused on research and development activities within neuroscience and oncology therapeutic areas, such as our expansion into movement disorders and solid tumors, and exploring and potentially investing in adjacent therapeutic areas.
Our lead marketed products are:
Neuroscience
• | Xywav® (calcium, magnesium, potassium, and sodium oxybates) oral solution, a product approved by the U.S. Food and Drug Administration, or FDA, in July 2020 and launched in the U.S. in November 2020 for the treatment of cataplexy or excessive daytime sleepiness, or EDS, in patients with narcolepsy seven years of age and older, and also approved by FDA in August 2021 for the treatment of idiopathic hypersomnia, or IH, in adults and launched in the U.S. in November 2021. Xywav contains 92% less sodium than Xyrem®; |
• | Xyrem (sodium oxybate) oral solution, a product approved by FDA and distributed in the U.S. for the treatment of cataplexy or EDS in patients with narcolepsy seven years of age and older; Jazz also markets Xyrem in Canada for the treatment of cataplexy in patients with narcolepsy. Xyrem is also approved and distributed in the European Union, or EU (EU market authorizations include Northern Ireland), Great Britain and other markets through a licensing agreement; and |
• | Epidiolex® (cannabidiol) oral solution, a product approved by FDA and launched in the U.S. in 2018 by GW Pharmaceuticals plc, or GW, and currently indicated for the treatment of seizures associated with Lennox-Gastaut syndrome, or LGS, Dravet syndrome, or DS, or tuberous sclerosis complex, or TSC, in patients one year of age or older; in the EU and Great Britain (where it is marketed as Epidyolex®) and other markets listed in the table below, it is approved for adjunctive treatment of seizures associated with LGS or DS, in conjunction with clobazam (EU and Great Britain only), in patients 2 years of age and older and for adjunctive treatment of seizures associated with TSC in patients 2 years of age and older (select markets). |
Oncology
• | Rylaze® (asparaginase erwinia chrysanthemi (recombinant)-rywn), a product approved by FDA in June 2021 and launched in the U.S. in July 2021 for use as a component of a multi-agent chemotherapeutic regimen for the treatment of acute lymphoblastic leukemia, or ALL, or lymphoblastic lymphoma, or LBL, in adults and pediatric patients aged one month or older who have developed hypersensitivity to E. coli-derived asparaginase; |
• | Zepzelca® (lurbinectedin), a product approved by FDA in June 2020 under FDA’s accelerated approval pathway and launched in the U.S. in July 2020 for the treatment of adult patients with metastatic small cell lung cancer, or SCLC, with disease progression on or after platinum-based chemotherapy; in Canada, |
2 2023 Proxy Statement | JAZZ PHARMACEUTICALS
2023 NOTICE OF MEETING AND PROXY STATEMENT
Proxy Overview (continued)
Zepzelca received conditional approval in September 2021 for the treatment of adults with Stage III or metastatic SCLC, who have progressed on or after platinum-containing therapy; |
• | Defitelio® (defibrotide sodium), a product approved in the U.S. and Brazil for the treatment of hepatic veno-occlusive disease, or VOD, with renal or pulmonary dysfunction following hematopoietic stem cell transplantation, or HSCT, and in Japan for the treatment of hepatic sinusoidal obstruction syndrome (hepatic VOD). It is currently approved in the EU, Great Britain and other markets listed in the table below for the treatment of severe hepatic VOD, also known as sinusoidal obstructive syndrome, or SOS, in HSCT therapy. It is indicated in adults and pediatric patients over 1 month of age; and |
• | Vyxeos® (daunorubicin and cytarabine) liposome for injection, a product approved in the U.S., Canada, EU, Great Britain and other markets listed in the table below (marketed as Vyxeos® liposomal in the EU, Great Britain and other markets) for the treatment of adults with newly-diagnosed therapy-related acute myeloid leukemia, or t-AML, or AML with myelodysplasia-related changes, or AML-MRC. An expanded indication was granted in the U.S. for the treatment of newly diagnosed t-AML or AML-MRC in pediatric patients aged 1 year and older. |
Information About Our Board of Directors
Director Nominees and Continuing Directors
Summary information about our director nominees and continuing directors, including their key skills and experiences that are relevant to serving on our board, is provided in the charts below. See pages 17 to 39 for more information.
Our nominating and corporate governance committee examines the experience and expertise of our board as a whole to ensure alignment between the abilities and contributions of our board and our long-term strategic priorities by primarily emphasizing expertise in global and U.S. commercialization, in scientific development, in financial management and in corporate development transactions among other skill sets. All of our directors exhibit high commitment, integrity, collegiality, innovative thinking, sound business judgment and a knowledge of corporate governance requirements and practices.
Name |
Age | Director Since |
Principal Position | Independent | Other Current Public Boards |
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2023 Director Nominees |
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Bruce C. Cozadd |
59 | 2003 | (1) | Chairperson and Chief Executive Officer, Jazz Pharmaceuticals plc | No | 1 | ||||||||||||
Heather Ann McSharry |
61 | 2013 | Director, International Airlines Group, S.A. | Yes | 1 | |||||||||||||
Anne O’Riordan |
55 | 2019 | Group Director of Digital, Jardine Matheson Limited | Yes | 0 | |||||||||||||
Rick E Winningham |
63 | 2010 | (1) | Chairperson and Chief Executive Officer, Theravance Biopharma, Inc. | Yes | 1 | ||||||||||||
Continuing Directors |
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Jennifer E. Cook |
57 | 2020 | Director, BridgeBio Pharma, Inc. and Denali Therapeutics Inc. | Yes | 2 | |||||||||||||
Patrick G. Enright |
61 | 2009 | (1) | Managing Director, Longitude Capital | Yes | 1 | ||||||||||||
Peter Gray |
68 | 2013 | Chairperson, Teckro, Inc. and Director, Abzena | Yes | 0 | |||||||||||||
Seamus Mulligan |
62 | 2012 | Director, Jazz Pharmaceuticals plc | Yes | 0 | |||||||||||||
Kenneth W. O’Keefe |
56 | 2004 | (1) | Founder, BPOC, LLC | Yes | 0 | ||||||||||||
Norbert G. Riedel, Ph.D. |
65 | 2013 | Chairperson, Eton Pharmaceuticals, Inc. and Director, Cerevel Therapeutics Holdings, Inc. | Yes | 2 | |||||||||||||
Mark D. Smith, M.D. |
71 | 2020 | Professor, University of California, San Francisco and Director, Phreesia, Inc. and Teladoc Health, Inc. | Yes | 2 | |||||||||||||
Catherine A. Sohn, Pharm.D. |
70 | 2012 | Chairperson, BioEclipse Therapeutics, Inc. and Director, Altimmune, Inc. and Axcella Health Inc. | Yes | 2 |
(1) | Includes service on the board of directors of Jazz Pharmaceuticals, Inc., our predecessor. |
JAZZ PHARMACEUTICALS | 2023 Proxy Statement 3
2023 NOTICE OF MEETING AND PROXY STATEMENT
Proxy Overview (continued)
Director Diversity
11 of our 12 directors are independent and our board has a mix of relatively newer and longer-tenured directors. The charts below show board makeup by various characteristics with respect to our director nominees and continuing directors:
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Board Diversity Matrix (as of June 1, 2023) |
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Total Number of Directors |
12 | |||||||||||||||
Female | Male | Non-Binary | Did Not Disclose Gender |
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Part 1: Gender Identity |
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Directors |
4 | 8 | — | — | ||||||||||||
Part II: Demographic Background |
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African American or Black |
— | 1 | — | — | ||||||||||||
White |
4 | 7 | — | — | ||||||||||||
LGBTQ+ |
1 |
Shareholder and Other Stakeholder Engagement
We value engaging with and obtaining feedback from our shareholders and view our shareholder engagement efforts as essential to Jazz’s success. We continuously engage with our shareholders in many forms and forums from industry conferences, non-deal roadshows, to direct one-on-one meetings. Jazz seeks to act in the long-term interests of its shareholders and recognizes the value in building long lasting and trusting relationships with them. Through these relationships, Jazz has obtained valuable insight on a variety of topics, including our business and growth strategy, corporate governance practices, executive compensation matters, and various other environmental, social and governance (ESG) matters. Shareholder feedback is reported to our compensation & management development committee, or compensation committee, (and our nominating and corporate governance committee, as applicable) throughout the year.
4 2023 Proxy Statement | JAZZ PHARMACEUTICALS
2023 NOTICE OF MEETING AND PROXY STATEMENT
Proxy Overview (continued)
The following graphic describes our typical shareholder outreach and engagement cycle.
In 2022 and early 2023, members of our management team, and in many cases members of our board of directors, including members of our compensation committee and our nominating and corporate governance committee, actively engaged with a significant number of our large shareholders to gain a better understanding of their views regarding our executive compensation program, our ESG strategy and other corporate governance matters. Specifically, we reached out to approximately 34 of our largest shareholders (representing over 58% of our outstanding ordinary shares). We held one-on-one governance related meetings with 11 of our largest shareholders (representing over 37% of our outstanding ordinary shares). We will continue outreach and dialogue with our largest shareholders in 2023.
JAZZ PHARMACEUTICALS | 2023 Proxy Statement 5
2023 NOTICE OF MEETING AND PROXY STATEMENT
Proxy Overview (continued)
We have taken a number of significant and responsive actions over the past several years to incorporate feedback received from shareholders, as highlighted in the following table.
Topic |
What We Heard | What We Did | ||
ESG |
Shareholders and stakeholders continued to highlight the importance of ESG. | • In 2022, we obtained feedback from various external stakeholders to help us identify and prioritize the most impactful ESG matters for our business and our stakeholders. We plan to discuss the results of our materiality assessment in our next ESG Report for the year 2022.
• In 2022, we issued our inaugural ESG Report for the year 2021 setting out the pillars of our ESG strategy, Patients, People, Community and Planet and recognizing the critical importance of these ESG pillars in achieving our near and long-term business objectives including Vision 2025.
• Outlined in the committee charter, the nominating and corporate governance committee has oversight responsibilities for ESG strategy and practices. Our Executive Vice President and Chief Legal Officer has executive oversight for ESG strategic planning, risk management and reporting. | ||
Board Skills |
Shareholders wanted enhanced disclosure regarding the most significant skills and qualifications that each member of our board possesses. | We have enhanced our director skills disclosure by presenting our directors’ skills on an individual basis and by providing a description of each skill to help shareholders understand how each skill helps contribute to effective oversight. | ||
Director Commitments |
Shareholders expressed interest in our policies and practices regarding director commitments. | We amended our Corporate Governance Guidelines to provide that directors may not serve on more than five public company boards (including Jazz’s board) and if a director is also the chief executive officer of a public company, that director may not serve on more than three public company boards (including Jazz’s board). We have also amended both the charter of the nominating and corporate governance committee and our Corporate Governance Guidelines to ensure that when performing our annual review of each of our director’s time commitments and service on other companies’ boards, we also review their service on other companies’ board committees. | ||
Board Refreshment |
Shareholders continued to stress the importance of board refreshment and the role it plays in enhancing skills and capabilities and increasing board diversity. | Jazz recognizes the critical importance of balancing the appropriate representation of experience and skills on our board of directors to fit the current and future needs of our company. Our board of directors understands that strategic board refreshment is essential to Jazz’s success and effective board oversight. With this purpose in mind, the nominating and corporate governance committee seeks out experienced candidates with a track record for commercial success and/or drug development, that exhibit strength of character, judgment and principles of diversity, including diversity of race, ethnicity, gender, age, geographic residency, cultural background and professional experiences. |
6 2023 Proxy Statement | JAZZ PHARMACEUTICALS
2023 NOTICE OF MEETING AND PROXY STATEMENT
Proxy Overview (continued)
Topic |
What We Heard | What We Did | ||
We have an ongoing board evaluation process, with a mix of one-on-ones with the Lead Independent Director, surveys and external assessments. Board refreshment is a consistent theme of our board and committee evaluations. | ||||
Compensation |
While shareholders provided positive feedback regarding our pay-for-performance alignment, we heard a strong preference that our long-term incentive program include performance-based equity awards. Shareholders raised concerns that our burn rate is higher than some of our peers. Shareholders disfavored the “evergreen provision” in our 2011 Equity Incentive Plan.
Shareholders also expressed their desire for our annual performance bonus plan to have an explicit cap on payouts to avoid the potential of excessive payouts not tied to performance and to mitigate certain risks inherent in incentive plans. |
In response to shareholder feedback:
• We incorporated performance stock units (PSUs) into our program in 2021 and we continue to grant PSUs representing approximately 50% of each executive officer’s target equity compensation;
• Since 2021, stock options have been eliminated from our long-term incentive program, and 100% of the awards granted thereunder have been in the form of PSUs and restricted stock units (RSUs) which reduce our burn rate and result in less dilution than stock options;
• The evergreen provision in the 2011 Equity Incentive Plan expired in January 2022 and we will not adopt a new one in the future;
• We adopted and continue to maintain an explicit cap on payouts under annual performance bonus awards at 300% of an individual’s target award;
• We selected performance goals for our executive compensation program that focus specifically on (i) growing and diversifying our commercial portfolio and (ii) enhancing the value of our pipeline to create a meaningful incentive and reward for successfully driving transformation and delivery of long-term sustainable value to shareholders and life-changing medicines to patients;
• We structured our PSUs so that payout is based on financial and operational goal performance, which is then adjusted, based on the rate of return of our stock price relative to peers, or a relative total shareholder return modifier (TSR). The compensation committee believes that having a TSR modifier helps balance the importance of providing executives clearer line of sight to payout opportunities using financial and operational measures with the need to ensure that those payouts are aligned with shareholders’ experience during the performance period;
• We further refined our 2022 PSUs so that objectives are measured over a three-year performance period;
• We also have a policy for recoupment of incentive compensation, or a clawback policy, which is designed to mitigate risks generally associated with incentive compensation and allows us to recover amounts of incentive compensation under certain circumstances if we are required to restate our financial results due to material noncompliance with any financial requirement and the misconduct of an executive officer covered by the policy contributed to such noncompliance. |
We also continue to evaluate feedback received from shareholders on other topics, including our classified board structure, setting climate change targets and reporting on workforce diversity.
JAZZ PHARMACEUTICALS | 2023 Proxy Statement 7
2023 NOTICE OF MEETING AND PROXY STATEMENT
Proxy Overview (continued)
Our ESG Approach
Jazz is committed to creating a company where the culture reflects three important goals—our purpose to serve patients, be a great place to work, and to live our core values of integrity, collaboration, passion, innovation, and pursuit of excellence. Our values, underpinned by good corporate governance, social responsibility and environmental stewardship anchor our corporate strategy and make up key elements of our vision to deliver on our commitment to generate long-term sustainable value for patients, employees, shareholders, and other stakeholders.
The pillars of our ESG strategy are Patients, People, Community and Planet. Jazz recognizes the critical importance of these ESG pillars in achieving our near and long-term business objectives including Vision 2025.
In 2022, as a key step in the development of our ESG strategy, we conducted a materiality assessment to identify and prioritize the most impactful ESG topics for our business and our stakeholders1. Jazz surveyed and solicited feedback from a selection of internal and external stakeholders, from global senior leaders and employees to shareholders, suppliers and patient groups. Jazz will use the assessment results to inform strategic decision-making, guide our ESG reporting, and further embed ESG considerations into our corporate strategy and company culture. Additionally, we believe this process will enhance our ability to engage stakeholders in meaningful ways.
As we build on the outcomes of this assessment and make progress on the development of our ESG multi-year strategy, further information on our ESG priorities will be shared in our future reporting activities.
ESG Board Oversight and Management
The board as a whole oversees the strategy for addressing ESG risks and opportunities that impact our business. Each committee of the board oversees ESG matters across our business operations in the areas that align with their respective responsibilities. The nominating and corporate governance committee has delegated oversight responsibilities for ESG strategy and works with senior management on implementing, reviewing, and providing guidance to the board where ESG matters are expected to have a significant impact on our performance, business activities or reputation. The compensation committee works with the full board to oversee human capital management matters, including Diversity, Equity, Inclusion and Belonging (DEIB), a core aspect of our ESG approach. The audit committee has primary responsibilities for overseeing risks related to information security, including cybersecurity. See the section entitled “Corporate Governance and Board Matters” on page 26 for a further discussion of our board and board committees.
Our Executive Vice President and Chief Legal Officer has executive oversight for ESG strategic planning, risk management, and reporting. A cross-functional team of senior leaders and subject matter experts supports ESG efforts across the organization. Senior management regularly briefs the board and its committees on ESG progress.
ESG Reporting
In 2022, we published our inaugural ESG Report reflecting our efforts through 2021. The Report was prepared with reference to the GRI Standards and aligns with the Sustainability Accounting Standards Board (SASB) Agricultural Products and Biotechnology & Pharmaceuticals Reporting Standards that apply to our business, to the extent indicated herein. In developing the Report, we also referenced insights from our materiality assessment and considered guidance, standards and relevant topics from external ESG and sustainability stakeholders. We intend to continuously evolve our ESG reporting and disclosure to better meet the expectations of our stakeholders.
1 | The ESG topics determined to be most impactful for purposes of the materiality assessment mentioned above, with reference to the Global Reporting Initiative (GRI) Standards and the Sustainability Accounting Standards Board (SASB) Agricultural Products and Biotechnology & Pharmaceuticals Reporting Standards, are not necessarily material for U.S. federal securities law reporting or other purposes. |
8 2023 Proxy Statement | JAZZ PHARMACEUTICALS
2023 NOTICE OF MEETING AND PROXY STATEMENT
Proxy Overview (continued)
ESG Highlights
Patients
We are innovating to develop life-changing medicines for patients who often have limited or no therapeutic options. We strive to help patients get access to the medications they need, and we advocate for policies that support the lives of patients.
• | Patient safety is among our top concerns. We have implemented systems and processes designed to help us meet our legal and regulatory obligations related to product safety including to track and report adverse events/experiences, and product complaints. We continue to enhance our activities to meet the expectations of patients and other stakeholders |
• | For over two decades our commitment to public health and patient safety has included implementing a restricted distribution system for our oxybate products, which since 2007 has been known as a Risk Evaluation and Mitigation Strategy (REMS) in the U.S. We engage and work closely with stakeholders including regulatory authorities and physicians, with the goal of meeting the expectations of the evolving environment. |
• | Quality in our products and services is essential. We maintain quality and regulatory compliance systems that are designed to help us meet both internal and external standards. Each of us is responsible for the quality of our work and for implementing the appropriate quality standards. |
• | Continually working to expand patient access to medicines, including through our patient assistance programs, product donations to global aid organizations and monetary contributions to independent charities. We have been able to provide greater support and access to our medicines in markets around the world. |
• | We strive to help patients get access to the medications they need. Our JazzCares™ patient assistance programs offer Xywav, Xyrem, Epidiolex, Rylaze, Zepzelca, Defitelio and Vyxeos to eligible patients who otherwise cannot afford the medications. Our JazzCares programs are designed to give patients the support and assistance they need throughout their treatment journey. |
• | Enhancing our internal capabilities within the organization related to patient engagement and advocacy. We created a new advocacy role for R&D that was filled with a candidate with nearly 20 years of global experience in the biopharmaceutical industry building advocacy and engagement functions. We have focused strategies on incorporating patient and caregiver perspectives on needs into our review of trial protocols and target product profiles. |
• | Building significant awareness programs to educate and inform patient communities on important information relevant to treatment of conditions. This includes collaboration with various patient groups including the American Heart Association and sleep patient groups to educate and inform on the relationship between sleep disorders and cardiovascular comorbidities. |
• | In partnership with the Child Neurology Foundation, Jazz is supporting the establishment of a program in several Epilepsy Centers of Excellence to enhance genetic testing and reduce the time to diagnosis for rare epilepsies. In addition, we partner with several organizations to develop and deliver disease and CBD education. |
• | In partnership with Stand Up to Cancer (SU2C), we have development initiatives to raise awareness of the need for earlier diagnosis and screening of small cell lung cancer in communities of color. Utilizing digital ethnography research we are seeking to understand the path to treatment for Black and Hispanic patients and caregivers with SCLC and leveraging the insights to increase awareness of, and screenings for, SCLC among this population. |
People
We are committed to creating a company where the culture embodies our corporate purpose to innovate to transform the lives of patients and their families and reflects our key goals: (1) be a great place to work; and (2) live our core values of Integrity, Collaboration, Passion, Innovation and Pursuit of Excellence.
• | We conduct recurring employee pulse surveys to gather employee feedback on what they value about the workplace experience. We consistently achieve participation rates above 75% and over 80% of |
JAZZ PHARMACEUTICALS | 2023 Proxy Statement 9
2023 NOTICE OF MEETING AND PROXY STATEMENT
Proxy Overview (continued)
employees would recommend Jazz as a good place to work based on our most recently completely pulse survey in February 2023. Survey results provide valuable insights into where to focus, prioritize, and create a greater sense of belonging while informing initiatives aligned with our corporate objectives. |
• | We continue to develop our flexible working model “Jazz Remix” which aims to provide eligible employees work location flexibility (including remote work capabilities). This dynamic and agile approach to working arrangements is designed to further our ability to connect globally, collaborate, innovate and perform. |
• | We believe that fostering an employee community that fosters diversity and inclusion leads to innovation. Our employee resource teams, Jazz ConcERTos, are self-led teams of employee volunteers with diverse backgrounds that deliver global events to educate the organization on important issues, celebrate important dates on our cultural calendar, and act as employee listening hubs sharing feedback with decision makers on inclusive work practices. In addition, we have five active affinity forums at Jazz which provide a space for employees from various traditionally underrepresented groups and their allies to build community. The five forums include, ¡HOLA Jazz! (Hispanic Organization for Leadership Advancement), JazzSoul, JAWS (Jazz Associate of Women Supporters), Jazz Pride, and Pan-Asian. As of the end of the first quarter of 2023, 27% of our global workforce were active in employee resource teams. |
• | We have established goals related to increasing the diversity of the representation of women and people of color in our workforce, particularly at the leadership level (i.e., employees at executive director and above). In this regard, we have made some meaningful progress, as demonstrated by the following, as of February 17, 2023: |
¡ | 55% of our executive committee is diverse in terms of gender, ethnicity and sexual orientation. |
¡ | Females represent 54% of our global workforce and 46% at the global leadership level (employees at executive director and above). |
¡ | People of color represent 33% of our U.S. workforce and 19% at the U.S. leadership level. |
• | Our Global Talent Acquisition Sourcing Strategy seeks to attract, select, and secure diverse talent for our organization through building connections, attending diversity events, providing training workshops, posting to diverse job boards and partnering with local community channels. |
• | Jazz encourages employees to complete development plans with their managers that outline growth interests and focus areas. Plans include customized, continuous learning opportunities that align with their career ambitions. Development and succession plans are regularly reviewed to successfully maintain business operations. We continue to evolve performance management, striving for a more meaningful and inclusive experience for all employees. |
• | We invest in our talent pipeline by providing leadership development experiences (including and not limited to training) appropriate to management level and professional experience for many levels. In 2022, over 600 functional and people leaders participated in three quarterly targeted leadership development activities supporting transformation and integration. We continue to develop our top leadership, or Global Leadership Team (top 70 leaders), to build leadership excellence, strengthen relationships and encourage cross functional collaboration in pursuit of our enterprise strategic goals. |
• | We provide our employees with what we believe to be market competitive and locally relevant compensation and benefits that support our overarching strategy to attract, retain and reward highly talented employees in an extremely competitive and dynamic industry. |
• | Jazz offers full company participation in our long-term incentive plan providing employees with an ownership stake. |
• | Our manufacturing operations have Health and Safety Systems that are designed to fully comply with the requirements of the European Union Framework Directive for Health and Safety and that are designed to meet the requirements of section 6.4.6 of ISO 26000 (Labour Practices – Health and Safety at Work). |
10 2023 Proxy Statement | JAZZ PHARMACEUTICALS
2023 NOTICE OF MEETING AND PROXY STATEMENT
Proxy Overview (continued)
Community
We aim to be an engaged corporate citizen globally and in our communities. We work through direct philanthropy, employee volunteerism and with partners to execute key initiatives that reflect our social impact goals and values.
In 2022 Jazz provided charitable support to over 70 organizations globally related to improving patient access and care, addressing healthcare and wellbeing of our communities, disaster relief and humanitarian crises as well as helping to enhance diversity in our industry.
• | Jazz provided financial donations to Direct Relief in support of Hurricane disasters in Florida and Puerto Rico in addition to earthquake relief in Turkey and Syria. |
• | Jazz encourages global volunteer day which provides employees time off with full pay to give back to their communities. In recognition of International Volunteers’ Day, several of our UK colleagues spent a day working with FareShare, the UK’s national network of charitable food redistributors. German colleagues used volunteer day to support facilities for patients with Down syndrome and helped to remove old furniture from local nurseries. |
• | In Italy, Jazz partnered with the Rise Against Hunger association to develop a charity initiative to benefit families and children in Zimbabwe, and organized a day dedicated to packing and assembling thousands of food rations for Schooling Programs in developing countries. |
• | Our actions to support health equity include a commitment to improving the diversity within STEM fields and among healthcare professionals. Jazz also developed a novel program in partnership with Momentum and Value for People of Color whereby members of our R&D organization mentored students interested in the healthcare field and hosted a group of summer interns. |
• | Jazz is actively involved in fostering diversity within the legal profession through our participation in various groups including the Leadership Council of Legal Diversity. Since 2020, the company has hosted multiple diverse interns within the legal department. Attorneys within the legal department provide pro-bono legal services through a variety of programs including providing assistance to seniors in preparation of life planning documents and assisting individuals in the renewal of their Deferred Action for Childhood Arrivals (DACA) applications. |
Planet
We seek to operate our business in an environmentally responsible way and are committed to meeting evolving regulatory standards for climate impact, to take steps to reduce our environmental impact and to using sustainable practices wherever feasible.
• | In 2022, we published our first set of environmental performance data reflecting calendar year 2021 including energy consumption and information on energy management and water management. |
• | Jazz maintains an environmental management system (EMS) and policies across our manufacturing and development operations to comply with applicable laws, directives, and regulations on environmental protection and sustainability. In addition to the harmonized EMS, Jazz continues to identify opportunities to reduce our environmental footprint in relation to greenhouse gas emissions, energy consumption, water use, and waste generation and disposal. |
• | The manufacturing and development site Villa Guardia, Italy maintains ISO 14001:2015 and EU Eco-Management and Audit Scheme certification which sets the standard for an EMS and supports Jazz in its efforts to improve our environmental performance through more efficient use of resources and reduction of waste. |
• | Both our Athlone, Ireland and Villa Guardia, Italy manufacturing and development sites purchase and consume renewable electricity. |
• | Our Athlone, Ireland, Kent Science Park, U.K., and Villa Guardia, Italy manufacturing sites have implemented energy efficiency and conservation measures including LED light conversions, energy efficient chiller replacements, as well as installations electric vehicle charging stations. |
JAZZ PHARMACEUTICALS | 2023 Proxy Statement 11
2023 NOTICE OF MEETING AND PROXY STATEMENT
Proxy Overview (continued)
Summary of Shareholder Voting Matters and Board Recommendations
For the reasons set forth below and in the rest of this proxy statement, our board of directors recommends that you vote your shares “FOR” each of the nominees named below for director to hold office until the 2026 annual meeting of shareholders and “FOR” each of the other proposals.
Proposal 1 — Election of Directors |
The board of directors recommends a vote “FOR” each of the named nominees.
Vote required to elect each nominee to hold office until the 2026 annual meeting of shareholders: Affirmative vote of a majority of the votes cast on his or her election.
For more information, see Proposal 1 starting on page 17.
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We are asking our shareholders to vote, by separate resolutions, on the election of each of Bruce C. Cozadd, Heather Ann McSharry, Anne O’Riordan and Rick E Winningham to hold office until the 2026 annual meeting of shareholders. Detailed information about each nominee’s background and experience can be found beginning on page 17.
Each of the nominees for director was nominated for election by the board of directors upon the recommendation of our nominating and corporate governance committee. Our board of directors believes that each nominee has the specific experience, qualifications, attributes and skills to serve as a member of the board of directors and has demonstrated the ability to devote sufficient time and attention to board duties and to otherwise fulfill the responsibilities required of directors. See “Corporate Governance and Board Matters—Director Commitments” beginning on page 30 for more information. |
Proposal 2 — Ratify, on a Non-Binding Advisory Basis, the Appointment of Independent Auditors and Authorize, in a Binding Vote, the Board of Directors, Acting Through the Audit Committee, to Determine the Independent Auditors’ Remuneration |
The board of directors recommends a vote “FOR” this proposal.
Vote required for approval: Affirmative vote of a majority of the votes cast on the proposal.
For more information, see Proposal 2 starting on page 96. |
Under Irish law, KPMG will be deemed to be reappointed as our independent auditors for the financial year ending December 31, 2023, without needing a shareholder vote at the annual meeting. However, our shareholders are being asked to ratify KPMG’s appointment on a non-binding advisory basis because we value our shareholders’ views on the company’s independent auditors. The board of directors and the audit committee intend to consider the results of this vote in making determinations in the future regarding the appointment of the company’s independent auditors.
Our shareholders are also being asked to authorize the board of directors, acting through the audit committee, to determine KPMG’s remuneration. This authorization is required by Irish law.
Less than 1% of the total fees that KPMG billed us for services last year were for services other than audit, audit-related and tax compliance services. | |
12 2023 Proxy Statement | JAZZ PHARMACEUTICALS
2023 NOTICE OF MEETING AND PROXY STATEMENT
Proxy Overview (continued)
Proposal 3 — Non-Binding Advisory Vote on Executive Compensation |
The board of directors recommends a vote “FOR” this proposal.
Vote required for approval: Affirmative vote of a majority of the votes cast on the proposal.
For more information, see Proposal 3 starting on page 98. |
We are asking our shareholders for advisory approval of our NEOs’ compensation. This non-binding advisory vote is commonly referred to as a “say-on-pay” vote. Our executive compensation program is aligned with our business strategy and priorities and encourages executive officers to work for meaningful shareholder returns consistent with our pay-for-performance philosophy. Our executive compensation program focuses on target total direct compensation, combining short-term and long-term components, cash and equity, and fixed and variable payments, in the proportions that we believe are the most appropriate to incentivize and reward our executive officers for achieving our corporate goals while minimizing incentives for excessive risk-taking or unethical conduct. Our annual performance bonus awards are not earned unless pre-determined levels of performance are achieved against annual corporate objectives approved by our board of directors at the beginning of the year. We also have executive share ownership guidelines to further support our ownership culture and align the interests of executive officers and shareholders. Further, in 2021 we implemented a new performance-based equity program tied to the achievement of critical multi-year financial and other strategic objectives as well as relative total shareholder return goals, with performance-based restricted stock unit awards making up approximately 50% of each NEO’s target annual equity grant, and time-vested restricted stock unit awards making up the other approximately 50%. Our 2022 advisory say-on-pay proposal was approved by approximately 94% of total votes cast. |
Proposal 4 — Board Authority to Issue Shares for Cash Without First Offering Shares to Existing Shareholders |
The board of directors recommends a vote “FOR” this proposal.
Vote required for approval: Affirmative vote of 75% of the votes cast on the proposal.
For more information, see Proposal 4 starting on page 100. |
We are asking our shareholders to renew the authority granted to the board of directors at the 2022 annual meeting of shareholders, or 2022 AGM , to opt out of the pre-emption rights provision in the event of an issuance of shares for cash up to the amount of 20% of our issued ordinary share capital in the aggregate, for a period expiring on the date being 18 months from the passing of the resolution set forth in Proposal 4, unless otherwise varied, renewed or revoked.
In general, unless otherwise authorized by shareholders, before an Irish public limited company can issue shares for cash (including rights to subscribe for, convert into or otherwise acquire any shares) to any new shareholders, it must first offer the shares or rights to existing shareholders of the company pro-rata to their existing shareholdings. Under Irish law, the authority to opt-out of this pre-emption right, which we call the pre-emption opt-out authority, can be granted by shareholders for a maximum period of five years, at which point it lapses unless renewed by shareholders.
Granting our board of directors the pre-emption opt-out authority on the terms set forth in Proposal 4 is vital to the way we intend to advance our business. In this regard, our strategy for sustainable growth is rooted in executing commercial launches and ongoing |
JAZZ PHARMACEUTICALS | 2023 Proxy Statement 13
2023 NOTICE OF MEETING AND PROXY STATEMENT
Proxy Overview (continued)
commercialization initiatives; advancing robust research and development programs and delivering impactful clinical results; effectively deploying capital to strengthen the prospects of achieving our short- and long-term goals through strategic corporate development; and delivering strong financial performance. In January 2022, we announced our Vision 2025, which aims to deliver sustainable growth and enhanced value, driving our continued transformation to an innovative, high-growth global pharmaceutical leader. The three core components of our Vision 2025 focus on commercial execution, pipeline productivity and operational excellence. In this regard, strategic capital allocation will continue to be an important driver of our growth, including investing in our current pipeline and facilitating our ability to continue corporate development.
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Our strategy for growth depends in part on our ability to quickly take advantage of strategic opportunities, including potential acquisitions and other capital-intensive transactions that we believe would increase shareholder value. Many of these opportunities are highly competitive, with multiple parties often offering comparable or even the same economics. If Proposal 4 is not approved, in each case where we propose to issue shares for cash consideration after January 28, 2024 and/or beyond the limits of our current pre-emption opt-out authority, we would first have to offer those shares on the same or more favorable terms to our existing shareholders pro-rata following a specific Irish statutory procedure and timeline in the absence of a new shareholder approval to dis-apply the pre-emption rights provision to the issuance of those shares. This could put us at a distinct disadvantage vis-à-vis many of our peers in competing for acquisitions and similar transactions (particularly since many of the companies with which we compete strategically are listed and incorporated in the U.S. and are not subject to similar pre-emption right restrictions), and might make it difficult for us to complete such transactions in a timely manner or at all, thus potentially limiting our ability to further our strategy for growth by deploying capital to meet strategic goals that are in the best interests of our shareholders. And importantly, Jazz remains, like all U.S.-incorporated companies listed on Nasdaq, subject to compliance with Nasdaq listing rules, including the Nasdaq shareholder approval requirements related to equity issuances.
We expect to next propose renewal of the Board’s pre-emption opt-out authority at our 2024 AGM. |
14 2023 Proxy Statement | JAZZ PHARMACEUTICALS
2023 NOTICE OF MEETING AND PROXY STATEMENT
Proxy Overview (continued)
Proposal 5 — Adjournment Proposal |
The board of directors recommends a vote “FOR” this proposal.
Vote required for approval: Affirmative vote of a majority of the votes cast on the proposal.
For more information, see Proposal 5 starting on page 102.
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We are asking our shareholders to vote on a proposal to approve any motion to adjourn the annual meeting, or any adjournments thereof, to another time and place to solicit additional proxies if there are insufficient votes at the time of the annual meeting to approve Proposal 4.
Under Irish law, Proposal 4 is a special resolution, which requires no less than 75% of the votes of shareholders cast (in person or by proxy) at a general meeting to be voted “FOR” the proposal in order to be passed. Given the high vote threshold associated with Proposal 4, we are seeking your authority to adjourn the meeting to solicit additional proxies if there are insufficient votes at the time of the annual meeting to approve Proposal 4.
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JAZZ PHARMACEUTICALS | 2023 Proxy Statement 15
2023 NOTICE OF MEETING AND PROXY STATEMENT
PROXY STATEMENT
FOR THE 2023 ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 3, 2023
GENERAL
Purpose of this Proxy Statement and Other General Information
Our board of directors is soliciting proxies for use at our 2023 annual general meeting of shareholders, or the annual meeting. This proxy statement contains important information for you to consider when deciding how to vote on the matters brought before the annual meeting. Please read it carefully. The Notice of Internet Availability of Proxy Materials and our proxy materials, which include this proxy statement, our annual letter to shareholders and our 2022 Annual Report on Form 10-K, are first being mailed to shareholders on or about June , 2023. Our proxy materials are also available online at https://materials.proxyvote.com/G50871. The specific proposals to be considered and acted upon at the annual meeting are summarized in the accompanying Notice of 2023 Annual General Meeting of Shareholders. Each proposal is described in more detail in this proxy statement.
This solicitation is made on behalf of our board of directors and all solicitation expenses, including costs of preparing, assembling and mailing proxy materials and notices, will be borne by us. In addition to these proxy materials, our directors and employees may also solicit proxies in person, by telephone, or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners. In addition, we have retained Alliance Advisors, a proxy solicitation firm, to assist in the solicitation of proxies for a fee of approximately $28,000 plus reimbursement of expenses.
Our board of directors has set the close of business on June 7, 2023 as the record date for the annual meeting. Shareholders of record who owned our ordinary shares on that date are entitled to vote at and attend the annual meeting. Each ordinary share is entitled to one vote. There were of our ordinary shares outstanding and entitled to vote on the record date.
16 2023 Proxy Statement | JAZZ PHARMACEUTICALS
2023 NOTICE OF MEETING AND PROXY STATEMENT
PROPOSAL 1
ELECTION OF DIRECTORS
Our board of directors is divided into three classes, designated Class I, Class II and Class III. The term of the Class III directors will expire on the date of this annual meeting; the term of the Class I directors will expire on the date of the 2024 annual meeting of shareholders; and the term of the Class II directors will expire on the date of the 2025 annual meeting of shareholders. At each annual meeting of shareholders, successors to the directors whose term expires at that annual meeting are put forward for election for a three-year term.
The board of directors currently has 12 members and there are no vacancies. There are currently four directors in Class III, the class whose term of office expires at the annual meeting, all of whom are standing for election at the annual meeting: Bruce C. Cozadd, Heather Ann McSharry, Anne O’Riordan and Rick E Winningham. All four Class III director nominees were nominated for election by the board of directors upon the recommendation of our nominating and corporate governance committee. Each of Mr. Cozadd, Ms. McSharry, Ms. O’Riordan and Mr. Winningham were previously elected to our board of directors by our shareholders.
In order to be elected as a director at the annual meeting to hold office until the 2026 annual meeting of shareholders, each nominee must be appointed by an ordinary resolution, meaning each must individually receive the affirmative vote of a majority of the votes cast by the holders of ordinary shares represented in person or by proxy at the annual meeting (including any adjournment thereof). Under our articles, if, at any annual meeting of shareholders, the number of directors is reduced below the minimum prescribed by the board of directors pursuant to our articles due to the failure of any director nominee to receive the affirmative vote of a majority of the votes cast, then in those circumstances, the nominee or nominees who receive the highest number of votes in favor of election will be elected in order to maintain such prescribed minimum number of directors. Each such director would remain a director (subject to the provisions of the 2014 Act and our articles) only until the conclusion of the next annual meeting of shareholders unless he or she is re-elected at such time.
If any nominee becomes unavailable for election as a result of an unexpected occurrence, the proxy holders will vote your proxy for the election of any substitute nominee as may be proposed by the nominating and corporate governance committee. Each nominee has consented to being named as a nominee in this proxy statement and has agreed to serve if elected, and we have no reason to believe that any nominee will be unable to serve. If elected at the annual meeting by the affirmative vote of a majority of the votes cast on his election, each nominee would serve as a director until the 2026 annual meeting of shareholders and until his successor has been elected and qualified, or, if sooner, until his death, resignation, retirement, disqualification or removal. It is our policy to invite directors and nominees for director to attend annual meetings of shareholders. All twelve of our directors attended our 2022 annual meeting of shareholders.
Vacancies on the board of directors, including a vacancy that results from an increase in the authorized number of directors, may be filled only by the affirmative vote of a majority of the directors then in office, provided that a quorum is present at the relevant board meeting. A director elected by the board of directors to fill a vacancy in a class will serve for the remainder of the full term of that class and until the director’s successor is elected and qualified, or, if sooner, until his or her death, resignation, retirement, disqualification or removal. Under our articles, if the number of directors is increased, directors are apportioned among the classes to maintain the number of directors in each class as nearly equal as possible, or as the Chairperson of our board may otherwise direct.
We believe our director nominees bring a variety of expertise, qualifications and skills. The table below summarizes some of the expertise, qualifications and skills of each individual director nominee. Further information on each director nominee, including some of their specific experience, qualifications or skills, is set forth in their biographies below.
JAZZ PHARMACEUTICALS | 2023 Proxy Statement 17
2023 NOTICE OF MEETING AND PROXY STATEMENT
Proposal 1 (continued)
Jazz Pharmaceuticals Board Skills and Experience Matrix
Director |
Public
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C-Suite /
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Industry
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Financial
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Merger and
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Commercial
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Scientific
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International
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Public
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Human
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||||||||||||||||||||||||||||||
Jennifer E. Cook |
🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | ||||||||||||||||||||||||||||||||
Bruce C. Cozadd |
🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | |||||||||||||||||||||||||||||||
Patrick G. Enright |
🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | ||||||||||||||||||||||||||||||
Peter Gray |
🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | ||||||||||||||||||||||||||||||||
Heather Ann McSharry |
🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | |||||||||||||||||||||||||||||||
Seamus Mulligan |
🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | |||||||||||||||||||||||||||||||||
Kenneth W. O’Keefe |
🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | ||||||||||||||||||||||||||||||||||
Anne O’Riordan |
🌑 | 🌑 | 🌑 | 🌑 | 🌑 | |||||||||||||||||||||||||||||||||||
Norbert G. Riedel, Ph.D. |
🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | ||||||||||||||||||||||||||||||
Mark D. Smith, M.D. |
🌑 | 🌑 | 🌑 | 🌑 | 🌑 | |||||||||||||||||||||||||||||||||||
Catherine A. Sohn, Pharm. D. |
🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | ||||||||||||||||||||||||||||||
Rick E Winningham |
🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 | 🌑 |
🌑 Indicates experience/expertise in subject matter.
Capabilities Description
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Public Company Board Experience |
Experience as a board member of a publicly-traded company | ||
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C-Suite/Management Experience |
Experience as a C-suite officer or as a member of senior management of a large or growing business | ||
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Industry Expertise |
Knowledge of the healthcare and biopharmaceutical industry, including, as applicable, science, manufacturing, regulatory compliance and payer dynamics | ||
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Financial Experience |
Experience in positions requiring financial knowledge and analysis with expertise in the evaluation a large or growing company’s capital structure | ||
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Merger & Acquisition/ Corporate Development |
Experience or expertise in structuring financing and executing strategic acquisitions, partnerships, and other corporate development activities | ||
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Commercial Experience |
Experience or expertise in cultivating a large or growing business’s brand equity, the development and management of business relationships with customers and the process of reimbursement of pharma products | ||
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Scientific Research and Drug Development Experience |
Relevant backgrounds in academia, clinical practice, science and technology and, in particular, the research and development of pharmaceutical products | ||
![]() |
International Perspective |
Experience or expertise in the operation of complex multinational organizations | ||
![]() |
Public Policy and Regulation |
Experience operating in a highly regulated industry, navigating governmental or public policy matters in related to medicines and healthcare products | ||
![]() |
Human Capital |
Experience leading larger, diverse teams and human capital management initiatives generally, including leadership development, succession planning, executive recruitment, oversight of corporate culture, diversity and inclusion, and compensation |
18 2023 Proxy Statement | JAZZ PHARMACEUTICALS
2023 NOTICE OF MEETING AND PROXY STATEMENT
Proposal 1 (continued)
The following includes a brief biography of each nominee for director and each of our other directors whose terms of office will continue following the annual meeting, including their respective ages, as of June 1, 2023. Each biography includes information regarding the specific experience, qualifications, attributes or skills that led the nominating and corporate governance committee and the board of directors to determine that the applicable nominee or other current director should serve as a member of the board of directors. We evaluate diversity considerations as well as the experience and expertise of our board as a whole to ensure alignment between the abilities and contributions of our board and our strategic priorities and long-range plan, emphasizing, among other things, expertise in global and U.S. sales and marketing, in product development, in financial management and in corporate development transactions.
Director Nominees
Bruce C. Cozadd | Age: 59 | |||||
DIRECTOR SINCE: 2003*
BOARD COMMITTEES: None
KEY SKILLS: Public Company Board Experience C-Suite/Management Experience Industry Expertise Financial Experience Merger and Acquisition/Corporate Development Commercial Experience International Perspective Public Policy and Regulation Human Capital
OTHER CURRENT PUBLIC BOARDS: ACELYRIN, INC. |
SPECIFIC EXPERTISE:
Mr. Cozadd’s extensive leadership experience having served as co-founder and our Chief Executive Officer for over 10 years and having served previously as Chairperson and Chief Executive Officer of Jazz Pharmaceuticals, Inc, for 3 years, brings to our board of directors a deep and comprehensive knowledge of our business, as well as shareholder-focused insight into effectively executing the company’s strategy and business plans to maximize shareholder value.
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BACKGROUND:
Bruce C. Cozadd has served as our Chairperson and Chief Executive Officer since the closing of the Azur Merger in January 2012, and from October 2019 through March 2020, he served as our interim principal financial officer. Mr. Cozadd co-founded Jazz Pharmaceuticals, Inc. and has served as Chairperson and Chief Executive Officer of Jazz Pharmaceuticals, Inc. since April 2009. From 2003 until 2009, he served as Jazz Pharmaceuticals, Inc.’s Executive Chairperson and as a member of its board of directors. From 1991 until 2001, he held various positions with ALZA Corporation, a pharmaceutical company acquired by Johnson & Johnson, including as Executive Vice President and Chief Operating Officer, with responsibility for research and development, manufacturing and sales and marketing. Previously at ALZA Corporation, he held the roles of Chief Financial Officer and Vice President, Corporate Planning and Analysis. Since February 2022, Mr. Cozadd has served on the board of ACELYRIN, INC., a late-stage clinical biopharma company which became public in May 2023, and has served as Chairperson of ACELYRIN’s board since February 2023. Mr. Cozadd also serves on the board of Biotechnology Innovation Organization, a biotechnology trade association, where he serves on its Health Section Governing Board. He also serves on the boards of two non-profit organizations, The Nueva School and SFJAZZ. He received a B.S. from Yale University and an M.B.A. from the Stanford Graduate School of Business.
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* | Includes service on the board of directors of Jazz Pharmaceuticals, Inc., our predecessor. |
JAZZ PHARMACEUTICALS | 2023 Proxy Statement 19
2023 NOTICE OF MEETING AND PROXY STATEMENT
Proposal 1 (continued)
Heather Ann McSharry | Age: 61 | |||||
DIRECTOR SINCE: 2013 INDEPENDENT
NOMINATING & CORPORATE GOVERNANCE COMMITTEE (Chair)
AUDIT COMMITTEE (Member)
KEY SKILLS: Public Company Board Experience C-Suite/Management Experience Industry Expertise Financial Experience Merger and Acquisition/Corporate Development Commercial Experience International Perspective Public Policy and Regulation Human Capital
OTHER CURRENT PUBLIC BOARDS: International Airlines Group, S.A
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SPECIFIC EXPERTISE:
Ms. McSharry brings to our board of directors over 30 years of experience in multiple international industries, including healthcare, consumer goods and financial services, as well as expertise in crisis management, risk oversight and financial services relevant to our business.
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BACKGROUND:
Heather Ann McSharry has served as a member of our board of directors since May 2013 and was appointed as chair of our nominating and corporate governance committee in August 2017. Ms. McSharry has served as a non-executive director on the board of directors of International Airlines Group, S.A since 2020 and as Senior Independent Director of International Airlines Group, S.A. since June 2022. From 2006 to 2009, Ms. McSharry was Managing Director Ireland of Reckitt Benckiser, a multinational health, home and hygiene consumer products company. From 1989 to 2006, she held various positions at Boots Healthcare, a leading global consumer healthcare company, most recently as Managing Director of Boots Healthcare Ireland Limited. Ms. McSharry served on the boards of directors of the Bank of Ireland from 2007 to 2011, the Industrial Development Agency in Ireland from 2010 to 2014, Uniphar plc from 2019 to 2020, CRH plc from 2012 to 2021 and Greencore Group plc from 2013 to 2021. Ms. McSharry holds a Bachelor of Commerce and a Master of Business Studies degree from University College Dublin.
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Anne O’Riordan | Age: 55 | |||||
DIRECTOR SINCE: 2019 INDEPENDENT
NOMINATING & CORPORATE GOVERNANCE COMMITTEE (Member)
AUDIT COMMITTEE (Member)
KEY SKILLS: C-Suite/Management Experience Industry Expertise Financial Experience International Perspective Human Capital
OTHER CURRENT PUBLIC BOARDS: None |
SPECIFIC EXPERTISE:
Ms. O’Riordan brings to our board of directors 30 years of knowledge and leadership experience advising life sciences and healthcare companies across the globe, with a uniquely diverse perspective attributable to her geographic residency in Asia. Ms. O’Riordan is a leader in digital and innovation strategy. Ms. O’Riordan’s background in advising life sciences companies with respect to significant global markets provides an important contribution to our board of director’s mix of backgrounds, experiences and skills.
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BACKGROUND:
Anne O’Riordan has served as a member of our board of directors since February 2019. Since June 2019, Ms. O’Riordan has served as a Group Director of Digital at Jardine Matheson Limited, a multinational conglomerate, headquartered in Hong Kong, focused on multiple industry segments throughout North and South East Asia. Ms. O’Riordan is a member of the board of directors of Jardine Matheson Limited (JML). From 1990 to March 2019, Ms. O’Riordan worked with Accenture (formerly Andersen Consulting) in their Life Sciences practice, where she held various leadership positions in North America (1992-1998), Europe (1998-2007) and Asia Pacific (2007-2014). From 2014-2019, she served as the Global Industry Senior Managing Director for Life Sciences responsible for the growth and management of the business across all geographies. In addition, Ms. O’Riordan currently serves on the board of governors of the American Chamber of Commerce in Hong Kong where she serves as the board liaison for the Healthcare Committee and is on the board of the International Women’s Forum Hong Kong where she serves as the Treasurer. She is also a long-standing member of the Women’s Foundation and the 30% Club. Ms. O’Riordan received a B.Sc in Biotechnology from Dublin City University as well as a postgraduate diploma in Financial Accounting and MIS from the University of Galway.
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20 2023 Proxy Statement | JAZZ PHARMACEUTICALS
2023 NOTICE OF MEETING AND PROXY STATEMENT
Proposal 1 (continued)
Rick E Winningham | Age: 63 | |||||
DIRECTOR SINCE: 2010* INDEPENDENT
NOMINATING & CORPORATE GOVERNANCE COMMITTEE (Member)
SCIENCE & MEDICINE COMMITTEE (Member)
KEY SKILLS: Public Company Board Experience C-Suite/Management Experience Industry Expertise Financial Experience Merger and Acquisition/Corporate Development Commercial Experience Scientific Research and Drug Development Experience International Perspective Public Policy and Regulation Human Capital
OTHER CURRENT PUBLIC BOARDS: Theravance Biopharma, Inc. |
SPECIFIC EXPERTISE:
Mr. Winningham’s experience in senior management positions in the pharmaceutical industry provides significant industry knowledge and operational and management expertise to our board of directors, along with a deep knowledge of global marketing, commercialization and market access.
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BACKGROUND:
Rick E Winningham has served as a member of our board of directors since the closing of the Azur Merger in January 2012 and was a director of Jazz Pharmaceuticals, Inc. from 2010 until the closing of the Azur Merger. In May 2014, Mr. Winningham was appointed as Lead Independent Director of our board of directors. Mr. Winningham has served as Chairperson of the board of directors of Theravance Biopharma, Inc., a biopharmaceutical company, since July 2013. He has served as Chief Executive Officer of Theravance Biopharma, Inc. since its spin-off from Theravance, Inc. (now Innoviva, Inc.) in June 2014. From October 2001 to August 2014, Mr. Winningham served as Chief Executive Officer of Theravance, Inc., where he also served as Chairperson of the board of directors from April 2010 to October 2014. From 1997 to 2001, he served as President of Bristol-Myers Squibb Oncology/Immunology/Oncology Therapeutics Network and, from 2000 to 2001, as President of Global Marketing. Mr. Winningham is a member of Biotechnology Industry Organization’s board of directors and serves on the Health Section Governing Board Standing Committee on Reimbursement. He previously served as a member of the board of directors of Retrotope, Inc., a private biotechnology company focused on cell degeneration, from February 2021 to January 2022 and OncoMed Pharmaceuticals, Inc. from June 2015 until the company’s merger with Mereo BioPharma Group plc in April 2019. He also served as a member of the board of directors of the California Healthcare Institute, or CHI, from November 2011 to March 2015 and served as its Chairperson from January 2014 until CHI merged with Bay Area Bioscience Association to become the California Life Sciences Association, or CLSA, in March 2015. Mr. Winningham is on the board of directors of CLSA, and served as its Chairperson from March 2015 until November 2015. Mr. Winningham holds an M.B.A. from Texas Christian University and a B.S. from Southern Illinois University.
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The board of directors recommends a vote “FOR” each nominee named above
* | Includes service on the board of directors of Jazz Pharmaceuticals, Inc., our predecessor. |
JAZZ PHARMACEUTICALS | 2023 Proxy Statement 21
2023 NOTICE OF MEETING AND PROXY STATEMENT
Proposal 1 (continued)
Class I Directors Continuing in Office Until the 2024 Annual General Meeting
Peter Gray | Age: 68 | |||||
DIRECTOR SINCE: 2013 INDEPENDENT
AUDIT COMMITTEE (Chair)
KEY SKILLS: Public Company Board Experience C-Suite/Management Experience Industry Expertise Financial Experience Merger and Acquisition/Corporate Development Scientific Research and Drug Development Experience International Perspective Human Capital
OTHER CURRENT PUBLIC BOARDS: None
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SPECIFIC EXPERTISE:
Mr. Gray brings to our board of directors and audit committee over 30 years of experience in financial and operational management within the pharmaceutical industry, with extensive experience in the development of pharmaceutical products and operational execution.
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BACKGROUND:
Peter Gray has served as a member of our board of directors since May 2013 and was appointed as chair of our audit committee in April 2014. He is Chairperson of a privately-held company providing outsourced technology services to the biopharma industry, a director of a privately-held large molecule development company, and chairs a non-profit educational establishment. He served as Chairperson of the board of directors of UDG Healthcare plc, an international provider of healthcare services, from February 2012 to September 2020. In September 2011, Mr. Gray retired from his position as Chief Executive Officer of ICON plc, a global provider of outsourced development services to the pharmaceutical, biotechnology and medical device industries, which he held since November 2002. At ICON plc, Mr. Gray previously served as Group Chief Operating Officer from June 2001 to November 2002 and Chief Financial Officer from June 1997 to June 2001. From November 1983 to November 1989, Mr. Gray served as senior financial officer at Elan Corporation plc, a pharmaceutical company. Mr. Gray holds a degree in law from Trinity College Dublin and qualified as a chartered accountant in 1981.
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Kenneth W. O’Keefe | Age: 56 | |||||
DIRECTOR SINCE: 2004* INDEPENDENT
AUDIT COMMITTEE (Member)
KEY SKILLS: Public Company Board Experience C-Suite/Management Experience Industry Expertise Financial Experience Merger and Acquisition/Corporate Development Public Policy and Regulation
OTHER CURRENT PUBLIC BOARDS: None
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SPECIFIC EXPERTISE:
As Founder and Advisor to BPOC, LLC, Mr. O’Keefe brings to our board of directors significant expertise in accounting and financial matters and in analyzing and evaluating financial statements, as well as substantial experience managing high growth investments. As the former chairperson and current member of our audit committee, Mr. O’Keefe brings to our board of directors detailed knowledge of our financial position and finance strategy.
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BACKGROUND:
Kenneth W. O’Keefe has served as a member of our board of directors since the closing of the Azur Merger in January 2012 and was a director of Jazz Pharmaceuticals, Inc. from 2004 until the closing of the Azur Merger. He served as Managing Director from January 1996 to January 2010 and Chief Executive Officer from January 2010 to January 2018 of BPOC, LLC, a healthcare private equity firm he co-founded. Since January 2018 he has served as Founder of and Advisor to BPOC, LLC. He serves on the boards of several privately-held healthcare companies. He received a B.A. from Northwestern University and an M.B.A. from the University of Chicago.
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* | Includes service on the board of directors of Jazz Pharmaceuticals, Inc., our predecessor. |
22 2023 Proxy Statement | JAZZ PHARMACEUTICALS
2023 NOTICE OF MEETING AND PROXY STATEMENT
Proposal 1 (continued)
Mark D. Smith , M.D. | Age: 71 | |||||
DIRECTOR SINCE: 2020 INDEPENDENT
NOMINATING & CORPORATE GOVERNANCE COMMITTEE (Member)
SCIENCE AND MEDICINE COMMITTEE (Member)
KEY SKILLS: Public Company Board Experience C-Suite/Management Experience Scientific Research and Drug Development Experience Public Policy and Regulation Human Capital
OTHER CURRENT PUBLIC BOARDS: Phreesia, Inc. Teladoc Health, Inc
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SPECIFIC EXPERTISE:
Dr. Smith brings to our board of directors an impressive background that marries the worlds of active medical practice and business development. A practicing physician and professor, Dr. Smith also has experience working for a variety of health focused companies both public and private. Dr. Smith has a deep understanding of the trends in public policy and future trends in healthcare delivery systems in the United States. Additionally, Dr. Smith allocates part of his time for nonprofit organizations and a health policy foundation.
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BACKGROUND:
Mark D. Smith, M.D. has served as a member of our board of directors since December 2020. Dr. Smith is a practicing physician and professor of clinical medicine at the University of California at San Francisco, where he has served since 1994. He also serves as a non-executive director on the boards of directors of two other publicly-held companies, Teladoc Health, Inc., a telemedicine and virtual healthcare company, and Phreesia, Inc., a healthcare software company. Dr. Smith also serves on the board of directors of the Commonwealth Fund, a private health policy foundation. From 1996 to 2013, Dr. Smith was the founding President and Chief Executive Officer of the California HealthCare Foundation, an independent nonprofit philanthropy organization. From 1991 to 1996, he served as Executive Vice President at the Henry J. Kaiser Family Foundation. Dr. Smith received a B.A. from Harvard College, an M.D. from the University of North Carolina at Chapel Hill and an M.B.A. from The Wharton School at the University of Pennsylvania.
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Catherine A. Sohn, Pharm.D. | Age: 70 | |||||
DIRECTOR SINCE: 2012 INDEPENDENT
COMPENSATION COMMITTEE (Member)
SCIENCE & MEDICINE COMMITTEE (Member)
KEY SKILLS: Public Company Board Experience C-Suite/Management Experience Industry Expertise Financial Experience Merger and Acquisition/Corporate Development Commercial Experience Scientific Research and Drug Development Experience International Perspective Public Policy and Regulation Human Capital
OTHER CURRENT PUBLIC BOARDS: Axcella Health Inc. Altimmune, Inc. |
SPECIFIC EXPERTISE:
Dr. Sohn brings to our board of directors three decades of product development, strategy, commercial launch and business development transaction experience in the pharmaceutical industry and a global perspective that is directly relevant to our company.
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BACKGROUND:
Catherine A. Sohn, Pharm.D. has served as a member of our board of directors since July 2012. Dr. Sohn also serves as a non-executive director on the boards of directors of two other public biotechnology companies: Axcella Health Inc and Altimmune, Inc. Dr. Sohn previously served as an independent director on the board of directors of the publicly traded life sciences company: Rubius Therapeutics, Inc. from January 2018 to February 2023, and Lifecore Biomedical (previously known as Landec Corporation) from November 2012 to November 2022. She also serves as Chairperson of the board of BioEclipse Therapeutics, Inc., a privately-held clinical-stage biopharmaceutical company. Dr. Sohn currently holds the position of Adjunct Professor at the University of California, San Francisco. From 1998 to 2010, she was Senior Vice President, Worldwide Business Development and Strategic Alliances at GlaxoSmithKline Consumer Healthcare responsible for leading numerous US, regional and global partnering deals, and acquisitions. From 1994 to 1998, she was Vice President, Worldwide Strategic Product Development at SmithKline Beecham Pharmaceuticals plc in the pharmaceutical division. From 1982 to 1994, she held a series of positions in Medical Affairs, Pharmaceutical Business Development and U.S. Product Marketing, including leading the creation of and commercial launch of the US Vaccine business and subsequently the commercialization of the company’s neuroscience product. Dr. Sohn was named the Distinguished Alum of the Year by the University of California, San Francisco (2000), was recognized as The Woman of the Year by the Healthcare Businesswomen’s Association (2003), received the Frank Barnes Mentoring Award from the Licensing Executive Society (2009) and was recognized as one of the PharmaVoice100 (2016). Dr. Sohn received a Pharm.D. from UCSF, a Corporate Directors Certificate from Harvard Business School, a Certificate of Professional Development from Wharton, a Certificate from Berkeley Law for ESG: Navigating the Board’s Role and is a Certified Licensing Professional Emeritus.
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JAZZ PHARMACEUTICALS | 2023 Proxy Statement 23
2023 NOTICE OF MEETING AND PROXY STATEMENT
Proposal 1 (continued)
Class II Directors Continuing in Office Until the 2025 Annual General Meeting
Jennifer E. Cook | Age: 57 | |||||
DIRECTOR SINCE: 2020 INDEPENDENT
COMPENSATION COMMITTEE (Chair)
SCIENCE & MEDICINE COMMITTEE (Member)
KEY SKILLS: Public Company Board Experience C-Suite/Management Experience Industry Expertise Financial Experience Commercial Experience Scientific Research and Drug Development Experience International Perspective Human Capital
OTHER CURRENT PUBLIC BOARDS: BridgeBio Pharma, Inc. Denali Therapeutics, Inc.
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SPECIFIC EXPERTISE:
Ms. Cook brings to our board of directors over 30 years of biopharmaceutical experience with significant C-suite, global product development and commercialization expertise, with a focus on transformative growth.
| |||||
BACKGROUND:
Jennifer E. Cook has served as a member of our board of directors since December 2020 and was appointed chair of our compensation committee in April 2022. Ms. Cook serves as a non-executive director on the boards of directors of two other publicly-held companies, Denali Therapeutics Inc. and BridgeBio Pharma, Inc., both biotechnology companies. Ms. Cook founded Jennifer Cook Consulting, a consulting company, and has served as Principal since July 2019. From January 2018 to June 2019, Ms. Cook was the Chief Executive Officer at GRAIL, Inc., a privately-held early cancer detection diagnostic company. Prior to that, Ms. Cook worked at Roche Pharmaceuticals/Genentech for 25 years, where she held a number of senior management positions covering the full lifecycle of product development and commercialization. From 2010 to 2013, she oversaw Genentech’s U.S. Immunology and Ophthalmology Business Unit, and from 2013 to 2016, she led Roche’s European commercial business. She also served as Roche’s Global Head of Clinical Operations throughout 2017. In 2016, Ms. Cook was recognized as Woman of the Year by the Healthcare Businesswoman’s Association. Ms. Cook received a B.A. in Human Biology and a M.S. in Biology from Stanford University and an M.B.A. from the Haas School of Business at University of California, Berkeley.
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Patrick G. Enright | Age: 61 | |||||
DIRECTOR SINCE: 2009* INDEPENDENT
AUDIT COMMITTEE (Member)
COMPENSATION COMMITTEE (Member)
KEY SKILLS: Public Company Board Experience C-Suite/Management Experience Industry Expertise Financial Experience Merger and Acquisition/Corporate Development Commercial Experience Scientific Research and Drug Development Experience International Perspective Public Policy and Regulation Human Capital
OTHER CURRENT PUBLIC BOARDS: Vera Therapeutics, Inc.
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SPECIFIC EXPERTISE:
Based on his experience serving on the boards of several clinical-stage biotechnology companies and his investment experience in the life sciences industry, Mr. Enright brings to our board of directors operating experience and financial expertise in the life sciences industry.
| |||||
BACKGROUND:
Patrick G. Enright has served as a member of our board of directors since the closing of the Azur Merger in January 2012 and was a director of Jazz Pharmaceuticals, Inc. from 2009 until the closing of the Azur Merger. Mr. Enright co-founded Longitude Capital, a healthcare venture capital firm, where he has served as a Managing Director since 2006. Mr. Enright currently serves on the board of directors of Vera Therapeutics, Inc. and privately held healthcare companies as well as the National Venture Capital Association. Previously, Mr. Enright was a Managing Director of Pequot Ventures where he co-led the life sciences investment practice. Mr. Enright also has significant life sciences operations experience including holding senior executive positions at Valentis, Boehringer Mannheim (acquired by Roche) and Sandoz (now known as Novartis). Mr. Enright previously served on the boards of directors of over twenty companies, including Aptinyx Inc. from 2016 to 2022, Aimmune Therapeutics, Inc. from 2013 until its acquisition by Nestlé in 2020 and Vaxcyte, Inc. from 2015 to 2020. Mr. Enright received a B.S. in Biological Sciences from Stanford University and an M.B.A. from the Wharton School of the University of Pennsylvania.
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* | Includes service on the board of directors of Jazz Pharmaceuticals, Inc., our predecessor. |
24 2023 Proxy Statement | JAZZ PHARMACEUTICALS
2023 NOTICE OF MEETING AND PROXY STATEMENT
Proposal 1 (continued)
Seamus Mulligan | Age: 62 | |||||
DIRECTOR SINCE: 2012 INDEPENDENT
SCIENCE & MEDICINE COMMITTEE (Member)
KEY SKILLS: Public Company Board Experience C-Suite/Management Experience Industry Expertise Merger and Acquisition/Corporate Development Commercial Experience Scientific Research and Drug Development Experience International Perspective
OTHER CURRENT PUBLIC BOARDS: None |
SPECIFIC EXPERTISE:
As a founder of Adapt Pharma and Azur Pharma, and a pharmaceutical industry executive, Mr. Mulligan brings to our board of directors an expertise in business development and over 35 years of experience in the pharmaceutical industry.
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BACKGROUND:
Seamus Mulligan has served as a member of our board of directors since the closing of the Azur Merger in January 2012. Mr. Mulligan was a founder and principal investor of Azur Pharma and was Azur Pharma’s Chairperson and Chief Executive Officer as well as being a member of its board of directors from 2005 until January 2012. Mr. Mulligan also served as our Chief Business Officer, International Business Development from January 2012 until February 2013. Between 2014 and 2018, Mr. Mulligan served as Chairperson and Chief Executive Officer of Adapt Pharma Limited or Adapt Pharma, a specialty pharmaceutical company, which was acquired in October 2018 by Emergent BioSolutions Inc., a multinational specialty biopharmaceutical company. Mr. Mulligan acted as a Consultant to Emergent BioSolutions Inc. from October 2018 to March 2019, when he was appointed to its board of directors on which he served until his resignation from the board in May 2020. From 2006 to 2017, Mr. Mulligan served as Executive Chairperson of Circ Pharma Limited and its subsidiaries, a pharmaceutical development stage group. From 1984 until 2004, Mr. Mulligan held various positions with Elan Corporation, plc, a pharmaceutical company, most recently as Executive Vice President, Business and Corporate Development, and prior to that position, held the roles of President of Elan Pharmaceutical Technologies, the drug delivery division of Elan Corporation, plc, Executive Vice President, Pharmaceutical Operations, Vice President, U.S. Operations and Vice President, Product Development. Mr. Mulligan served as a member of the board of directors of the U.S. National Pharmaceutical Council until 2004. Mr. Mulligan holds a B.Sc. (Pharm) and M.Sc. from Trinity College Dublin.
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Norbert G. Riedel, Ph.D. | Age: 65 | |||||
DIRECTOR SINCE: 2013 INDEPENDENT
SCIENCE & MEDICINE COMMITTEE (Chair)
COMPENSATION COMMITTEE (Member)
KEY SKILLS: Public Company Board Experience C-Suite/Management Experience Industry Expertise Financial Experience Merger and Acquisition/Corporate Development Commercial Experience Scientific Research and Drug Development Experience International Perspective Public Policy and Regulation Human Capital
OTHER CURRENT PUBLIC BOARDS: Cerevel Therapeutics Holdings, Inc. Eton Pharmaceuticals, Inc. |
SPECIFIC EXPERTISE:
Dr. Riedel brings over 20 years of experience in the biotechnology and pharmaceutical industries to our board of directors with significant scientific, drug discovery and development, and commercial expertise. Dr. Riedel also leverages this pharmaceutical research experience in his position as Chair of the science and medicine committee.
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BACKGROUND:
Norbert G. Riedel, Ph.D. has served as a member of our board of directors since May 2013 and was appointed chair of our science and medicine committee in April 2022. Dr. Riedel currently serves on the boards of directors of two other publicly-held companies, Eton Pharmaceuticals, Inc., a development stage pharmaceutical company, where he serves as Chairperson of the board, and Cerevel Therapeutics Holdings, Inc., a biopharmaceutical company, where he serves as Lead Independent Director. Dr. Riedel also currently serves on the board of directors of a non-profit organization, the Illinois Biotechnology Industry Organization, and is a member of the Austrian Academy of Sciences. Dr. Riedel is an Adjunct Professor at Boston University School of Medicine and an Adjunct Professor of Medicine at Northwestern University’s Feinberg School of Medicine. Dr. Riedel served as Executive Chairperson of Aptinyx Inc. from January 2022 to May 2023, as Chief Executive Officer from September 2015 to December 2021 and as President from September 2015 to December 2020. Aptinyx Inc. is a biopharmaceutical company spun out of its predecessor company, Naurex, Inc., where Dr. Riedel served as Chief Executive Officer and President from January 2014 to September 2015. From 2001 to 2013, he served as Corporate Vice President and Chief Scientific Officer of Baxter International Inc., a diversified healthcare company, where from 1998 to 2001, he also served as President and General Manager of the recombinant therapeutic proteins business unit and Vice President of Research and Development of the bioscience business unit. From 1996 to 1998, Dr. Riedel served as head of worldwide biotechnology and worldwide core research functions at Hoechst-Marion Roussel, now Sanofi, a global pharmaceutical company. Dr. Riedel served on the board of directors of Ariad Pharmaceuticals, Inc., an oncology company, from May 2011 until the company was acquired in February 2017. Dr. Riedel holds a Diploma in biochemistry and a Ph.D. in biochemistry from the University of Frankfurt.
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JAZZ PHARMACEUTICALS | 2023 Proxy Statement 25
2023 NOTICE OF MEETING AND PROXY STATEMENT
CORPORATE GOVERNANCE AND BOARD MATTERS
Overview
We are committed to exercising exemplary corporate governance practices. In furtherance of this commitment, we regularly monitor developments in the area of corporate governance and enhancing our processes, policies and procedures in light of such developments. Key information regarding our corporate governance initiatives can be found on our website, www.jazzpharmaceuticals.com, including our Corporate Governance Guidelines, Code of Conduct, and the charters for all of our committees including the audit, compensation and nominating and corporate governance committees. We believe that our strong corporate governance policies and practices, including the substantial percentage of independent directors on our board of directors and the robust duties of our Lead Independent Director, empower our independent directors to effectively oversee our management team—including the performance of our Chief Executive Officer—and provide an effective and appropriately balanced board governance structure. In addition, we believe that our directors are all actively and constructively engaged in the exercise of their duties and responsibilities, with each independent director serving on at least one board committee and engaging with management between board meetings to remain well-informed of our strategy and our business.
Independence of the Board of Directors
As required under the Nasdaq listing standards, a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively determined by the board of directors. Our board of directors consults with counsel to ensure that the board’s determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in the applicable Nasdaq listing standards, as in effect from time to time. Consistent with these considerations, after review of all relevant transactions or relationships between each director, or any of his or her family members, and our company, our senior management and our independent registered public accounting firm, the board of directors affirmatively determined that all of our current directors are independent directors within the meaning of the applicable Nasdaq listing standards, except that Mr. Cozadd, our Chairperson and Chief Executive Officer, is not independent by virtue of his employment with our company. In addition, our board of directors has determined that each member of the audit committee, compensation committee and nominating and corporate governance committee meets the applicable Nasdaq and SEC rules and regulations regarding “independence” and that each member is free of any relationship that would impair his or her individual exercise of independent judgment with regard to the company.
Board Leadership Structure
Mr. Cozadd has served as our Chairperson and Chief Executive Officer since the closing of the Azur Merger in January 2012. He co-founded Jazz Pharmaceuticals, Inc. in 2003 and served as its Chairperson and Chief Executive Officer since April 2009 and, prior to that, as Executive Chairperson.
The board of directors believes that the Chief Executive Officer is best suited to serve as our Chairperson because he is the member of the board of directors who is most familiar with our business as a whole, and the most capable of identifying and bringing to the attention of the full board of directors the strategic priorities and key issues facing the company. The board of directors also believes that having Mr. Cozadd in particular in a combined Chairperson/Chief Executive Officer role helps provide strong, unified leadership for our management team and optimizes communication with our board of directors. In addition, having previously served for many years as a director of other publicly-traded and privately-held companies, as well as in executive management roles, Mr. Cozadd brings both a strategic and operational perspective to this combined position.
In addition to our Chairperson, our Lead Independent Director plays an important role on the board. Our Corporate Governance Guidelines require the independent directors to elect a Lead Independent Director when the roles of Chairperson and Chief Executive Officer are held by the same person. Rick E Winningham currently serves as our Lead Independent Director.
26 2023 Proxy Statement | JAZZ PHARMACEUTICALS
2023 NOTICE OF MEETING AND PROXY STATEMENT
Corporate Governance and Board Matters (continued)
The Lead Independent Director plays an essential and indispensable role on the board. A critical function of the Lead Independent Director is to help to reinforce the effective independent functioning of the board of directors.
Accordingly, specific roles and responsibilities of the Lead Independent Director, which are detailed in our Corporate Governance Guidelines, include:
• | serving as the principal liaison between the independent directors and the Chairperson; |
• | coordinating the activities of the independent directors, including developing agendas for and presiding at executive sessions of the independent directors; |
• | advising the Chairperson on board and committee agendas, meeting schedules and information provided to other board members, including the quality, quantity and timeliness of such information that is necessary or appropriate for the directors to effectively and responsibly perform their duties; |
• | discussing the results of the Chief Executive Officer’s performance evaluation with the chair of the compensation committee; and |
• | presiding at all meetings of the board of directors at which the Chairperson is not present. |
The Lead Independent Director also has the authority to call meetings of the independent directors of the board of directors and is available for consultation and communication with significant shareholders. The Lead Independent Director also plays a central role in the board’s annual self-evaluation process, including holding one-to-one meetings with each board member and briefing the board on the findings. See “Corporate Governance and Board Matters—Nominating and Corporate Governance Committee”. In addition to fulfilling the basic requirements of his role as Lead Independent Director, Mr. Winningham attends meetings of committees where he is not a member to remain informed and engaged, communicates with the Chief Executive Officer on matters involving the company on a regular basis, regularly seeks input from other independent directors relating to significant developments at the company between regular board meetings, attends certain meetings at the company involving strategic portfolio and/or scientific reviews, and makes himself available for direct communication with significant shareholders as necessary.
Mr. Winningham is an expert in public company board experience with strong industry and business acumen. Mr. Winningham is an effective communicator and acts as a highly versatile intermediary between the Chairperson, the board and Jazz’s stakeholders. Furthermore Mr. Winningham, with his unique insight and objectivity, carefully monitors the Board’s performance and ensures regular independent executive discussion.
In addition, our board of directors is currently comprised of 12 directors, of whom 11 are independent. At meetings of our board of directors, the independent directors regularly convene executive sessions without the presence of our Chairperson and Chief Executive Officer and other members of management.
JAZZ PHARMACEUTICALS | 2023 Proxy Statement 27
2023 NOTICE OF MEETING AND PROXY STATEMENT
Corporate Governance and Board Matters (continued)
Risk Oversight
We believe that our board of directors provides effective oversight of risk management for our company (including financial, operational, business, intellectual property, information technology (including cybersecurity), public policy, reputational risk, governance and compliance), particularly as a result of the work of our committees and the ongoing dialogue between the full board, our Chairperson and Chief Executive Officer and our active and engaged Lead Independent Director.
At its meetings, our full board of directors receives reports concerning the management of the relevant risks from each committee, in addition to reports concerning material risks and concerns or significant updates on such matters from our Chief Legal Officer, Chief Compliance and Ethics Officer and other executive officers, as necessary. | ||||
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Audit
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Our audit committee is responsible for overseeing our financial reporting process on behalf of our board of directors and reviewing with management and our auditors, as appropriate, our major financial risk exposures and the steps taken by management to monitor and control these exposures. Our board of directors has also formalized our audit committee’s role in oversight of risks related to information security, including cybersecurity. In its oversight role, the audit committee receives quarterly updates on information security developments, cybersecurity incidents and the steps taken by management to monitor and mitigate risk exposures in these areas. | |||
Compensation |
Our compensation & management development committee, or compensation committee, approves compensation of executive officers and all material compensation plans for our company and reviews our compensation practices to ensure that they do not encourage excessive risk taking and provide appropriate incentives for meeting both short-term and long-term objectives and increasing shareholder value over time. Our compensation committee also works with our full board of directors to oversee matters related to diversity, talent, and culture strategy including human capital programs and policies regarding management development, talent planning, diversity and inclusion initiatives, and employee engagement, as well as human capital management, which includes reviewing workforce trends, executive succession plans and talent risk and maintaining compensation objectives and corporate policies that appropriately incentivize creating and maintaining a positive workplace and corporate culture. | |||
Nominating |
Our nominating and corporate governance committee oversees the company’s risk management other than those concerning the company’s major financial, business or cybersecurity risk exposures or risks related to our compensation programs and policies, on behalf of our board of directors. Our nominating and corporate governance committee has oversight responsibility over our ESG program and strategy. The nominating and corporate governance committee has oversight responsibility related to administration of and certifies to, compliance with the company’s corporate integrity agreement, or CIA, including compliance with CIA requirements related to training and disclosures of instances of potential non- compliance with certain federal laws, regulations, or company policy and meets at least quarterly. Additionally, our nominating and corporate governance committee maintains oversight over the company’s enterprise risk management program. Because enterprise risk management is holistic risk management, reported risks and their mitigation often include risks more fully governed by other committees, such as cybersecurity. The nominating and corporate governance committee review program methodology and results to ensure management has properly identified and are monitoring enterprise risks. |
28 2023 Proxy Statement | JAZZ PHARMACEUTICALS
2023 NOTICE OF MEETING AND PROXY STATEMENT
Corporate Governance and Board Matters (continued)
Ethical Business Practices
We are committed to conducting our business with integrity and the pursuit of excellence in all that we do. Our management team and our board of directors are committed to honesty and compliance with all laws, rules, regulations and corporate policies that apply to our business, and we expect the same commitment from our employees, consultants, business partners and service providers. In particular, we are committed to acting responsibly, safely and with transparency in our interactions with patients, doctors and other stakeholders in the healthcare system.
Compliance and Ethics Program – I-CARE. I-CARE is our philosophy that acknowledges it takes more than just striving to adhere to the law and company policy to create a healthy and ethical corporate culture. The following elements comprise I-CARE:
• | Integrity: Our corporate value of integrity is the foundation of our approach. |
• | Compliance: The elements of an effective compliance program are managed to deter, detect, and respond appropriately to potential wrongdoing. |
• | Accountability: Every employee plays a role in ensuring our actions live up to the company’s expectations, and every employee is encouraged to speak up if something looks wrong. |
• | Respect: Respect for our patients, company and each other keep us on the right path. |
• | Ethics: Being lawful is the minimum bar we must meet. Our commitment to patients and other stakeholders requires a higher ethical standard. |
I-CARE strives to create a strong, effective compliance and ethics program by educating and advising our employees to empower smart risk decisions, advance our value of integrity, and promote operational efficiencies.
We have established various methods of confidential communication for our employees, vendors and others to report suspected violations of laws, rules, regulations or company policies. Where permitted by local laws, anonymous reporting is available.
Chief Compliance and Ethics Officer. The Chief Compliance and Ethics Officer is responsible for designing and implementing our compliance program, managing the I-CARE team and compliance program elements, and administering the obligations and reporting requirements of the CIA. The Chief Compliance and Ethics Officer reports to the Chief Executive Officer, and makes periodic reports to our board of directors.
Corporate Compliance Committee. The corporate compliance committee is comprised of members of our management team and is responsible for overseeing the implementation and effectiveness of our compliance program to support the Chief Compliance and Ethics Officer. The corporate compliance committee’s responsibilities include:
• | Adopting a system of standards of conduct, policies, procedures, trainings, communications, reporting mechanisms, monitoring, investigations and internal control system reasonably designed to prevent and detect violations of applicable laws, rules and regulations; |
• | Overseeing the enforcement of compliance policies program and procedures by directing that all received reports of potential compliance violations are investigated and resolved, and that appropriate incentives and disciplinary measures are utilized, including discipline of employees responsible for violations; |
• | Taking steps designed to ensure that the individuals responsible for our compliance program have adequate resources, authority and competencies to carry out their responsibilities; |
• | Periodically reviewing the effectiveness of the day-to-day compliance activities engaged in by Jazz and |
• | Taking such other actions, or making such other recommendations, designed to promote a compliant and ethical organizational culture at Jazz. |
Board Oversight of Compliance. The board of directors oversees matters related to compliance requirements and our compliance program generally, including: the adequacy of resources dedicated to the compliance
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function; the identification and handling of instances of non-compliance; and the overall effectiveness of the design and implementation of the compliance program. The nominating and corporate governance committee has responsibility for review and oversight of matters related to compliance with U.S. federal health care program requirements and the obligations of the CIA, including the performance of the Chief Compliance and Ethics Officer and corporate compliance committee. The nominating and corporate governance committee meets at least quarterly with the Chief Compliance and Ethics Officer to review our compliance program and annually adopt a resolution summarizing its review and oversight of Jazz’s compliance with U.S. federal health care program requirements and the obligations of the CIA. In addition, our board of directors meets regularly with the Chief Compliance and Ethics Officer.
Anti-Corruption Policy. Our global Anti-Corruption Policy applies to all of our employees, directors and officers, our subsidiaries and affiliates, and third party vendors and other agents acting on our behalf. We are committed to complying with applicable anti-corruption and anti-bribery laws, including the Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act (UKBA). The Anti-Corruption Policy is available on our website at www.jazzpharmaceuticals.com under the section entitled “Ethical Standards” under “Our Purpose.”
Anti-Slavery and Human Trafficking Commitment. We are committed to operating our global business with integrity and upholding a high level of ethical conduct among our employees and business partners including assessing and addressing the risk of modern slavery and human trafficking within our business operations and supply chain. Jazz has existing procedures designed to assess our suppliers that provide materials for use in our tangible goods for sale, and we have enhanced these procedures to include steps for reasonably evaluating whether these suppliers have policies and procedures in place that are designed to promote compliance with applicable laws related to eradication of human trafficking, slavery and illegal child labor.
Code of Conduct. Our Code of Conduct applies to all of our employees, directors and officers, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, and those of our subsidiaries. The Code of Conduct is available on our website at www.jazzpharmaceuticals.com under the section entitled “Ethical Standards” under “Our Purpose.” We intend to satisfy the disclosure requirements under Item 5.05 of SEC Form 8-K regarding an amendment to, or waiver from, a provision of our Code of Conduct by posting such information on our website at the website address and location specified above.
Political Contributions Guidance. Our Political Contributions Guidance outlines a process intended to ensure all political contributions (including political action committee contributions) are made with transparency, segregated from lobby activities and also intended to ensure that these activities are conducted in accordance with the applicable federal, state, and local campaign and lobbying laws.
Meetings of the Board of Directors
The board of directors met six times during 2022. All directors attended at least 75% of the aggregate number of meetings of the board of directors and of the committees on which they served that were held during 2022. As required under applicable Nasdaq listing standards, in 2022, the independent directors generally met at each regular board meeting in scheduled executive sessions at which only independent directors were present.
Indirectly through the Lead Independent Director and directly through quarterly independent executive sessions our full board informs the development of board agendas and focus of our board meetings.
Director Commitments
Our Corporate Governance Guidelines provide that directors may not serve on more than five public company boards (including Jazz’s board), and if a director is also the chief executive officer of a public company, that director may not serve on more than three public company boards (including Jazz’s board). In addition, our Corporate Governance Guidelines require directors to seek prior approval from our Chairperson, our Lead Independent Director (to the extent one has been appointed) and the chair of our nominating and corporate governance committee before accepting an invitation to serve on any additional boards of directors. We monitor
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our directors’ time commitments throughout the year and we have determined that, as of the date of this proxy statement, all of our directors are currently in compliance with our Corporate Governance Guidelines. We have also amended both the nominating and corporate governance committee charter and the Corporate Governance Guidelines to ensure that when performing our annual review of each of our director’s time commitments and service on other companies’ boards, we also review their service on other companies’ board committees.
Our Board engages regularly with senior management throughout board meetings, one-on-ones, and attendance at key meetings and events including attendance at regional kick off and other business meetings.
Classified Board Structure
Our board of directors is divided into three classes, designated Class I, Class II and Class III. Our nominating and corporate governance committee has discussed the shareholder feedback received on the topic of our classified board structure and continues to believe that this structure is appropriate for our company and beneficial to our shareholders. In particular, the nominating and corporate governance committee believes that the classified board structure:
• | promotes stability and continuity, allowing our board and management to remain focused on our long-term strategy and value generation for our shareholders; |
• | allows for the development of institutional knowledge at the board level, which is particularly important in our industry, given the multi-year life cycles of our product development programs; and |
• | enhances director independence by decreasing pressures from special interest groups that might have short-term agendas contrary to the long-term interests of our shareholders. |
Moreover, a classified board for an Irish company does not present the same entrenchment risk as for a typical U.S.-incorporated company due to the statutory right of shareholders to remove directors and the ability of shareholders to replace any board vacancies created by such removal under Irish law.
Information About Board Committees
The standing committees of the board of directors include an audit committee, a compensation committee, a nominating and corporate governance committee, and a science and medicine committee. Each of these committees is comprised solely of independent directors, has a chair and has a written charter approved by the board of directors reflecting applicable standards and requirements adopted by the SEC and Nasdaq. A copy of the standing committees’ charters can be found on our website, www.jazzpharmaceuticals.com, in the section titled “About” under the subsection titled “Board of Directors.”
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Committee Membership
Our board of directors has four standing committees: the audit committee, the compensation & management development committee (referred to herein as the compensation committee), nominating and corporate governance committee, and science and medicine committee. The following table provides membership information for 2022 for each standing committee.
Name |
Audit | Compensation | Nominating and Corporate Governance |
Science and Medicine1 |
||||||||||||
Jennifer E. Cook2 |
C | ● | ||||||||||||||
Patrick G. Enright |
● | ● | ||||||||||||||
Peter Gray |
C | |||||||||||||||
Heather Ann McSharry |
● | C | ||||||||||||||
Seamus Mulligan |
● | |||||||||||||||
Kenneth W. O’Keefe |
● | |||||||||||||||
Anne O’Riordan3 |
● | ● | ||||||||||||||
Norbert G. Riedel, Ph.D.4 |
● | C | ||||||||||||||
Mark D. Smith, M.D. |
● | ● | ||||||||||||||
Catherine A. Sohn, Pharm.D.5 |
● | ● | ||||||||||||||
Rick E Winningham |
● | ● |
C = committee chair ● = committee member
1 | The science and medicine committee was formed in April 2022. |
2 | Ms. Cook was appointed as chair of our compensation committee in April 2022. |
3 | Ms. O’Riordan was appointed as a member of our nominating and corporate governance committee in April 2022. |
4 | Mr. Riedel ceased serving as chair of our compensation committee in April 2022. |
5 | Dr. Sohn ceased serving on our nominating and corporate governance committee in April 2022. |
Audit Committee
The audit committee of the board of directors oversees our corporate accounting and financial reporting processes, our systems of internal control over financial reporting and audits of our financial statements, the quality and integrity of our financial statements and reports, the qualifications, independence and performance of the auditors engaged as our independent registered public accounting firm for purposes of preparing or issuing an audit report or performing audit services and certain enterprise risk issues. Specific responsibilities of the audit committee include:
• | evaluating the performance of and assessing the qualifications of the independent auditors; |
• | determining and approving the engagement and remuneration of the independent auditors; |
• | determining whether to retain or terminate the existing independent auditors or to appoint and engage new independent auditors; |
• | determining and approving the engagement of the independent auditors to perform any proposed permissible non-audit services; |
• | monitoring the rotation of partners of the independent auditors on our audit engagement team as required by applicable laws and rules; |
• | reviewing and advising on the selection and removal of the head of our internal audit function, the activities and organizational structure of the internal audit function and the results of internal audit activities; |
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• | reviewing and approving the internal audit charter at least annually and the annual internal audit plan and budget; |
• | meeting to review our annual audited financial statements, our quarterly financial statements and our financial press releases with management and the independent auditors, including reviewing our disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our annual and quarterly reports filed with the SEC; |
• | reviewing, overseeing and approving transactions between our company and any related persons; |
• | conferring with management, the internal audit function and the independent auditors regarding the scope, adequacy and effectiveness of our internal control over financial reporting; |
• | reviewing with management, the internal audit function and the independent auditors, as appropriate, major financial risk exposures, including reviewing, evaluating and approving our hedging and other financial risk management policies, as well as the steps taken by management to monitor and control these exposures; |
• | establishing procedures, when and as required under applicable laws and rules, for the receipt, retention and treatment of any complaints received by our company regarding accounting, internal accounting controls or auditing matters and the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters; and |
• | reviewing with management our information security (including cybersecurity) risk exposures and the steps taken by management to monitor and mitigate these exposures. |
The audit committee was during all of 2022 composed of Mr. Gray, Mr. Enright, Ms. McSharry, Mr. O’Keefe and Ms. O’Riordan. Our board of directors has determined that each of Mr. Gray, Mr. Enright, Ms. McSharry, Mr. O’Keefe and Ms. O’Riordan meets the independence requirements of Rule 10A-3 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the Nasdaq listing standards with respect to audit committee members. Our board of directors has also determined that each of Mr. Gray, Mr. Enright, Ms. McSharry and Mr. O’Keefe qualifies as an “audit committee financial expert” within the meaning of SEC regulations. In making this determination, our board of directors considered the overall knowledge, experience and familiarity of each with accounting matters, analyzing and evaluating financial statements, and, in the case of Mr. O’Keefe, managing private equity investments, and, in the case of Mr. Enright, managing venture capital investments. Mr. Gray serves as chair of the audit committee.
The audit committee met five times during 2022. The audit committee also had a number of informal discussions and consultations with one another, with our Chief Financial Officer, our Chief Accounting Officer and our Head of Internal Audit and with Mr. Cozadd during 2022.
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Report of the Audit Committee of the Board of Directors(1)
The audit committee has reviewed and discussed the company’s audited financial statements for the fiscal year ended December 31, 2022 with management of the company. The audit committee has discussed with KPMG, the independent registered public accounting firm that audited the company’s financial statements for the fiscal year ended December 31, 2022, the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board, or PCAOB, and the SEC. The audit committee has also received the written disclosures and the letter from KPMG required by applicable requirements of the PCAOB regarding the independent accountants’ communications with the audit committee concerning independence, and has discussed with KPMG that firm’s independence. Based on the foregoing, the audit committee recommended to the board of directors that the audited financial statements be included in the 2022 Annual Report on Form 10-K filed with the SEC.
Respectfully submitted, |
The Audit Committee of the Board of Directors |
Mr. Peter Gray |
Mr. Patrick Enright |
Ms. Heather Ann McSharry |
Mr. Kenneth W. O’Keefe |
Ms. Anne O’Riordan |
(1) | The material under the heading “Report of the Audit Committee of the Board of Directors” in this proxy statement is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any filing of the company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. |
Compensation Committee
The compensation committee of the board of directors reviews and oversees our compensation policies, plans and programs and reviews and generally determines the compensation to be paid to the executive officers and directors, and prepares and reviews the compensation committee report included in our annual proxy statement. Specific responsibilities and authority of our compensation committee include:
• | reviewing, modifying (as needed) and approving overall compensation strategy and policies; |
• | recommending to our board of directors for determination and approval the compensation and other terms of employment of our Chief Executive Officer and evaluating our Chief Executive Officer’s performance in light of relevant goals and objectives; |
• | reviewing and approving the goals and objectives of our other executive officers and determining and approving the compensation and other terms of employment of these executive officers, as appropriate; |
• | reviewing and recommending to our board of directors the type and amount of compensation to be paid or awarded to the members of our board of directors; |
• | having the full power and authority of our board of directors regarding the adoption, amendment and termination of our compensation plans and programs and administering these plans and programs; |
• | having direct responsibility for appointing, and providing compensation and oversight of the work of, any compensation consultants and other advisors retained by the compensation committee and considering the independence of each such advisor; |
• | reviewing our practices and policies of employee compensation as they relate to risk management and risk-taking incentives, to determine whether such compensation policies and practices are reasonably likely to have a material adverse effect on our company; |
• | periodically reviewing with our Chief Executive Officer the plans for succession to the offices of our executive officers and making recommendations to our board of directors with respect to the selection of appropriate individuals to succeed to these positions; and |
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• | reviewing and discussing with management our disclosures contained under the caption “Compensation Discussion and Analysis” in our annual proxy statement. |
The compensation committee was composed of four directors during 2022: Ms. Cook, Mr. Enright, Dr. Riedel and Dr. Sohn. Dr. Riedel served as the chair of the compensation committee until April 2022 at which time Ms. Cook was appointed chair of the compensation committee. Each member of the compensation committee meets the independence requirements of the Nasdaq listing standards with respect to compensation committee members. In determining whether Mr. Enright, Dr. Riedel, Dr. Sohn and Ms. Cook are independent within the meaning of the Nasdaq listing standards pertaining to compensation committee membership, our board of directors determined, based on its consideration of factors specifically relevant to determining whether any such director has a relationship to us that is material to that director’s ability to be independent from management in connection with the duties of a compensation committee member, that no member of the compensation committee has a relationship that would impair that member’s ability to make independent judgments about compensation of our executive officers.
Compensation Committee Processes and Procedures
Our compensation committee meets as often as it determines necessary to carry out its duties and responsibilities through regularly scheduled meetings and, if necessary, special meetings. The agenda for each compensation committee meeting is usually developed by members of our human resources department and our Chief Executive Officer, with input from members of our legal department, and is reviewed and finalized with the chair of the compensation committee. Members of our human resources department also attend compensation committee meetings. From time to time, various other members of management and other employees as well as outside advisors or consultants may be invited by the compensation committee to make presentations, provide financial or other background information or advice or otherwise participate in the compensation committee meetings. The compensation committee met six times during 2022.
In making executive compensation determinations (other than for our Chief Executive Officer), the compensation committee considers recommendations from our Chief Executive Officer. In making his recommendations, our Chief Executive Officer receives input from our human resources department and from the individuals who manage or report directly to the other executive officers, and he reviews various third party compensation surveys and compensation data provided by the independent compensation consultant to the compensation committee, as described in the section of this proxy statement entitled “Executive Compensation—Compensation Discussion and Analysis.” While our Chief Executive Officer discusses his recommendations for the other executive officers with the compensation committee, he does not participate in the deliberations and recommendations to our board of directors concerning, or our board of directors’ determination of, his own compensation. The charter of the compensation committee grants the compensation committee full access to all books, records, facilities and personnel of the company, as well as authority to obtain, at our expense, advice and assistance from compensation consultants and internal and external legal, accounting or other advisors and consultants and other external resources that the compensation committee considers necessary or appropriate in the performance of its duties. In particular, the compensation committee has the authority, in its sole discretion, to retain or obtain, at the expense of the company, compensation consultants to assist in its evaluation of executive compensation, and is directly responsible for the appointment, compensation and oversight of the work of its compensation consultants. The compensation committee engages an independent compensation consultant each year to provide a competitive compensation assessment with respect to the executive officers to assist the compensation committee in making annual compensation decisions. Since 2010, Aon’s Human Capital Solutions practice, a division of Aon plc, or Aon, has been engaged by the compensation committee each year to provide peer company and industry compensation data and provide the compensation committee with advice regarding executive officers’ compensation, including base salaries, performance-based bonuses and long-term equity compensation, and similar advice regarding non-employee director compensation.
The charter of the compensation committee provides that the compensation committee may delegate any responsibility or authority of the compensation committee under its charter to the chair of the committee or to one or more committee members, including subcommittees, except to the extent inconsistent with any applicable laws
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and rules, including the Nasdaq listing standards. Our compensation committee does not, however, delegate any of its functions to others in determining or recommending executive or director compensation.
For additional information regarding our processes and procedures for the consideration and determination of executive compensation, including the role of Radford in determining and recommending executive compensation, see the section of this proxy statement entitled “Executive Compensation—Compensation Discussion and Analysis.” With respect to director compensation matters, our compensation committee recommends to our board of directors and our board of directors determines and sets non-employee director compensation. Our compensation arrangements for our non-employee directors are described under the section of this proxy statement entitled “Director Compensation.”
Compensation Committee Interlocks and Insider Participation
None of Ms. Cook, Dr. Riedel, Mr. Enright or Dr. Sohn was at any time our officer or employee during 2022. None of our executive officers serve, or in the past fiscal year served, as a member of the board of directors or the compensation committee of any entity that has one or more of its executive officers serving on our board of directors or compensation committee.
Compensation Consultant Fees
Since 2010, Aon has been engaged by the compensation committee each year to provide peer company and industry compensation data and provide the compensation committee with advice regarding executive officers’ compensation, including base salaries, performance-based bonuses and long-term equity incentives, advice regarding directors’ compensation as well as other matters under the compensation committee’s charter. In 2022, the cost of Aon’s consulting services directly related to compensation committee support was approximately $154,000.
Management also engaged with Aon for various insurance-related products and services, covering director and officer liability insurance, health and benefits, pension-related services, other insurance brokerage services and risk services to the business. The aggregate Aon revenue from these additional services in 2022 (not related to Aon’s compensation committee consulting services) was approximately $5,900,000. Although the compensation committee was aware of the nature of the services performed by Aon affiliates and the non-executive employee compensation survey data provided by Aon, the compensation committee did not review and approve such services, surveys and insurance premiums and policies, as those were reviewed and approved by management in the ordinary course of business.
Aon maintains certain policies and practices to protect the independence of the executive compensation consultants engaged by the compensation committee. In particular, Aon provides an annual update to the compensation committee on the financial relationship between Aon and the company, and provides written assurances that, within Aon, the Aon consultants who perform executive compensation services for the compensation committee have compensation determined separately from Aon’s other lines of business and from the other services it provides to the company. These safeguards were designed to help ensure that the compensation committee’s executive compensation consultants continued to fulfill their role in providing independent, objective advice.
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Compensation Committee Report(1)
The compensation committee has reviewed and discussed with management the Compensation Discussion and Analysis contained herein. Based on this review and discussion, the compensation committee has recommended to the board of directors that the Compensation Discussion and Analysis be included in our proxy statement for the 2023 annual general meeting of shareholders and be included in the company’s Annual Report on Form 10-K we filed with the SEC for the fiscal year ended December 31, 2022.
Respectfully submitted, |
The Compensation Committee of the Board of Directors |
Ms. Jennifer E. Cook |
Mr. Patrick G. Enright |
Dr. Norbert G. Riedel, Ph.D. |
Dr. Catherine A. Sohn, Pharm.D. |
(1) | The material under the heading “Compensation Committee Report” in this proxy statement is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any filing of the company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. |
Science and Medicine Committee
The science and medicine committee of our board of directors was formed in April 2022. The science and medicine committee reviews research, development, and technology (“R&D”) initiatives. Specific responsibilities of our science and medicine committee include:
• | review and advise management and our board regarding the strategy, direction, value and progress of the company’s R&D programs, pipeline and technology platforms; |
• | review and advise management and our board on pertinent scientific, technological and medical elements of the company’s corporate development opportunities and transactions; |
• | review and advise management and our board on the company’s R&D resource allocation strategy, including internal and external investments, investment allocation across R&D stages across franchises/therapeutic areas and technology platforms; and |
• | identify and discuss new and emerging trends in pharmaceutical and biotechnological science, technology, and regulation. |
Our science and medicine committee was composed of the following six directors during 2022: Mr. Riedel, Ms. Cook, Mr. Mulligan, Dr. Smith, Dr. Sohn and Mr. Winningham. Mr. Riedel serves as chair of the science and medicine committee.
The science and medicine committee met twice during 2022.
Nominating and Corporate Governance Committee
The nominating and corporate governance committee of our board of directors is responsible for, among other things:
• | overseeing all aspects of our corporate governance functions on behalf of our board of directors; |
• | making recommendations to our board of directors regarding corporate governance issues; |
• | identifying, reviewing and evaluating candidates to serve on our board of directors, and reviewing and evaluating incumbent directors; |
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• | reviewing, evaluating and considering the recommendation for nomination of incumbent members for reelection to our board of directors and monitoring the size of our board; |
• | recommending director candidates to our board of directors; |
• | overseeing on behalf of our board of directors the company’s compliance with applicable laws and regulations, other than the financial compliance issues overseen by the audit committee; |
• | overseeing on behalf of our board of directors the company’s risk management matters, other than with respect to risks that are financial or information security risks (as to which the audit committee has oversight responsibility on behalf of our board of directors) or risks related to compensation policies (as to which the compensation committee has oversight responsibility on behalf of our board of directors); |
• | evaluating director nominations and proposals by our shareholders and establishing policies, requirements, criteria and procedures in furtherance of the foregoing; |
• | assessing the effectiveness and performance of our board of directors and its committees, and recommending and implementing board of directors’ self-evaluation process; |
• | overseeing the company’s ESG strategy and practices and periodically reviewing and discussing with management the company’s practices with respect to ESG matters that are expected to have a significant impact on the company’s performance, business activities, or reputation; and |
• | reviewing, discussing and assessing the performance of our board of directors, including committees of our board of directors, seeking input from all board members, senior management and others. |
The nominating and corporate governance committee believes that candidates for director should have certain minimum qualifications, including the ability to read and understand basic financial statements, being over 21 years of age, and the highest personal integrity and ethics. The nominating and corporate governance committee also intends to consider such factors as possessing relevant expertise upon which to be able to offer advice and guidance to management, having sufficient time to devote to our affairs, demonstrated excellence in his or her field, having the ability to exercise sound business judgment and having the commitment to rigorously represent the long-term interests of our shareholders. However, the nominating and corporate governance committee retains the right to modify these qualifications from time to time. Members of the nominating and corporate governance committee obtain recommendations for potential directors from their and other board members’ contacts in our industry, and we or the nominating and corporate governance committee have in the past and may from time to time again in the future engage a search firm to assist in identifying potential directors.
Candidates for director nominees are reviewed in the context of the then current composition of the board of directors, the operating requirements of the company and the long-term interests of shareholders. In this regard, we examine the experience and expertise of our board as a whole to ensure alignment between the abilities and contributions of our board and our strategic priorities and long-range plan, emphasizing, among other things, expertise in global and U.S. sales and marketing, in product development, in financial management and in corporate development transactions. In addition, while we do not have specific numerical targets with respect to board diversity, our board believes it is important to consider diversity of race, ethnicity, gender, age, geographic residency, cultural background, and professional experiences in evaluating candidates. Accordingly, when undertaking a search for candidates for nomination as new directors, the nominating and corporate governance committee will consider (and will ask any search firm that it engages to provide) a set of candidates that includes both underrepresented people of color and different genders. The nominating and corporate governance committee assesses the effectiveness of its diversity policy through its periodic evaluation of the composition of the full board of directors. Recently, in recruiting and nominating candidates for our board of directors, our nominating and corporate governance committee has focused on increasing diversity overall, including with respect to gender, ethnicity, and geographic residency.
Of the director nominees and the continuing directors, our board of directors has four female directors, four Irish directors, one of whom is a non-resident, one director that identifies as LBGTQ and one person of color. In the case of incumbent directors whose terms of office are set to expire, the nominating and corporate governance committee reviews these directors’ overall service to the company during their terms, including the number of meetings attended, level of participation, quality of performance and any other relationships and transactions that might impair the directors’ independence, the importance of board refreshment, as well as the results of the board
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of directors’ self-evaluation, which is generally conducted annually, to determine whether to recommend them to the board of directors for nomination for a new term. In the case of new director candidates, the nominating and corporate governance committee also determines whether the nominee is “independent” based upon applicable Nasdaq listing standards, applicable SEC rules and regulations and the advice of counsel, if necessary. The nominating and corporate governance committee conducts appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates after considering the function and needs of the board of directors. The nominating and corporate governance committee meets to discuss and consider the candidates’ qualifications and then selects a nominee for recommendation to the board of directors.
The nominating and corporate governance committee will consider director candidates recommended by shareholders on a case-by-case basis, as appropriate. Shareholders wishing to recommend individuals for consideration by the nominating and corporate governance committee may do so by delivering a written recommendation to our Company Secretary at Fifth Floor, Waterloo Exchange, Waterloo Road, Dublin 4, Ireland with the candidate’s name, biographical data and qualifications and a document indicating the candidate’s willingness to serve if elected. The nominating and corporate governance committee does not intend to alter the manner in which it evaluates candidates based on whether the candidate was recommended by a shareholder or not.
To date, the nominating and corporate governance committee has not received any such nominations nor has it rejected a director nominee from a shareholder or shareholders.
Our nominating and corporate governance committee was composed of the following four directors during 2022: Ms. McSharry, Dr. Smith, Mr. Winningham, and Ms. O’Riordan, who was appointed as a member in April 2022, with Dr. Sohn ceasing to serve on the committee in April 2022. Ms. McSharry serves as chair of the nominating and corporate governance committee. Each member of the nominating and corporate governance committee meets (and Dr. Sohn met) the independence requirements of the Nasdaq listing standards.
The nominating and corporate governance committee met four times during 2022.
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Corporate Governance Strengths
We are committed to exercising good corporate governance practices. We believe that good governance promotes the long-term interests of our shareholders and strengthens board and management accountability. The highlights of our corporate governance practices include the following:
• Of our director nominees and continuing directors, 11 out of 12 are independent
• Regular executive sessions of independent directors
• Audit, compensation and nominating and corporate governance committees are comprised solely of independent directors
• Diverse board in terms of tenure, residency, gender, race, ethnicity, sexual orientation, experience and skills
• Annual board self-evaluation
• Risk oversight by the full board and committees
• Board and committees may engage outside advisors independently of management
• Independent compensation consultant reporting directly to the compensation committee
• Limits for directors on other public company board service
• No poison pill in place |
• Our Corporate Governance Guidelines incorporate a “Rooney Rule”-like policy with respect to new director searches
• Annual advisory approval of executive compensation Shareholders may call extraordinary meetings
• Proactive year-round, shareholder engagement program
• Regular meeting attendance and devote sufficient time and attention to board duties
• Director participation in continuing education and related reimbursement policy
• Lead Independent Director with clearly delineated duties
• Corporate Governance Guidelines
• Majority voting for elections of directors for a three-year term
• Share ownership guidelines for directors and executive officers
• Anti-hedging/pledging policy
• Code of Conduct |
Other Corporate Governance Matters
Corporate Governance Guidelines. As a part of our board of directors’ commitment to enhancing shareholder value over the long term, our board of directors has adopted a set of Corporate Governance Guidelines to provide the framework for the governance of our company and to assist our board of directors in the exercise of its responsibilities. Our Corporate Governance Guidelines cover, among other topics, board composition, structure and functioning, director qualifications and board membership criteria, director independence, board and board committee annual self-evaluations, committees of the board, board access to management and outside advisors, board share ownership guidelines, and director orientation and education. Our Corporation Governance Guidelines are available on our website at www.jazzpharmaceuticals.com under the section entitled “About” under “Board of Directors.”
New Director Orientation. Jazz has a robust onboarding program for new directors, wherein all key Jazz materials and policies are shared with them, including comprehensive information and materials on our corporate, operational, financial and business activities/performance. Individual meetings for new directors are set up with members of the Jazz executive team and key leaders across the organization.
Anti-Hedging/Pledging Policy. Our insider trading policy prohibits directors, executive officers and other employees from engaging in speculative trading activities, including hedging transactions or other inherently speculative transactions with respect to our securities. Our insider trading policy also prohibits directors, executive officers and other employees from pledging our securities as collateral for any loans.
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Corporate Governance and Board Matters (continued)
Clawback Policy. We maintain a clawback policy. The clawback policy provides that we may recover amounts of incentive compensation (including cash or equity compensation) under certain circumstances if we are required to restate our financial results due to material noncompliance with any financial requirement and the misconduct of an executive officer covered by the policy contributed to such noncompliance. The SEC has recently published finalized SEC Clawback Rules that required rulemaking by Nasdaq. The compensation committee will review and amend the clawback policy, as appropriate, to reflect the listing standards adopted by Nasdaq in 2023.
Share Ownership Guidelines for Directors and Executive Officers. We maintain and periodically review share ownership guidelines for our non-employee directors, Chief Executive Officer and certain other employees who serve on our executive committee. More information about our share ownership guidelines can be found under the sections of this proxy statement entitled “Executive Compensation—Compensation Discussion and Analysis—Additional Compensation Information—Ownership Guidelines for Executive Officers” and “Director Compensation—Ownership Guidelines for Directors.”
Shareholder Ability to Call Extraordinary Meetings. Irish law provides that shareholders holding 10% or more of the total voting rights may at any time request that the directors call an extraordinary general meeting (i.e., special meeting). The shareholders who wish to request an extraordinary general meeting must deliver to our principal executive office a written notice, signed by the shareholders requesting the meeting and stating the purposes of the meeting. If the directors do not, within 21 days of the date of delivery of the request, proceed to convene a meeting to be held within two months of that date, those shareholders (or any of them representing more than half of the total voting rights of all of them) may themselves convene a meeting within a specified period, but any meeting so convened cannot be held after the expiration of three months from the date of delivery of the request.
Shareholder Communications with the Board of Directors. Our board of directors believes that shareholders should have an opportunity to communicate with the board, and efforts have been made to ensure that the views of shareholders are heard by the board of directors or individual directors, as applicable, and that appropriate responses are provided to shareholders in a timely manner. We believe that our responsiveness to shareholder communications to the board of directors has been excellent. Shareholders interested in communicating with the board of directors or a particular director (including our Chairperson or our Lead Independent Director) may do so by sending written communication to: Jazz Pharmaceuticals plc, Attention: Company Secretary, Fifth Floor, Waterloo Exchange, Waterloo Road, Dublin 4, Ireland. Each communication should set forth the name and address of the shareholder as it appears on our records (and, if the shares are held by a nominee, the name and address of the beneficial owner of the shares), and the number of our ordinary shares that are owned of record by the record holder or beneficially by the beneficial owner, as applicable. The Company Secretary will, in his or her discretion, screen out communications from shareholders that are not related to the duties and responsibilities of the board of directors. The purpose of this screening is to allow the board of directors to avoid having to consider irrelevant or inappropriate communications (such as advertisements, solicitations and hostile communications). If deemed an appropriate communication, the Company Secretary will forward the communication, depending on the subject matter, to the Chairperson, the Lead Independent Director or the chair of the appropriate committee of the board of directors.
JAZZ PHARMACEUTICALS | 2023 Proxy Statement 41
2023 NOTICE OF MEETING AND PROXY STATEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership of our ordinary shares as of May 1, 2023 (except as noted) by: (i) each director; (ii) each of the executive officers named in the Summary Compensation Table under “Executive Compensation” below (referred to throughout this proxy statement as our NEOs); (iii) all of our executive officers and directors as a group; and (iv) all those known by us to be beneficial owners of more than five percent of our ordinary shares.
Beneficial Ownership(2) | ||||||||
Name and Address of Beneficial Owner(1) |
Number of Shares | Percentage of Total |
||||||
5% Shareholders: |
||||||||
BlackRock, Inc.(3) 55 East 52nd Street New York, NY 10055 |
6,652,382 | 10.4 | % | |||||
The Vanguard Group(4) 100 Vanguard Blvd. Malvern, PA 19355 |
6,050,625 | 9.5 | % | |||||
Named Executive Officers and Directors: |
||||||||
Bruce C. Cozadd(5) |
907,976 | 1.4 | % | |||||
Daniel N. Swisher, Jr.(6) |
82,174 | * | ||||||
Renée Galá(7) |
44,908 | * | ||||||
Robert Iannone, M.D., M.S.C.E(8) |
71,545 | * | ||||||
Kim Sablich(9) |
35,700 | * | ||||||
Jennifer E. Cook(10) |
7,443 | * | ||||||
Patrick G. Enright(11) |
31,856 | * | ||||||
Peter Gray(12) |
40,523 | * | ||||||
Heather Ann McSharry(13) |
41,336 | * | ||||||
Seamus Mulligan(14) |
1,195,589 | 1.9 | % | |||||
Kenneth W. O’Keefe(15) |
53,623 | * | ||||||
Anne O‘Riordan(16) |
26,826 | * | ||||||
Norbert G. Riedel, Ph.D.(17) |
38,160 | * | ||||||
Mark D. Smith, M.D.(18) |
7,443 | * | ||||||
Catherine A. Sohn, Pharm.D.(19) |
39,323 | * | ||||||
Rick E Winningham(20) |
34,899 | * | ||||||
All directors and executive officers as a group (20 persons)(21) |
2,797,753 | 4.4 | % |
* | Less than 1%. |
(1) | Unless otherwise provided in the table above or in the notes below, the address for each of the beneficial owners listed is c/o Fifth Floor, Waterloo Exchange, Waterloo Road, Dublin 4, Ireland. |
(2) | This table is based upon information supplied by officers and directors as well as Schedules 13G or 13G/A filed with the SEC by beneficial owners of more than five percent of our ordinary shares. Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, we believe that each of the shareholders named in this table has sole voting and investment power with respect to the ordinary shares indicated as beneficially owned. Applicable percentages are based on 64,002,906 ordinary shares outstanding on May 1, 2023, adjusted as required by rules promulgated by the SEC. The number of shares beneficially owned includes ordinary shares issuable pursuant to the exercise of stock options that are exercisable and RSUs that will vest within 60 days of May 1, 2023. Shares issuable pursuant to the exercise of stock options that are exercisable and RSUs that will vest within 60 days of May 1, 2023 are deemed to be outstanding and beneficially owned by the person to whom such shares are issuable for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person. |
42 2023 Proxy Statement | JAZZ PHARMACEUTICALS
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Security Ownership of Certain Beneficial Owners and Management (continued)
(3) | This information is based on a Schedule 13G/A filed with the SEC on January 26, 2023 by BlackRock, Inc., or BlackRock. According to the Schedule 13G/A, as of December 31, 2022, BlackRock has sole power to vote or direct the vote of 6,169,462 ordinary shares and sole power to dispose or direct the disposition of 6,652,382 ordinary shares. The Schedule 13G/A also indicates that BlackRock is acting as a parent holding company for a number of entities that beneficially owned the ordinary shares being reported. The Schedule 13G/A provides information only as of December 31, 2022 and, consequently, the beneficial ownership of the above-mentioned entity may have changed between December 31, 2022 and May 1, 2023. |
(4) | This information is based on a Schedule 13G/A filed with the SEC on February 9, 2023 by The Vanguard Group, or Vanguard. According to the Schedule 13G/A, as of December 30, 2022, Vanguard has shared power to vote or direct the vote of 51,732 ordinary shares, sole power to dispose or direct the disposition of 5,911,765 ordinary shares, and shared power to dispose or direct the disposition of 138,860 shares. The Schedule 13G/A provides information only as of December 30, 2022 and, consequently, the beneficial ownership of the above-mentioned entity may have changed between December 30, 2022 and May 1, 2023. |
(5) | Includes 628,333 ordinary shares Mr. Cozadd has the right to acquire pursuant to options exercisable within 60 days of May 1, 2023. |
(6) | Includes 62,747 ordinary shares Mr. Swisher has the right to acquire pursuant to options exercisable within 60 days of May 1, 2023. |
(7) | Includes 33,718 ordinary shares Ms. Galá has the right to acquire pursuant to options exercisable within 60 days of May 1, 2023. |
(8) | Includes 53,000 ordinary shares Dr. Iannone has the right to acquire pursuant to options exercisable and 3,050 shares Dr. Iannone is expected to receive pursuant to RSUs scheduled to vest, in each case, within 60 days of May 1, 2023. |
(9) | Includes 31,500 ordinary shares Ms. Sablich has the right to acquire pursuant to options exercisable and 4,200 shares Ms. Sablich is expected to receive pursuant to RSUs scheduled to vest, in each case, within 60 days of May 1, 2023. |
(10) | Includes 5,396 ordinary shares Ms. Cook has the right to acquire pursuant to options exercisable within 60 days of May 1, 2023. |
(11) | Includes 15,305 ordinary shares Mr. Enright has the right to acquire pursuant to options exercisable within 60 days of May 1, 2023. |
(12) | Includes 28,850 ordinary shares Mr. Gray has the right to acquire pursuant to options exercisable within 60 days of May 1, 2023. |
(13) | Includes 28,850 ordinary shares Ms. McSharry has the right to acquire pursuant to options exercisable within 60 days of May 1, 2023. |
(14) | Includes 33,350 ordinary shares Mr. Mulligan has the right to acquire pursuant to options exercisable within 60 days of May 1, 2023. |
(15) | Includes 28,850 ordinary shares Mr. O’Keefe has the right to acquire pursuant to options exercisable within 60 days of May 1, 2023. Includes 4,445 ordinary shares held by The Kenneth W. O’Keefe Trust U/A/D 2/12/1997, of which Mr. O’Keefe is the sole trustee and sole beneficiary. |
(16) | Includes 18,670 ordinary shares Ms. O’Riordan has the right to acquire pursuant to options exercisable within 60 days of May 1, 2023. |
(17) | Includes 28,850 ordinary shares Dr. Riedel has the right to acquire pursuant to options exercisable within 60 days of May 1, 2023. |
(18) | Includes 5,396 ordinary shares Dr. Smith has the right to acquire pursuant to options exercisable within 60 days of May 1, 2023. |
(19) | Includes 28,850 ordinary shares Dr. Sohn has the right to acquire pursuant to options exercisable within 60 days of May 1, 2023. |
(20) | Includes 28,850 ordinary shares Mr. Winningham has the right to acquire pursuant to options exercisable within 60 days of May 1, 2023. |
(21) | Includes 1,176,702 ordinary shares that our executive officers and non-employee directors have the right to acquire pursuant to options exercisable within 60 days of May 1, 2023 and 7,250 ordinary shares that our executive officers and non-employee directors are expected to receive pursuant to RSUs scheduled to vest within 60 days of May 1, 2023. |
JAZZ PHARMACEUTICALS | 2023 Proxy Statement 43
2023 NOTICE OF MEETING AND PROXY STATEMENT
EXECUTIVE OFFICERS
The following table provides information regarding our executive officers as of June 1, 2023.
Name |
Age | Position | ||||
Bruce C. Cozadd |
59 | Chairperson and Chief Executive Officer | ||||
Daniel N. Swisher, Jr. |
60 | President, Chief Operating Officer | ||||
Renée Galá |
51 | Executive Vice President and Chief Financial Officer | ||||
Robert Iannone, M.D., M.S.C.E |
56 | Executive Vice President, Global Head of Research and Development | ||||
Neena M. Patil |
48 | Executive Vice President and Chief Legal Officer | ||||
Kim Sablich |
54 | Executive Vice President and General Manager, US | ||||
Patricia Carr |
52 | Senior Vice President, Chief Accounting Officer | ||||
Finbar Larkin, Ph.D. |
65 | Senior Vice President, Technical Operations | ||||
Samantha Pearce |
57 | Senior Vice President, Europe and International |
Bruce C. Cozadd. Biographical information regarding Mr. Cozadd is set forth above under “Proposal 1 Election of Directors.”
Daniel N. Swisher, Jr. was appointed our President as of January 2018 and also served as our Chief Operating Officer from that date until May 2021 and from November 2022 to present. From December 2003 to December 2017, he was Chief Executive Officer and a member of the board of directors of Sunesis Pharmaceuticals, Inc., a biopharmaceutical company focused on the development of novel targeted cancer therapeutics in hematologic and solid tumor malignancies. He also served as Chief Business Officer and Chief Financial Officer of Sunesis from 2001 to 2003. Prior to 2001, Mr. Swisher served in various management roles, including Senior Vice President of Sales and Marketing, for ALZA Corporation from 1992 to 2001. He currently serves as Chairperson of the board of directors of Cerus Corporation, a biomedical products company focused on the field of blood transfusion safety, and as a member of the board of directors of Corcept Therapeutics Inc., a pharmaceutical company focused on cortisol-modulating therapeutics to address metabolic and other serious medical conditions. Mr. Swisher received a B.A. from Yale University and an M.B.A. from the Stanford Graduate School of Business.
Renée Galá was appointed our Executive Vice President and Chief Financial Officer as of March 2020. From January to June 2019, Ms. Galá served as the Chief Financial Officer of GRAIL, Inc., a private healthcare company focused on the early detection of cancer. Prior to that, from December 2014 to January 2019, she served as Senior Vice President and Chief Financial Officer of Theravance Biopharma, Inc., a biopharmaceutical company, following its spin-out from Innoviva, Inc. Ms. Galá joined Innoviva in 2006 and held various roles in the finance organization before leading the company’s spin-out transaction. Prior to that, Ms. Galá served in various roles in global treasury, pharmaceutical sales and corporate strategy/business development at Eli Lilly and Company, from 2001 to 2006. Before joining Eli Lilly, Ms. Galá spent seven years in the energy industry in positions focused on corporate finance, project finance, and mergers and acquisitions. Ms. Galá serves on the board of directors of Gossamer Bio, Inc., a clinical-stage biopharmaceutical company, where she also chairs the audit committee. Ms. Galá previously served as a member of the board of Gyroscope Therapeutics (acquired by Novartis) and Corcept Therapeutics. Ms. Galá holds a B.S. in Mathematics from Vanderbilt University and an M.B.A. from Columbia Business School.
Robert Iannone, M.D., M.S.C.E. was appointed our Executive Vice President, Global Head of Research and Development as of May 2019. He also served as our Chief Medical Officer from December 2019 until October 2021. From April 2018 until May 2019, Dr. Iannone served as Head of Research and Development and Chief Medical Officer of Immunomedics, Inc., a biopharmaceutical company. Prior to that, from July 2014 to April 2018, Dr. Iannone served in the roles of Senior Vice President and Head of Immuno-oncology, Global Medicines Development and the Global Products Vice President at AstraZeneca plc, a global science-led biopharmaceutical
44 2023 Proxy Statement | JAZZ PHARMACEUTICALS
2023 NOTICE OF MEETING AND PROXY STATEMENT
Executive Officers (continued)
company. From 2004 to 2014, Dr. Iannone served in management roles at Merck Co., Inc., a global biopharmaceutical company, culminating in his role as Executive Director and Section Head of Oncology Clinical Development. From 2001 to 2004, he served as Assistant Professor of Pediatrics and from 2004 to 2012 as Adjunct Assistant Professor of Pediatrics at the University of Pennsylvania School of Medicine. Dr. Iannone has been serving on the board of directors of iTeos Therapeutics, Inc., a clinical-stage biopharmaceutical company, since May 2021, and on the Cancer Steering Committee of the Foundation for the National Institutes of Health since 2011. Dr. Iannone previously served as director of Jounce Therapeutics, Inc., a clinical-stage immunotherapy company, from January 2020 to May 2023. Dr. Iannone received a B.S. from The Catholic University of America, an M.D. from Yale University and an M.S.C.E. from University of Pennsylvania and completed his residency in Pediatrics and fellowship in Pediatric Hematology-Oncology at Johns Hopkins University.
Neena M. Patil was appointed our Executive Vice President and Chief Legal Officer as of August 2022. Ms. Patil joined Jazz Pharmaceuticals as Senior Vice President and General Counsel in July 2019. From September 2018 to July 2019, Ms. Patil served as Senior Vice President, General Counsel and Corporate Secretary of Abeona Therapeutics Inc., a clinical-stage biopharmaceutical company. Prior to that, from May 2008 to October 2016, Ms. Patil served in management positions at Novo Nordisk Inc., culminating in her role as Vice President for Legal Affairs and Associate General Counsel. Prior to 2008, she worked for several other global biopharmaceutical companies including Pfizer, GPC Biotech and Sanofi. Ms. Patil serves on the board of directors of Teleflex, Inc., a global provider of medical technologies. Ms. Patil also serves on the U.S. Board of Mothers 2 Mothers, a global health care organization operating in Africa. Ms. Patil received a B.A. from Georgetown University and a J.D. and Master of Health Services Administration from the University of Michigan.
Kim Sablich was appointed our Executive Vice President and General Manager, North America, in June 2020 and has served as General Manager, US, since November 2022. Ms. Sablich previously served as the Chief Commercial Officer of Myovant Sciences, Inc., a clinical-stage biopharmaceutical company, from December 2018 to May 2020. Prior to that, she served in various executive roles at GlaxoSmithKline plc, a multinational pharmaceutical company, including as Vice President, U.S. Primary Care Marketing from May 2015 to May 2018, as Vice President, Global Medicines Commercialization from July 2013 to May 2015, and as Vice President, U.S. Vaccines Commercial Strategy from October 2010 to June 2013. Prior to 2010, Ms. Sablich served in various positions of increasing responsibility at Merck & Company, a global healthcare company, in its commercial organization across sales, product management, pricing/access, and customer insights, with a focus on the cardiovascular, respiratory, and vaccines business areas. She serves on the board of directors of Eiger BioPharmaceuticals, Inc., a commercial-stage biopharmaceutical company focused on rare diseases. Ms. Sablich previously served on the board of directors of AllerGenis, LLC, a food allergy diagnostic solutions company, from April 2018 to April 2021. Ms. Sablich holds a B.A. in Economics from Denison University and an M.B.A. from The Wharton School of the University of Pennsylvania.
Patricia Carr was appointed our Senior Vice President and Chief Accounting Officer as of August 2021. Ms. Carr joined Jazz Pharmaceuticals as Vice President, Finance in July 2012 and was appointed Principal Accounting Officer in August 2019. Prior to that, from September 2011 to July 2012, she served as Vice President, Finance of Alkermes plc, a global biopharmaceutical company. From June 2002 to September 2011, she served in a number of roles in Elan Corporation, a neuroscience-based biotechnology company, most recently as Vice President, Finance. Ms. Carr is a Fellow of the Institute of Chartered Accountants (Ireland) and received a Bachelor of Commerce from the University of Galway.
Finbar Larkin, Ph.D. was appointed our Senior Vice President, Technical Operations as of October 2019 and served as our Senior Vice President, Pharmaceutical Development & Manufacturing Science from September 2018 until October 2019, our Vice President, Technical Development from February 2014 until August 2018, and our Executive Director, Technical Operations from April 2013 until February 2014. Prior to that, from September 2009 until March 2013, Dr. Larkin served in management roles at Ipsen Pharma SAS, culminating in his role as Vice President, Engineering & Senior Specialist. From February 1997 until August 2009, he served as Vice President and Managing Director at Ipsen Manufacturing Ireland. From 1990 until 1997, he served in various project and operational management roles at Novartis. Prior to 1990, Dr. Larkin served in various roles in manufacturing science and technology, human resources and quality & analytical science at Lilly SA. Dr. Larkin received a B.Sc. and Ph.D. in Chemistry from University College Dublin.
JAZZ PHARMACEUTICALS | 2023 Proxy Statement 45
2023 NOTICE OF MEETING AND PROXY STATEMENT
Executive Officers (continued)
Samantha Pearce was appointed our Senior Vice President, Europe and International as of March 2020. From March 2010 to December 2019, Ms. Pearce held various global senior management positions with Celgene Corporation, most recently as Vice President and General Manager, International Markets. Prior to that, from August 2002 to March 2010, she served in management positions at AstraZeneca plc, culminating in her role as Director, Specialist Care. Prior to August 2002, she worked for DuPont Pharmaceuticals. Ms. Pearce received a B.Sc. from Birmingham University, U.K. and an M.B.A. from Cranfield University, U.K.
46 2023 Proxy Statement | JAZZ PHARMACEUTICALS
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
The following Compensation Discussion and Analysis describes the material elements of compensation for the following individuals who served as our principal executive officer, principal financial officer and three other most highly compensated executive officers as of December 31, 2022. These individuals are our named executive officers, or NEOs, for 2022.
Bruce C. Cozadd
Chairperson and Chief Executive Officer (CEO)
Daniel N. Swisher, Jr.
President, Chief Operating Officer (COO)
Renée Galá
Executive Vice President and Chief Financial Officer (CFO)
Robert Iannone
Executive Vice President, Global Head of Research and
Development
Kim Sablich
Executive Vice President and
General Manager, US
TABLE OF CONTENTS
Compensation Discussion and Analysis |
||||
48 | ||||
48 | ||||
48 | ||||
50 | ||||
50 | ||||
51 | ||||
52 | ||||
Role of Our Compensation & Management Development Committee and Executive Officers |
52 | |||
52 | ||||
Competitive Assessment of Compensation—Peer Companies and Market Data |
53 | |||
55 | ||||
2022 Advisory Vote on Executive Compensation and Shareholder Engagement |
55 | |||
56 | ||||
56 | ||||
57 | ||||
Goals for and Achievement of 2022 Performance-Based Compensation |
58 | |||
58 | ||||
59 | ||||
61 | ||||
2022 Compensation Decisions for Our Named Executive Officers |
63 | |||
63 | ||||
63 | ||||
64 | ||||
68 | ||||
68 | ||||
68 | ||||
69 | ||||
69 | ||||
69 | ||||
Risk Assessment Concerning Compensation Practices and Policies |
70 | |||
70 |
JAZZ PHARMACEUTICALS | 2023 Proxy Statement 47
2023 NOTICE OF MEETING AND PROXY STATEMENT
Executive Compensation (continued)
Executive Summary
Our Business
We are a global biopharmaceutical company whose purpose is to innovate to transform the lives of patients and their families. We are dedicated to developing life-changing medicines for people with serious diseases—often with limited or no therapeutic options. We have a diverse portfolio of marketed medicines and novel product candidates, from early- to late-stage development, in neuroscience and oncology. Within these therapeutic areas, we strive to identify new options for patients by actively exploring small molecules and biologics, and through innovative delivery technologies and cannabinoid science.
Our strategy for growth is rooted in executing commercial launches and ongoing commercialization initiatives; advancing robust research and development, or R&D, programs and delivering impactful clinical results; effectively deploying capital to strengthen the prospects of achieving our short- and long-term goals through strategic corporate development; and delivering strong financial performance. We focus on patient populations with high unmet needs. We identify and develop differentiated therapies for these patients that we expect will be long-lived assets and that we can support with an efficient commercialization model. In addition, we leverage our efficient, scalable operating model and integrated capabilities across our global infrastructure to effectively reach patients around the world.
In January 2022, we announced our Vision 2025, which aims to deliver sustainable growth and enhanced value, driving our continued transformation to an innovative, high-growth global pharmaceutical leader. The three core components of our Vision 2025 focus on commercial execution, pipeline productivity and operational excellence.
In 2022, consistent with our strategy, we continued to focus on R&D activities within our neuroscience and oncology therapeutic areas.
2022 Performance Highlights
2022 was a year of significant execution across our business that exemplified our purpose to innovate to transform the lives of patients and their families. Our total revenue growth was led by the strength of our commercial franchises, including the continued adoption of Xywav® across both narcolepsy and idiopathic hypersomnia (IH), meaningful Epidiolex® growth, robust demand for Rylaze®, driven by critical unmet patient need, and Zepzelca® remaining the treatment of choice in second-line small cell lung cancer, or SCLC. Building on several transformative years for R&D at Jazz, we have enhanced the breadth and depth of our pipeline, as well as our development capabilities.
Financial | • 2022 total revenues of $3,659 million increased 18% over 2021. |
![]() | ||
• 2022 GAAP1 net loss of $(224.1) million, or $(3.58) per diluted share, compared to 2021 GAAP net loss of $(329.7) million, or $(5.52) per diluted share. | ||||
• 2022 non-GAAP adjusted net income2 of $933.6 million, or $13.20 per diluted share, compared to $992.8 million, or $16.23 per diluted share, for 2021. | ||||
1 | U.S. generally accepted accounting principles (GAAP). |
2 | Non-GAAP adjusted net income (and the related per share measure) are non-GAAP financial measures. See “Reconciliations of Non-GAAP Adjusted Net Income” below. |
48 2023 Proxy Statement | JAZZ PHARMACEUTICALS
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Executive Compensation (continued)
Commercial | ||
Neuroscience | ||
• Total oxybate product sales (Xywav and Xyrem) of $1,978.9 million in 2022 increased 10% over 2021. | ||
• Xywav net product sales were $958.4 million in 2022, an increase of 79% over 2021. Exiting 2022, there were more narcolepsy patients taking Xywav than Xyrem. In the fourth quarter of 2022, Xywav became our largest product by net product sales. | ||
• Epidiolex/Epidyolex® net product sales were $736.4 million in 2022, an increase of 12% on a pro-forma, basis over 2021. In the fourth quarter of 2022, we successfully completed the pricing and reimbursement process for Epidyolex in France. Epidyolex is now launched in all five key European markets: United Kingdom, Germany, Italy, Spain and France. | ||
Oncology | ||
• Zepzelca® net product sales were $269.9 million in 2022, an increase of 9% over 2021. Zepzelca continues to be the treatment of choice in second-line SCLC. | ||
• Rylaze net product sales were $281.7 million in 2022, an increase of 229% over 2021. In November 2022, Rylaze received U.S. Food and Drug Administration (FDA) approval for a Monday/Wednesday/Friday (M/W/F) intramuscular (IM) dosing schedule. | ||
Research & Development | ||
Neuroscience | ||
• FDA recognized seven years of Orphan Drug Exclusivity for Xywav in IH in January 2022, extending regulatory exclusivity to August 2028.
• We received Fast Track Designation for JZP150 development in post-traumatic stress disorder (PTSD) from FDA, underscoring the significant unmet medical needs of patients.
• In the fourth quarter of 2022, we enrolled the first patient in a pivotal Phase 3 trial of Epidyolex for Dravet syndrome, Lennox-Gastaut syndrome and tuberous sclerosis in Japan. | ||
• In the fourth quarter of 2022, the first patient was enrolled in our Phase 2 trial of suvecaltamide (JZP385) in patients with Parkinson’s disease tremor.
• In the fourth quarter of 2022, the first participant was enrolled into our Phase 1 development program to evaluate safety, tolerability, pharmacokinetics and pharmacodynamics of JZP441 in sleep-deprived healthy volunteers. | ||
Oncology | ||
• In May 2022, we completed the Marketing Authorization Application (MAA) submission to European Medicines Agency (EMA) for a M/W/F dosing schedule and IM and intravenous (IV) administration for JZP458 (approved as Rylaze in the U.S.) with potential for approval in 2023.
• Phase 3 trial in partnership with F. Hoffmann-La Roche Ltd (Roche) to evaluate 1L use of Zepzelca in combination with Tecentriq® (atezolizumab), compared to Tecentriq alone as maintenance therapy in patients with extensive-stage SCLC after induction chemotherapy, is ongoing. We expect to complete enrollment in the trial by the end of 2023.
• We enrolled the first patient in a Phase 1 trial evaluating JZP815 in patients with advanced or metastatic solid tumors with mitogen-activated protein kinase (MAPK) pathway alterations. | ||
Corporate | • In October 2022, Jazz Pharmaceuticals and Zymeworks Inc. (Zymeworks) announced an exclusive licensing and collaboration agreement3 and in December 2022, we and Zymeworks announced that we had exercised our option to continue with the exclusive development and commercialization rights to zanidatamab in key markets, including the U.S., Europe and Japan. On April 25, 2023, Jazz and Zymeworks entered into a Stock and Asset Purchase Agreement to, among other things, transfer to Jazz certain assets, contracts and employees associated with the development of zanidatamab. |
3 | Exclusive development and commercialization rights to zanidatamab across all indications in the United States, Europe, Japan and all other territories except for those Asia/Pacific territories previously licensed by Zymeworks. |
JAZZ PHARMACEUTICALS | 2023 Proxy Statement 49
2023 NOTICE OF MEETING AND PROXY STATEMENT
Executive Compensation (continued)
Key Features of Our Executive Compensation Program
What We Do |
What We Don’t Do | |
✓ Grant equity awards that vest based on performance goals over a multi-year performance period
|
× No excessive change in control or severance payments
× No “single-trigger” cash or equity change in control benefits
× No repricing of underwater stock options without prior shareholder approval
× No excessive perquisites
× No tax gross ups on severance or change in control benefits
× No post-termination retirement or pension benefits that are not available to employees generally
× No guaranteed bonuses or base salary increases | |
✓ Maintain a clawback policy
| ||
✓ Design executive compensation to align pay with performance
| ||
✓ Balance short-term and long-term incentive compensation, with a majority of executive compensation being “at-risk”
| ||
✓ Structure executive bonus opportunities to be dependent on achievement of rigorous corporate performance goals
| ||
✓ Establish threshold and maximum levels of achievement for payouts under our annual performance bonus plan and our performance-vesting equity awards, including an overall cap on individual payout amounts
| ||
✓ Maintain executive share ownership guidelines
| ||
✓ Provide “double-trigger” change in control benefits
| ||
✓ Prohibit hedging and pledging by executive officers and directors
| ||
✓ Have 100% independent directors on the compensation committee
| ||
✓ Retain independent compensation consultant who reports directly to the compensation committee
| ||
✓ Meet regularly in executive session without management present |
2022 Pay-for-Performance Overview
As illustrated in the charts below, a substantial majority of target total direct compensation (that is base salary, target annual bonus and target annual equity grant) for our CEO and other NEOs is structured in the form of variable or “at-risk” compensation that is dependent upon the performance of our share price and/or the achievement of financial and strategic objectives. This aligns our executives’ interests with those of our shareholders for near- and long-term performance.
50 2023 Proxy Statement | JAZZ PHARMACEUTICALS
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Executive Compensation (continued)
The pie charts below show the various recurring components of target total direct compensation for 2022 for our CEO and other NEOs. These components include the following: (i) annual base salary rate for 2022; (ii) annual target bonus opportunity for 2022; and (iii) the target value of equity awards granted in 2022. Target value of equity awards granted for purposes of the chart below means the target dollar value approved by the compensation committee and board of directors for each NEO’s equity awards granted in 2022. This value differs from the value show in the Summary Compensation Table, as discussed further below under “2022 Compensation Decisions for Our Named Executive Officers—Summary of 2022 Compensation Decisions—Long-Term Incentive Program.”
CEO | Other NEO Average |
Compensation Philosophy and Objectives
Our executive compensation program is designed to support the following philosophy and objectives:
• | Attract, incentivize, reward and retain diverse, talented individuals with relevant experience in the life sciences industry through a competitive pay structure. We reward individuals fairly over time and seek to retain those individuals who continue to meet our high expectations. |
• | Deliver balanced total compensation packages to accomplish our business objectives and mission. Our executive compensation program focuses on target total direct compensation, combining short-term and long-term components, cash and equity, and fixed and variable payments, in the proportions that we believe are the most appropriate to incentivize and reward our executive officers for achieving our corporate goals while minimizing incentives for excessive risk-taking or unethical conduct. |
• | Align pay with our performance. As described above, a substantial portion of our NEOs compensation opportunity is variable or “at-risk” and dependent upon our performance. Our annual performance bonus awards are not earned unless pre-determined levels of performance are achieved against annual corporate objectives approved by our board of directors at the beginning of the year. Likewise, our performance-vesting restricted stock unit awards (“PSUs”) are not earned unless pre-determined levels of performance are achieved and our RSUs will not provide increased value unless there is an increase in the value of our shares, which benefits all shareholders. We also have executive share ownership guidelines to further support our ownership culture and align the interests of executive officers and shareholders. |
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Executive Compensation (continued)
How We Determine Executive Compensation
Role of Our Compensation & Management Development Committee and Executive Officers
We refer to the Compensation & Management Development Committee in this report as the compensation committee. The compensation committee is (and was at all times during 2022) composed entirely of independent directors, as defined by Rule 5605(a)(2) of the Nasdaq listing standards. Our compensation committee meets as often as it determines necessary to carry out its duties and responsibilities through regularly scheduled meetings and, if necessary, special meetings. Our compensation committee also has the authority to take certain actions by written consent of all members. The agenda for each compensation committee meeting is usually developed by members of our human resources department and our CEO, with input from members of our legal department, and is reviewed and finalized with the chairperson of the compensation committee.
The compensation committee reviews and oversees our compensation policies, plans and programs and reviews and generally determines the compensation to be paid to the executive officers, including the NEOs. Our CEO’s compensation is approved by the compensation committee or the independent members of our board of directors, upon recommendation from the compensation committee, after considering advice from its independent compensation consultant. References in this Compensation Discussion and Analysis to our board of directors approving our CEO’s compensation are to the independent members of our board of directors.
In making executive compensation determinations other than for our CEO, the compensation committee considers recommendations from our CEO. In making his recommendations, our CEO receives input from our human resources department and from the individuals who manage or report directly to the other executive officers, and he reviews various sources of market compensation data provided by the independent compensation consultant to the compensation committee, as described below. While our CEO discusses his recommendations for the other executive officers with the compensation committee, he does not participate in the deliberations and recommendations to our board of directors concerning, or our board of directors’ determination of, his own compensation. Members of our human resources department also attend compensation committee meetings.
Below are the highlights of the annual cycle our compensation committee follows in reviewing and making decisions with respect to our executive compensation program.
Role of the Independent Compensation Consultant
The compensation committee engages an independent compensation consultant each year to provide a competitive compensation assessment with respect to the executive officers to assist the compensation committee in making annual compensation decisions. Since 2010, Aon’s Human Capital Solutions practice, a division of Aon plc, or Aon, has been engaged by the compensation committee. Aon supports the compensation committee in addressing the design of the peer group, provides industry compensation data, when requested, provides the compensation committee with advice regarding executive officers’ compensation, including base salaries, performance-based bonuses and long-term equity compensation, and similar advice regarding non-employee directors’ compensation. The compensation committee has also consulted with Aon to update the peer company and industry compensation data on an annual basis, address specific questions that arise as the committee fulfills their responsibilities as outlined in the compensation committee charter. Aon provides support in
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Executive Compensation (continued)
addressing changes in trends and best practices for executive compensation, incentive and equity and/or other best practices that are requested by the compensation committee, in order to help inform the compensation committee’s decisions. Aon reports directly to the compensation committee, which maintains the authority to direct Aon’s work and engagement. As requested, and under the purview of the compensation committee, Aon may advise the human resources department on projects from time to time. Aon interacts with management to gain access to company information that is required to perform services and to understand the culture and policies of the organization. Aon attends compensation committee meetings, and the compensation committee and Aon meet in executive session with no members of management present, as needed, to address various compensation matters, including deliberations regarding our CEO’s compensation.
In assessing Aon’s independence from management in providing executive compensation services to the compensation committee, the compensation committee considered that Aon is only engaged by, takes direction from, and reports to, the compensation committee for such services and, accordingly, only the compensation committee has the right to terminate or replace Aon as its compensation consultant at any time. The compensation committee also analyzed whether the work of Aon as a compensation consultant with respect to executive and director compensation raised any conflict of interest, taking into consideration the following factors:
✔ | the provision of other services to our company by Aon and its affiliates; |
✔ | the amount of fees we paid to Aon and its affiliates as a percentage of Aon’s total revenue; |
✔ | any business or personal relationship of Aon or the individual compensation advisors employed by it with any executive officer of our company; |
✔ | any business or personal relationship of the individual compensation advisors with any compensation committee member; |
✔ | Aon’s policies and procedures that are designed to prevent conflicts of interest; and |
✔ | any ordinary shares of our company owned by Aon or the individual compensation advisors employed by it. |
The compensation committee has determined, based on its analysis of the above factors, that the work of Aon and the individual compensation advisors employed by Aon as compensation consultants to our company has not created any conflict of interest.
Competitive Assessment of Compensation – Peer Companies and Market Data
Because we aim to attract and retain the most highly qualified executive officers in an extremely competitive market, the compensation committee believes that it is important when making its compensation decisions to be informed as to the current practices of comparable public companies with which we compete for top talent. To this end, the compensation committee reviews market data for each executive officer’s position, compiled by Aon as described below, including information relating to the mix and levels of compensation for executive officers in the life sciences industry, with a focus on target total direct compensation in line with the compensation committee’s holistic approach to executive compensation.
2022 Peer Group. The compensation committee uses a peer group and other market data to provide context for its executive compensation decision-making. Each year, Aon reviews the external market data and evaluates the composition of our peer group to ensure it appropriately reflects our growth, the increase in our revenues and market capitalization and the consolidation in our industry. In July 2021, with the assistance of Aon, the compensation committee considered companies:
• | in the life sciences industry (specifically biotechnology and select bio/pharma companies) with commercial products on the market; |
• | with revenues of approximately one-fourth (0.25x) to three times (3x) our then-projected revenue (resulting in a range of $775 million to $9.3 billion in revenues); |
• | with market value of approximately one-fourth (0.25x) to four times (4x) our market capitalization at the time (resulting in a range of between $2.7 billion to $43.5 billion in market capitalization); and |
• | primarily located in the U.S. with a secondary focus on companies that are headquartered in Europe. |
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Executive Compensation (continued)
Based on the above criteria, the compensation committee approved the following changes to the executive compensation peer group for 2022:
• | added Biogen Inc., and |
• | removed Endo International plc, Mallinckrodt plc, and Nektar Therapeutics. |
The peer group used for our 2022 compensation decisions consisted of the 14 companies listed in the table below. At the time the compensation committee approved the peer group, we were at the 70th percentile for trailing 12 months revenue and the 41st percentile for market capitalization among the new peer group. The compensation committee considered this a reasonable balance and a good representation of companies that were of similar scope and complexity.
Alexion Pharmaceuticals, Inc.1 | Exelixis, Inc. | Neurocrine Biosciences, Inc. | United Therapeutics Corporation | |||
Alkermes plc | Horizon Therapeutics plc2 | Regeneron Pharmaceuticals, Inc. | Vertex Pharmaceuticals Incorporated | |||
Biogen Inc. | Incyte Corporation | Sarepta Therapeutics, Inc. |
| |||
BioMarin Pharmaceutical Inc. | Ionis Pharmaceuticals, Inc. | Seagen Inc.3 |
|
1 | Acquired by AstraZeneca plc in July 2021. |
2 | In December 2022, Amgen Inc. announced an agreement to acquire Horizon Therapeutics, plc. |
3 | In March 2023, Seagen announced a definitive merger agreement under which Pfizer Inc. will acquire Seagen. |
2022 Market Data. In early 2022, Aon completed an assessment of executive compensation based on our 2022 peer group to inform the compensation committee’s determinations of executive compensation for 2022. The compensation committee reviews target total direct compensation, consisting of target total cash compensation and equity compensation, against the market data provided by Aon primarily to ensure that our executive compensation program, as a whole, is positioned competitively to attract and retain the highest caliber of executive officers and to ensure that the total direct compensation opportunity for the executive officer group is aligned with our corporate objectives and strategic needs. The compensation committee does not target a specific percentile for setting the level of compensation for the NEOs and does not otherwise use a formulaic approach to setting pay against the market data. The compensation committee believes that over-reliance on benchmarking can result in compensation that is unrelated to the value delivered by our executive officers because compensation benchmarking does not consider company-to-company variations among actual roles with similar titles or the specific performance of the executive officers.
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Executive Compensation (continued)
Factors Used in Determining Executive Compensation
Our compensation committee sets the compensation of our executive officers at levels that the compensation committee determines to be competitive and appropriate for each NEO, using the compensation committee’s professional experience and judgment. The compensation committee’s pay decisions are not driven by a particular target level of compensation based on market data, and the compensation committee does not otherwise use a formulaic approach to setting executive pay. Instead, the compensation committee believes that executive pay decisions require consideration of multiple relevant factors, which may vary from year to year. The figure below reflects the factors the compensation committee considers in determining and approving the amount, form and mix of pay for our NEOs.
2022 Advisory Vote on Executive Compensation and Shareholder Engagement
We hold a say-on-pay advisory vote on executive compensation annually. Accordingly, at our 2022 annual meeting, we provided shareholders with the opportunity to cast a non-binding vote on a proposal regarding the compensation of our named executive officers for the year ended December 31, 2021. Of the votes cast, approximately 94% were voted in favor of the proposal. We were pleased with these results and believe it reflects our continuous efforts to engage with shareholders and solicit their feedback on our executive compensation program.
The compensation committee reviewed the final vote results for the proposal and, given the significant level of shareholder support and positive feedback received on recent program and governance changes, concluded that our executive compensation program continues to provide a competitive pay-for-performance package that effectively incentivizes the NEOs and encourages long-term retention. The compensation committee and, with respect to our CEO’s compensation, our board of directors, determined not to make any significant changes to our 2022 executive compensation policies or decisions as a result of the vote. Our compensation committee and, with respect to our CEO’s compensation, our board of directors will continue to consider the outcome of our say-on-pay proposals and our shareholders’ views when making future compensation decisions for the NEOs.
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Executive Compensation (continued)
Key Components and Design of the Executive Compensation Program
Total Direct Compensation
Our compensation program focuses on target total direct compensation, which consists of base salary, target performance bonus opportunity (which, together with base salary, we refer to as target total cash compensation), and target long-term incentive opportunity.
The table below captioned “Components of Total Direct Compensation” describes key features of each primary component of our executive compensation program and explains why we provide a particular compensation component.
Because we believe it is important to our success to pursue both short- and long-term objectives that drive sustainable shareholder value creation, to avoid excessive risk-taking, and to preserve our cash resources, the majority of the NEOs’ total direct compensation is comprised of variable, “at-risk” compensation, consisting of performance-based bonus opportunities and long-term incentives, in the form of PSUs and RSUs, which align the executive officers’ incentives with the interests of our shareholders. This allocation between variable, “at-risk” and fixed compensation is consistent with our pay-for-performance philosophy.
The compensation committee takes a holistic approach to compensation and seeks to ensure that the aggregate level of pay, across all of the pay elements is meeting the company’s desired objectives for each executive officer. The compensation committee does not have any formal policies for allocating compensation among base salary, target performance bonus opportunity and long-term incentive awards.
Instead, the compensation committee uses its experience and business judgment to establish a total compensation program for each NEO that is a mix of current, short-term and long-term incentive compensation, and cash and non-cash compensation, which it believes is appropriate to achieve the goals of our executive compensation program and our corporate goals.
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Executive Compensation (continued)
Components of Total Direct Compensation
Component |
|
Key Features |
|
|
Purpose | |||||
Base Salary
|
◆Fixed level of cash compensation
◆Noamount is contractually guaranteed
◆Amountsreviewed and determined annually, and are generally effective on or around March 1 each year
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◆Provides fixed level of compensation that is competitive within our industry and reflective of the skills and experience required to be successful in fulfilling the role
| ||||||||
Performance Bonus Award
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◆Cash compensation under the performance bonus plan, which is variable and “at-risk” because it is dependent upon achievement of pre-established financial and strategic objectives
◆Target bonus opportunities reviewed and determined annually
◆Actual bonuses paid shortly after the end of each year, based on the extent corporate goals are attained as determined by the compensation committee, and for executive officers other than our CEO and our President, their individual contributions toward such achievements
◆Actual bonuses capped at 300% of executive officer’s target award (other than for our CEO and President, whose actual bonuses are determined based solely on the achievement of corporate objectives and thus capped at 200% of target)
|
◆Provides financial incentives to achieve key corporate objectives that are aligned with our business strategy
◆Rewards NEOs (other than our CEO and President) for extraordinary individual contributions to our corporate achievements
| ||||||||
Long-Term Incentive Compensation
|
◆PSUs vest, if at all, at the end of a multi-year performance period and represent 50% of the NEO target annual equity grant.
◆RSUsgenerally vest over a 4-year period subject to executive officer’s continued service
◆Awards reviewed and generally granted annually, in the first quarter, or at the time of hire or promotion
|
◆Fosters ownership culture
◆Linkscompensation to long-term success
◆PSUsalign compensation earned to the achievement of multi-year strategic objectives and share price performance versus peer companies.
◆RSUs assist with managing dilution for our shareholders, while reinforcing the importance of shareholder value creation over time
◆Executiveshare ownership guidelines to further support our ownership culture and align the interests of executive officers and shareholders
|
Other Benefits. We also offer our executive officers severance benefits upon certain types of involuntary terminations in connection with a change in control. Executive officers based in the United States are eligible to participate in all our benefit plans, such as the 401(k) Plan (see the section below titled “Description of Compensation Arrangements–401(k) Plan”), our medical, dental, vision, short-term disability, long-term disability, group life insurance plans and other tax qualified reimbursement plans, in each case on the same basis as other employees. Executive officers based in the United States and Ireland are eligible to participate in our 2007 Employee Stock Purchase Plan, or ESPP, on the same basis as other employees. We do not currently offer defined benefit pension or other retirement benefits in the United States; for executive officers based outside the U.S. we offer pension or other retirement benefits that are consistent with local regulations and on the same basis as other employees in such jurisdictions.
Severance Benefits upon Change in Control. Executive officers based in the United States are also eligible to participate in our Amended and Restated Executive Change in Control and Severance Benefit Plan, or the change in control plan, which is described below under the headings “Additional Compensation Information—Change in Control Plan” and “Potential Payments upon Termination or Change in Control—Amended and Restated Executive Change in Control and Severance Benefit Plan.” The change in control plan provides certain severance benefits to participants, in connection with specified involuntary termination events, including termination without cause and constructive termination, following a change in control. Certain executive officers who are not employed by our U.S. affiliates receive comparable change in control benefits pursuant to their employment or service agreements.
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Executive Compensation (continued)
Given the frequency of consolidation in the biopharmaceutical industry, the compensation committee believes these severance benefits are important from a retention perspective to provide some level of protection to our executives who might be terminated following a change in control and that the amounts are reasonable and maintain the competitiveness of our executive compensation and retention program. The compensation committee believes this structure serves to mitigate the distraction and loss of key executive officers that may occur in connection with rumored or actual fundamental corporate changes. Such payments protect the interests of our shareholders by enhancing executive focus during rumored or actual change in control activity, retaining executives despite the uncertainty that generally exists while a transaction is under consideration and encouraging the executives responsible for negotiating potential transactions to do so with independence and objectivity. We do not provide any tax gross up payments on severance benefits.
Goals for and Achievement of 2022 Performance-Based Compensation
For 2022, our annual performance bonus opportunity and the PSUs granted were dependent on annual and long-term performance objectives and methodology established by our compensation committee. The following section describes the performance objectives, discrete goals, payout ranges, and, with respect to the annual bonus program, our actual performance achievement.
2022 Performance Bonus Program
The corporate objectives and relative weightings established by the board of directors for the 2022 performance bonus program that were communicated to the NEOs in early 2022 are described in the chart below. Each of the three corporate objectives consisted of multiple discrete goals. The commercial and pipeline objectives contained additional difficult-to-achieve stretch goals that provided the opportunity to earn up to 12.5% and 15% additional bonus pool funding, respectively. Achievement could range from 0% and 200% for each of the three corporate objectives, including the stretch objectives. However, total payout under the 2022 performance bonus program was capped at 300% of the NEO’s target award (with the exception of our CEO and President, whose actual bonuses are determined based solely on the achievement of the corporate objectives and thus capped at 200% of target).
The compensation committee did not set specific objectives for individual executive officers based on the philosophy that each executive officer is responsible for contributing to the corporate objectives, individually and as part of the leadership team to collectively achieve the company’s goals. In approving individual bonus awards, the compensation committee considered the individual contribution towards the company’s achievement of the corporate objectives by each executive officer (other than our CEO and President). The actual bonus payments approved for each of the NEOs for 2022 are described below under “2022 Compensation Decisions for Our Named Executive Officers.”
No adjustments to the goals or to the assessment of their achievement were made in calculating the 2022 bonus pool. Individual bonus awards are determined in accordance with the following methodology:
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Executive Compensation (continued)
Objectives
Each of three objectives is described in the table and accompanying footnotes below, including the goals within each objective, each goal weighting, actual results and performance multipliers, as well as the total bonus pool funding percentage resulting from the level of achievement of the objectives.
The compensation committee approved, at the start of the performance year, an algorithm with respect to each of the three main objectives (as well as the difficult-to-achieve stretch goals) for calculating the bonus pool funding attributable to the extent of achievement for each such objective. The commercial objective, with a weighting of 50%, consisted of individual goals related to each of Xywav and Epidiolex/Epidyolex net product sales and oncology revenues, as well as stretch goals with an aggregate weighting of 12.5%, as described further in the chart below. The pipeline objective, with a weighting of 30%, consisted of goals associated with top priority programs, and other strategic objectives with a weighting of 15%, as described further in the chart below. The transformation objective, with a weighting of 20%, consisted of achieving a specified budgeted non-GAAP adjusted operating margin and included a discretionary segment, as described further below. The compensation committee set specific threshold and maximum levels of achievement for the commercial objective and the related stretch goals, as well as the transformation objective.
Objectives |
Weighting | Actual Results | Multiplier | Bonus Pool Funding(12) |
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1. |
Commercial: |
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|
|
|
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• Achieve Xywav net product sales in 2022 of $994 million(1) |
20 | % | Between threshold and target: net product sales of $958 million |
82 | % | 16 | % | ||||||||
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• Achieve Epidiolex/Epidyolex net product sales in 2022 of $781 million(1) |
18 | % | Between threshold and target: net product sales of $750 million(7) |
80 | % | 14 | % | ||||||||
|
• Achieve oncology revenues in 2022 of $885 million(1) |
12 | % | Above target: revenues of $888 million(8) |
102 | % | 12 | % | ||||||||
|
• Stretch goal: Xywav achieves equal to or greater than 51% of oxybate narcolepsy market share by year-end 2022(2) |
3 | % | Between threshold and maximum |
80 | % | 2 | % | ||||||||
|
• Stretch goal: Xywav idiopathic hypersomnia (IH) active patients of equal to or greater than 2,100 by year-end 2022(3) |
3 | % | Below threshold |
0 | % | 0 | % | ||||||||
|
• Stretch goal: Achieve Epidiolex new patient starts in 2022 of equal to or greater than 10,819(4) |
3.5 | % | Below threshold |
0 | % | 0 | % | ||||||||
|
• Stretch goal: Achieve Epidyolex new patient starts in 2022 of equal to or greater than 4,725(5) |
2 | % | Below threshold |
0 | % | 0 | % | ||||||||
|
• Stretch goal: Zepzelca Second line (2L) small cell lung cancer (SCLC) market share metric by year-end 2022 of equal to or greater than 48%(6) |
1 | % | Below threshold |
0 | % | 0 | % | ||||||||
2. |
Pipeline: |
|
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|
|
|
|
|
|
|
| |||||
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• Top priority programs(9) |
30 | % | Achieved at 17% level(9) |
56 | % | 17 | % | ||||||||
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• Strategic add-ons(10) |
15 | % | Achieved at 10% level(10) |
67 | % | 10 | % | ||||||||
3. |
Transformation: |
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|
|
|
|
|
|
| |||||
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• Achieve budgeted non-GAAP adjusted operating margin(11) |
20 | % | Achieved at 113% level(11) |
190 | % | 38 | % | ||||||||
|
Total |
|
|
|
|
|
|
|
110 | % |
Note: Amounts may not total due to rounding.
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Executive Compensation (continued)
Following the end of the 2022 fiscal year, after summing the resulting bonus pool funding percentages for the commercial, pipeline and transformation objectives based on their relative weightings of 50%, 30% and 20%, respectively, and considering achievement of stretch goals, the compensation committee approved an overall bonus pool funding percentage of 110% of the target bonus pool for the 2022 plan year.
(1) | If the specified threshold annual performance level was met (80% of target for the three commercial objectives), then a pre-established scaled performance multiplier (ranging from 0% to 175% of target) would be used to calculate the applicable bonus pool funding percentage attributable to such objective. The performance multiplier would be zero if performance was below the 80% threshold level, and if performance exceeded the threshold level, the performance multiplier scaled linearly up to the applicable maximum level. The performance multiplier was capped for performance above the specified maximum performance level (115% of target). |
(2) | With respect to this stretch goal, the performance threshold was set at 51% of oxybate narcolepsy market share by December 31, 2022. If performance was below 51%, no addition to the total bonus pool funding would be made. If performance was between 51% and 53% of narcolepsy market share on Xywav by December 31, 2022, the amount added to the total bonus pool funding percentage would increase from 1.5% to 3%. Actual achievement of 52.2% of total oxybate narcolepsy patients on Xywav by December 31, 2022, was between the threshold and maximum achievement levels. |
(3) | With respect to this stretch goal, the performance threshold was set at 2,100 Xywav active patients for IH by December 31, 2022. If performance was below the threshold no addition to the total bonus pool funding would be made. Performance between 2,100 and 2,200 Xywav active patients for IH by December 31, 2022, would have resulted in 1.5% to 3% (scaled linearly) being added to the total bonus pool funding percentage. This stretch goal was difficult to achieve from the outset given its ambition relative to historical actual active patient generation. Actual Xywav active patients for IH was below the threshold achievement level. |
(4) | With respect to this stretch goal, the performance threshold was set at 10,819 new patient starts on Epidiolex in 2022, below which no addition to the total bonus pool funding would be made. Between 10,819 and 11,334 new patient starts on Epidiolex in 2022, the amount added to the total bonus pool funding percentage would increase between 1.75% to 3.5%. This stretch goal was difficult to achieve from the outset given its ambition relative to historical new patient start trends. Actual achievement of new patient starts on Epidiolex in 2022 was below the threshold achievement level. |
(5) | With respect to this stretch goal, the performance threshold was set at 4,725 new patient starts on Epidyolex in 2022, below which no addition to the total bonus pool funding would be made. Between 4,725 and 4,950 of new patient starts on Epidyolex in 2022, the amount added to the total bonus pool funding percentage would increase between 1% to 2%. This stretch goal was difficult to achieve from the outset given its ambition relative to historical actual new patient start trends and impact of market access activities. Actual achievement of new patient starts on Epidyolex in 2022 was below the threshold achievement level. |
(6) | With respect to this stretch goal, the performance threshold was set at 48% 2L SCLC share by December 31, 2022, at or below which no addition to the total bonus pool funding would be made. Between 48% and 50% 2L SCLC share by December 31, 2022, the amount added to the total bonus pool funding percentage would increase between 0.5% to 1%. This stretch goal was difficult to achieve from the outset given its ambition relative to historical actual share trends, and timing of real world evidence publication. Actual achievement of 2L SCLC share by December 31, 2022, was below the threshold achievement level. |
(7) | To calculate the threshold performance achievement level and performance multiplier, the reported Epidiolex/Epidyolex net product sales of $736 million was increased by approximately $14 million to adjust for changes in foreign currency exchange rates. |
(8) | To calculate the threshold performance achievement level and performance multiplier, the reported oncology revenue (which includes net product sales and contract revenue) of $874 million was increased by approximately $14 million to adjust for changes in foreign currency exchange rate. |
(9) | Consisted of the following top-priority goals, to be achieved by year-end (except as noted): (i) completing Rylaze regulatory actions (FDA approval in IM MWF dosing and submission of MAA to the EMA) by mid-year 2022, (ii) JZP378 (nabiximols) multiple sclerosis related spasticity (MS-S) advancement, including clinical trial enrollment targets and trial readout (by mid-year) and a potential New Drug Application submission to FDA (by the fourth quarter), (iii) achieving JZP150 (Fatty acid amide hydrolase Inhibitor) enrollment targets (greater than or equal to 65%) for Phase 2 PTSD study and (iv) achieving JZP385 (suvecaltamide) patient enrollment targets (greater than 25%) for Phase 2b essential tremor (ET) study. In setting the objective, we incorporated key inflection points in 2022 and interim goals where programs were across multiple years, to incentivize in year performance. The compensation committee determined that we had substantially met both goals with respect to Rylaze, we had partially achieved our nabiximols goals as we had progressed against the goals up until the decision was made to discontinue the program, and we partially achieved the goals for JZP150 and JZP385. In light of these results, the compensation committee determined that the actual achievement of the goals was 56% in aggregate and therefore a 17% bonus pool funding percentage. The capped payout for top-priority goals was 150%. |
(10) | Consisted of the following stretch goals, to be achieved by year-end: (i) corporate development, which included further expanding our portfolio through potential acquisitions, in-licensing, partnering and collaborations; (ii) advancing the cannabinoid platform acquired in our acquisition of GW Pharmaceuticals plc (GW), (iii) drug development progress on a Redx acquired product candidate, and (iv) pipeline advancement to create meaningful value, as evaluated in the compensation committee’s discretion. The compensation committee determined that goals (ii) and (iv) were below the threshold achievement levels and that goals (i) and (iii) were achieved in full. In particular, goal (i) outperformed expectations with the execution licenses for zanidatamab, JZP441 and JZP898. In aggregate, the compensation committee assessed the performance on the stretch goals of 67% and therefore a 10% bonus pool funding percentage. The capped payout for strategic add-on goals was 50%. |
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Executive Compensation (continued)
(11) | The target threshold for non-GAAP adjusted operating margin was established at 43.4% and included the Sunosi divestiture, transformation efficiencies, and other initiatives. The multiplier applied to the non-GAAP adjusted operating margin ranged from 0-200% for adjusted operating margin between 40.5% and 46.5%. The compensation committee had the discretion to adjust the payout level or calculation if it determined appropriate. The actual year end non-GAAP adjusted operating margin achieved, as calculated for purposes of the performance bonus program, was 49.1%,(i) reflecting 113% achievement and a 40% payout threshold with a multiplier of 200%. However, the compensation committee used its discretion to reduce the payout from 40% to 38%, reflecting their view on overall performance on transformation initiatives completed in 2022. |
(12) | The percentages in this column represent, for each objective, the weight of the objective multiplied by the performance multiplier that corresponds to the actual achievement of such objective. |
(i) | Non-GAAP adjusted operating margin is a non-GAAP financial measure that is calculated as (a) total revenues less non-GAAP adjusted cost of product sales, SG&A expenses and R&D expenses divided by (b) total revenues. Non-GAAP adjusted cost of product sales, SG&A expenses and R&D expenses exclude from GAAP cost of product sales, SG&A expenses and R&D expenses, as applicable, share-based compensation expense, restructuring and other charges, transaction and integration related expenses, costs related to disposal of a business and acquisition accounting inventory fair value step-up expense. In addition, solely for purposes of calculating the target threshold and level of achievement, non-GAAP adjusted operating margin also excluded $44 million of operating expenses associated with three corporate development programs licensed in fiscal year 2022: zanidatamab, JZP898 (interferon alpha agonist) and JZP441 (Orexin-2 agonist). |
2022 – 2024 PSU Program. The compensation committee designed the 2022 – 2024 PSU Program, or the 2022 PSUs, to align closely to Vision 2025, our previously announced strategy for long-term, sustainable top- and bottom-line growth and shareholder value creation. As described in more detail below, the performance goals and target performance levels were set by the compensation committee to align with our Vision 2025 by incentivizing and rewarding Jazz leaders for demonstrating strong progress towards the Vision 2025 objectives.
The 2022 PSUs are eligible to vest based on achievement of three objective performance goals over a three-year performance period, which performance payout is then adjusted based on our relative total shareholder return, or TSR, for the three-year performance period. Below is a summary of the performance metrics and associated weightings and targets applicable to the 2022 PSUs, as well as the TSR modifier. We chose the performance goals below given their alignment to Vision 2025.
Performance Goals
|
Target | Weighting | ||||
3-year Revenue Compound Annual Growth Rate (CAGR)(1)
|
11% | 40% | ||||
Enhance Pipeline Value(2)
|
25 points | 30% | ||||
Non-GAAP Adjusted Operating Margin(3) | 47% | 30% | ||||
TOTAL |
|
|
|
100% |
(1) | The 3-year Revenue CAGR is the compound annual growth rate of our Revenue, calculated with a beginning value equal to fiscal 2021 Revenue and an ending value equal to fiscal 2024 Revenue. “Revenue” means our total consolidated revenues calculated in accordance with GAAP. |
(2) | Points are awarded for achievement of the following: successful investigational new drug applications, proof-of-concept studies, pivotal studies and product approvals by a regulatory authority occurring during the performance period. |
(3) | Non-GAAP Adjusted Operating Margin is a non-GAAP financial measure that is calculated as (a) Adjusted Income from Operations for fiscal 2024 divided by (b) total revenues for fiscal 2024. Adjusted Income from Operations means total revenues for fiscal 2024 less non-GAAP adjusted cost of product sales, SG&A expenses and R&D expenses for fiscal 2024. Non-GAAP adjusted cost of product sales, SG&A expenses and R&D expenses exclude from GAAP cost of product sales, SG&A expenses and R&D expenses, as applicable, share-based compensation expense, transaction and integration related expenses, acquisition accounting inventory fair value step-up expense, and other expenses deducted in arriving at non-GAAP adjusted net income. |
The three performance goals described above can independently, and in the aggregate, be achieved at 50% of target at threshold performance levels up to 160% of target for stretch performance, with linear interpolation used between the performance levels.
Once the aggregate achievement percentage of the three performance goals is determined, that result is modified, from 75% to 125%, based on the performance of our share price relative to peers over the same three-year performance period, or what we refer to as a relative TSR modifier. The compensation committee believes that having a TSR modifier helps balance the importance of providing executives clearer line of sight to payout opportunities using financial and operational measures with the need to ensure that those payouts are aligned with shareholders’ experience during the performance period. The achievement percentage, as adjusted to reflect
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Executive Compensation (continued)
the TSR modifier, will determine the number of shares underlying the PSUs that will be earned, vest and be issued to each NEO. Furthermore, the total payout percentage is capped at 100% in the event the TSR percentile rank is ≤ 25th percentile.
Percentile Rank vs. Comparator Group |
Payout Modifier | |
≥ 75th percentile |
125% | |
For every increase in percentile rank between 50th and 75th percentiles |
Increase by 1% | |
50th percentile |
100% | |
For every decrease in percentile rank between 50th and 25th percentiles |
Decrease by 1% | |
≤ 25th percentile |
75% |
The compensation committee selected the constituents of the Russell 1000 pharmaceutical component companies as the comparator group for purposes of the relative TSR modifier for the following reasons:
• | the number of companies is large enough to withstand any potential industry consolidation; |
• | the group includes all 14 of the companies in our executive compensation peer group (see page 54); and |
• | the revenue, market cap and volatility of these companies is more aligned with the company’s profile. |
The companies initially listed on the index are:
AbbVie Inc. | bluebird bio, Inc. | Incyte Corporation | Reata Pharmaceuticals, Inc. | |||
ACADIA Pharmaceuticals Inc. | Bristol-Myers Squibb Company | Ionis Pharmaceuticals, Inc. | Regeneron Pharmaceuticals, Inc. | |||
Acceleron Pharma Inc. | Catalent, Inc. | Iovance Biotherapeutics, Inc. | Sage Therapeutics, Inc. | |||
Agios Pharmaceuticals, Inc. | Elanco Animal Health Incorporated. | Johnson & Johnson | Sarepta Therapeutics, Inc. | |||
Alexion Pharmaceuticals, Inc. | Eli Lilly and Company | Merck & Co., Inc. | Seagen Inc. | |||
Alkermes plc | Exact Sciences Corporation | Moderna, Inc. | United Therapeutics Corporation | |||
Alnylam Pharmaceuticals, Inc. | Exelixis, Inc | Nektar Therapeutics | Vertex Pharmaceuticals Incorporated | |||
Amgen Inc. | Gilead Sciences, Inc | Neurocrine Biosciences, Inc. | Zoetis Inc. | |||
Biogen Inc. | Global Blood Therapeutics, Inc. | Perrigo Company plc |
| |||
BioMarin Pharmaceutical Inc. | Horizon Therapeutics plc | Pfizer Inc. |
|
Companies that are acquired during the performance period will be removed from the final calculation.
The 2022 PSUs are subject to potential vesting acceleration upon the NEO’s termination in connection with a change in control, as well as upon death, disability or retirement, as described below under the heading, “Potential Payments upon Termination or Change in Control—Treatment of 2021 and 2022 PSUs.”
62 2023 Proxy Statement | JAZZ PHARMACEUTICALS
2023 NOTICE OF MEETING AND PROXY STATEMENT
Executive Compensation (continued)
2022 Compensation Decisions for Our Named Executive Officers
General Approach
In making compensation decisions for 2022, the compensation committee considered the factors discussed in “Factors Used in Determining Executive Compensation” above and the compensation committee’s specific compensation objectives for 2022. Our compensation committee did not use a formula or assign a particular weight to any one factor in determining each NEO’s target total direct compensation. Rather, our compensation committee’s determination of the target total direct compensation, mix of cash and equity and fixed and variable, “at-risk” pay opportunities was a subjective, individualized decision for each NEO. The compensation committee reviewed and considered each element of pay in the context of the overall target total direct compensation for each NEO. When the compensation committee made changes to one element of pay, those changes were made in the context of the levels of the other elements of pay, and the resulting target total direct compensation for each NEO. As a result, the 2022 pay decisions for each NEO are presented holistically in this section.
Summary of 2022 Compensation Decisions
Target Total Cash Compensation. The compensation committee (and board of directors, with respect to Mr. Cozadd) increased total target cash compensation by 3.7% for Mr. Cozadd and in varying amounts for our other NEOs (with all increases falling under 10%). Total target cash increases were a result of increases to base salary rates for 2022 in varying amounts based on each NEO’s individual performance, responsibilities, market data reference points and total pay opportunities, which were effective in March 2022. The compensation committee did not increase target performance bonus percentages from 2021 because the compensation committee felt existing percentages (100% for our CEO, 75% for our President and 55% for each of our NEOs) remained aligned with the level of “at-risk” cash appropriate for the company.
Target Equity Compensation and Impact on Target Total Direct Compensation. In determining the appropriate size of 2022 equity award grants, at the time the compensation committee (and the board of directors, with respect to Mr. Cozadd) made its decisions, after careful consideration, it aimed to deliver equity awards to each executive officer to balance the need to maintain equity opportunities competitive with the market, serve the retention and incentive purposes of the awards, facilitate stock ownership and manage overall dilution to our shareholders. With the 2022 target equity compensation grant, the compensation committee (and the board of directors, with respect to Mr. Cozadd) approved total target direct compensation reflecting a 4.8% increase for Mr. Cozadd, with similarly sized increases for other NEOs, except for Mr. Iannone who received a larger increase to ensure his target equity opportunity was positioned competitively with the market.
Long-Term Incentive Program. In 2021, we redesigned our annual long-term incentive program to introduce PSUs, with 50% of each NEO’s aggregate target annual long-term incentive compensation in the form of PSUs that vest based on achievement of performance goals and 50% in the form of time-vesting RSUs. The compensation committee believes this mix strikes the right balance between the variable nature of PSUs and the retentive nature of RSUs and accordingly, continued this same mix of PSUs and RSUs for our NEOs in 2022. The vesting terms and structure of our PSUs granted in 2022 is discussed in “2022 – 2024 PSU Program” above.
The share amounts underlying the PSUs and RSUs granted to each executive officer in 2022 were determined by dividing the target fair value of the award that the compensation committee and, in the case of Mr. Cozadd, the board of directors, intended to deliver, by the company’s 30-day average share price immediately preceding the grant date. We used a 30-day average share price, rather than a single day share price, to provide a more stabilized share value less susceptible to possible swings in the market. The grant date fair value of the RSUs and PSUs, as reported in the Summary Compensation Table and Grants of Plan-Based Awards Table in accordance with SEC rules and FASB Accounting Standards Codification Topic 718, Compensation—Stock Compensation, or FASB ASC 718, is based on the closing price of our ordinary shares on the grant date (with respect to RSUs) and based on a Monte Carlo simulation model (with respect to PSUs). The values for the RSUs and PSUs shown in the Summary Compensation Table and Grants of Plan-Based Awards Table differ from the intended target values and do not fully reflect the considerations of, and decisions made by, the compensation committee and the board of directors in its determination of the equity grants in this respect.
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Executive Compensation (continued)
Individual NEO Compensation Decisions
Below are summaries, for each NEO individually, of the compensation committee’s (or, as applicable, the board of directors’) decisions about 2022 target total direct compensation and the changes from each NEO’s 2021 target total direct compensation. As described above, when making the 2022 compensation decisions, the compensation committee (or the board of directors, as applicable) focused primarily on the target total direct compensation for each NEO while considering the factors set forth in the section titled “Factors Used in Determining Executive Compensation” and the compensation committee’s specific compensation objectives for 2022. The footnotes to the tables also include the actual performance bonus paid to each of the NEOs for 2022 and how that actual bonus compared to each NEO’s target bonus. Additionally, for each NEO, the target equity compensation presented in the charts below reflect the target dollar value approved by the compensation committee (or, with respect to Mr. Cozadd, the board of directors), which is different from the grant date fair value as reported in the Summary Compensation Table and Grants of Plan-Based Awards Table, as further described under “Long-Term Incentive Program” above.
Bruce C. Cozadd, Chairperson and CEO
|
2021 Pay ($) | 2022 Pay ($) | Change (%) | |||||||||
Target Total Cash Compensation |
2,159,354 | 2,240,200 | 3.7 | % | ||||||||
Base Salary(1) |
1,082,100 | 1,120,100 |
|
|
| |||||||
Target Performance Bonus(2) |
1,077,254 | 1,120,100 |
|
|
| |||||||
Target Equity Compensation(3) |
12,000,000 | 12,600,000 |