UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

 

 

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☒	Definitive Proxy Statement

 

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ABIOMED, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)

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22 Cherry Hill Drive

Danvers, Massachusetts 01923

 

Dear Fellow Stockholder:

 

On behalf of the Board of Directors, I cordially invite you to attend the 2022 Annual Meeting of Stockholders of ABIOMED, Inc. (“ABIOMED” or the “Company”), to be held at 8:00 a.m., Eastern Time, on Wednesday, August 10, 2022, at The Newbury Boston, One Newbury Street, Boston, Massachusetts 02116. The notice and proxy statement for the 2022 Annual Meeting are attached to this letter and describe the business to be conducted at the 2022 Annual Meeting. Please see page 78 for a description of the requirements to attend.

In accordance with the rules of the Securities and Exchange Commission, we sent a Notice of Internet Availability of Proxy Materials on or about June 28, 2022 to our stockholders of record as of the close of business on June 13, 2022. We also provided access to our proxy materials over the Internet beginning on that date. If you received a Notice of Internet Availability of Proxy Materials by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials included in the Notice of Internet Availability of Proxy Materials.

Your vote is important. We encourage you to vote promptly and in advance even if you currently plan to attend the 2022 Annual Meeting. To have your vote recorded, you should vote over the Internet or by telephone. In addition, if you have received a paper copy of the proxy materials, you may vote by signing, dating and returning the proxy card sent to you in the envelope accompanying the proxy materials (or voting instruction form, if you hold your shares through a broker, bank or other nominee). If you decide to attend the 2022 Annual Meeting, you can still vote your shares in person if you wish. Please see page 78 for information about attending the 2022 Annual Meeting.

On behalf of the Board of Directors, I thank you for your cooperation and look forward to seeing you on August 10, 2022.

Very truly yours,

 

 

Michael R. Minogue

Chairman, President and Chief Executive Officer

June 28, 2022

NOTICE OF 2022 ANNUAL MEETING OF

STOCKHOLDERS OF ABIOMED, INC.

 

DATE AND TIME:		Wednesday, August 10, 2022, at 8:00 a.m. Eastern Time
PLACE:		The Newbury Boston One Newbury Street Boston, Massachusetts 02116
ITEMS OF BUSINESS:		1)    Elect the three Class III director nominees listed in the accompanying proxy statement (the “Proxy Statement”) to serve for a three-year term until the 2025 Annual Meeting of Stockholders;   2)    Consider a non-binding, advisory vote to approve the compensation of our named executive officers;   3)    Ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending March 31, 2023; and   4)    Consider and act upon any matter which may properly come before the 2022 Annual Meeting and any adjournments or postponements thereof.
WHO CAN VOTE:		You are entitled to vote if you were a stockholder of record at the close of business on Monday, June 13, 2022.
VOTING:		Your vote is important. We encourage you to vote promptly and in advance even if you plan to attend the 2022 Annual Meeting. You may vote by telephone, through the Internet or by mailing your completed and signed proxy card (or voting instruction form, if you hold your shares through a broker, bank or other nominee). If you decide to attend the 2022 Annual Meeting, you can still vote your shares in person if you wish. Each share is entitled to one vote on each matter to be voted upon at the 2022 Annual Meeting.
2022 ANNUAL REPORT:		A copy of our annual report to stockholders for the fiscal year ended March 31, 2022 accompanies this Proxy Statement.

 

June 28, 2022
Danvers, Massachusetts		By Order of the Board of Directors,
		Marc A. Began                           Executive Vice President,                       General Counsel and Secretary

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS

FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON AUGUST 10, 2022

This Notice of Annual Meeting and the accompanying Proxy Statement are being distributed or made available, as the case may be, on or about June 28, 2022, and the Proxy Statement and our annual report to stockholders for the fiscal year ended March 31, 2022 are available on our website at https://investors.abiomed.com/investors/events-and-presentations/default.aspx.

TABLE OF CONTENTS

 

PROPOSALS REQUIRING YOUR VOTE			1
Proposal No. 1 – Election of Directors			1

Proposal No.  2 – Advisory Vote on Compensation of Our Named Executive Officers			11
Proposal No.  3 – Ratification of Appointment of our Independent Registered Public Accounting Firm			12
EXECUTIVE OFFICERS OF OUR COMPANY			13
THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS			17
Corporate Governance Highlights			17
Director Independence			19
Board Leadership			19
Expectations for Members of our Board of Directors			23
Committees of the Board of Directors			24
Board and Committee Evaluations			27
Engagement with Stockholders			28
Board Role in Risk Oversight			28
Environmental, Social and Governance Initiatives			29
Codes of Conduct			30
Stockholder Communications with Directors			30
Compensation of Directors			31
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION			34
COMPENSATION OF EXECUTIVE OFFICERS			35
Compensation Discussion and Analysis			35
Overview			35
Executive Summary			35
Compensation Governance			45
Fiscal 2022 Base Salary			48
Fiscal 2022 Annual Incentive Plan			49
Fiscal 2022 Long-Term Incentive Awards			53
Other Elements of Compensation			55
Managing Compensation-Related Risks			55
Fiscal 2023 Compensation			56
Compensation Committee Report			57
Compensation Tables			58
Summary Compensation Table			58
Grants of Plan-Based Awards			59
Outstanding Equity Awards at Fiscal Year-End			60
Option Exercises and Vesting of Stock			61
Narrative Supplement to Compensation Tables			61
Estimated Potential Payments Following a Change of Control			64
CHIEF EXECUTIVE OFFICER PAY RATIO			66
EQUITY COMPENSATION PLAN INFORMATION			67
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			68
REPORT OF THE AUDIT COMMITTEE			71
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES			72
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS			73
DELINQUENT SECTION 16(A) REPORTS			73
GENERAL AND OTHER INFORMATION			73
Stock Trading Practices			73
Other Proposed Action for 2022			73
Householding of Proxy Materials			74
Annual Report to Stockholders and Annual Report on Form 10-K			74
Stockholder Proposals for 2023			74
QUESTIONS AND ANSWERS ABOUT THE MEETING			76
APPENDIX A: NON-GAAP FINANCIAL INFORMATION			80

Proposal No. 1 – Election of Directors

Our board of directors (the “Board” or the “Board of Directors”) currently consists of nine directors and is divided into three classes. We refer to these classes as Class I, Class II and Class III. The term of a class of directors expires each year at the annual meeting of stockholders. Each director continues to serve as a director until his or her successor is duly elected and qualified, or until his or her earlier removal, death or resignation. This year, the terms of the Class III directors, Michael R. Minogue, Martin P. Sutter and Paula A. Johnson, expire at the annual meeting of stockholders to be held on August 10, 2022 (the “2022 Annual Meeting”). Dorothy E. Puhy, Paul G. Thomas and Christopher D. Van Gorder currently serve as Class I directors, with their terms of office expiring at the 2023 Annual Meeting of Stockholders, and Eric A. Rose, Jeannine M. Rivet and Myron L. Rolle currently serve as Class II directors, with their terms of office expiring at the 2024 Annual Meeting of Stockholders.

Our Board of Directors has nominated each of Michael R. Minogue, Martin P. Sutter and Paula A. Johnson to serve as a Class III director for a three-year term until the 2025 Annual Meeting of Stockholders, or until his or her successor has been duly elected and qualified or until his or her earlier removal, death or resignation. If any nominee at the time of the 2022 Annual Meeting is unable or unwilling to serve or is otherwise unavailable for election, and our Board of Directors designates another nominee, the persons named as proxies will vote the proxy for such substitute nominee. Our Board of Directors has no reason to believe that any substitute nominee or nominees will be required, and all of the nominees have indicated that they will be willing and able to serve as directors and to serve if elected. The nominees are not being nominated pursuant to any arrangement or understanding with any person.

The following information describes the offices held and other business directorships of each nominee for election at the 2022 Annual Meeting and each director continuing in office beyond the 2022 Annual Meeting. Ages set forth below are as of June 13, 2022. The beneficial ownership of equity securities of the nominees and other directors is described in “Security Ownership of Certain Beneficial Owners and Management.”

Class III – Nominees for Term Expiring This Year

The Governance and Nominating Committee and the Board believe that each of the nominees for election at the 2022 Annual Meeting meets the qualifications for a director nominee. The particular experience, qualifications and skills of each nominee that the Governance and Nominating Committee believes will advance the Company’s goals are included in the individual biographies below. The Governance and Nominating Committee and the Board believe that, as a group, these nominees provide the Board with an optimal balance of experience, leadership, competencies, qualifications and skills.

 

1

Class III – Directors Whose Term Expires in 2022

 

		MICHAEL R. MINOGUE
Director Since: 2004   Age: 55		Position, Principal Occupation, Professional Experience, Other Non-Public Company Directorships and Other Information:   Chairman, President and Chief Executive Officer, ABIOMED. Mr. Michael R. Minogue has been Chairman, President and Chief Executive Officer of ABIOMED (NASDAQ: ABMD) since 2004. Mr. Minogue transitioned the Company’s mission to creating the field of heart and lung recovery with the acquisition and development of technologies such as Impella®, the world’s smallest heart pump, and the ABIOMED Breethe OXY-1 System for extracorporeal membrane oxygenation (“ECMO”). ABIOMED has been one of the fastest-growing, most GAAP-profitable MedTech companies and ranked the third best-performing stock on the S&P 500 for the last decade. ABIOMED has earned numerous global regulatory approvals on products and indications in the United States, Europe, Japan and other countries. ABIOMED employs approximately 2,000 people with facilities in Danvers, Massachusetts, Aachen and Berlin, Germany, Baltimore, Maryland, and Tokyo, Japan.   In addition to his responsibilities at ABIOMED, Mr. Minogue currently serves as Chairman of the medical device industry association board of directors for AdvaMed. He also serves on Insulet Corporation’s Board of Directors and was on the boards of LifeCell, Bioventus and the Medical Device Innovation Consortium (MDIC).   Before joining ABIOMED, Mr. Minogue spent 11 years with General Electric Healthcare, where he held numerous leadership positions and holds three patents. Mr. Minogue also served as an officer in the U.S. Army, which included multiple distinctions, including Airborne, Ranger, Desert Storm Veteran and Bronze Star. He received his Bachelor of Science degree in Engineering Management from the United States Military Academy at West Point and his Master of Business Administration from the University of Chicago.   Mr. Minogue co-founded the Mike and Renee Minogue Foundation and the Mentoring Veterans Program (MVPvets) (www.mvpvets.org), a 501(c)(3) nonprofit organization that helps military veterans network with industry mentors to discover career opportunities in the MedTech industry. He serves on the Board of Directors after serving as the Chairman for the past eight years. Mr. Minogue formerly served as the Chairman of the Governor’s Advisory Council on Veterans’ Services for Massachusetts and supports the Inner-City Scholarship Fund, Boys and Girls Club, and multiple educational initiatives. Mr. Minogue is married with five children and enjoys reading, mentoring, running, coaching, skiing and playing sports.   Director Qualifications: We believe that Mr. Minogue’s extensive knowledge as an executive of the Company and former executive leadership experience in the healthcare industry, as well as his experience as a board member of medical device and technology companies, qualifies him to lead our management team and serve as a member of our Board of Directors.

 

2

		MARTIN P. SUTTER
Director Since: 2008   Board Committees: •    Compensation •    Governance and Nominating (Chair)   Age: 67		Position, Principal Occupation and Professional Experience:   Co-Founder and a Managing Director, EW Healthcare Partners. Since 1985, Mr. Sutter has been the Co-Founder and a Managing Director of EW Healthcare Partners, previously known as Essex Woodlands Health Ventures, a healthcare-focused growth equity firm. Educated in chemical engineering and finance, Mr. Sutter has more than 40 years of management experience in operations, marketing, finance and venture capital. Mr. Sutter holds a Bachelor of Science degree from Louisiana State University and a Master of Business Administration from the University of Houston.   Other Current and Past Company Directorships, Trusteeships and Memberships: Board of Directors of Bioventus, Inc., a publicly held orthobiologics company focused on active healing therapies, biosurgical products and sports medicine; Board of Directors of Prolacta Bioscience, Inc., a privately held company which provides human milk-based nutritional products for critically ill, premature infants in neonatal intensive care units; and Board of Directors of MiMedx Group Inc., a publicly held regenerative medicine company with a specialized focus on tissue from the amniotic membrane and umbilical cord, with wide-ranging clinical applications across wound care and musculoskeletal impairments. Formerly on the Boards of Directors of the following EW Healthcare Partners’ portfolio investments: ATS Medical (later acquired by Medtronic, Inc.); BioForm Medical (later acquired by Merz GmbH & Co KGaA); LifeCell (later acquired by Kinetic Concepts); St. Francis Medical (later acquired by Kyphon, Inc./Medtronic, Inc.); Confluent Surgical (later acquired by Tyco International/Covidien); and Rinat Neurosciences (later acquired by Pfizer, Inc.). Mr. Sutter is also a former Trustee of the Culinary Institute of America.   Director Qualifications: We believe that Mr. Sutter’s in-depth knowledge of the medical device industry, his skills as an investor in developing medical device companies, his extensive board experience and his position as a representative of a large stockholder in our Company qualify him to serve as a member of our Board of Directors.

 

3

		PAULA A. JOHNSON, MD, MPH
Director Since: 2021   Board Committees: •    Governance and Nominating   Age: 62		Position, Principal Occupation and Professional Experience:   Cardiologist; President of Wellesley College. Dr. Johnson has served as the president of Wellesley College since 2016. She is a physician-researcher specializing in cardiology who founded and served as the inaugural Executive Director of the Connors Center for Women’s Health and Gender Biology at Brigham and Women’s Hospital from July 2002 to June 2016. Dr. Johnson served as the Chief of the Division of Women’s Health at Brigham and Women’s Hospital from July 2002 to June 2016. She was also a Professor of Medicine at the Harvard Medical School and Professor of Epidemiology at the Harvard School of Public Health. She holds a Bachelor of Arts, Doctor of Medicine and Masters in Public Health from Harvard University, and trained in internal medicine and cardiovascular medicine at Brigham and Women’s Hospital.   Past Public Company Directorships: West Pharmaceutical Services, Inc. and Eaton Vance Corp.   Current Non-Public Company Directorships: Director of the Isabella Stewart Gardner Museum since 2015; member of the Board of Trustees of Rockefeller University since November 2021.   Director Qualifications: We believe that Dr. Johnson’s expertise in healthcare and health policy, as well as her experience and perspective as a cardiologist and medical researcher, qualify her to serve as a member of our Board of Directors.

 

4

Continuing Members of the Board of Directors

The directors whose biographies are below will continue in office beyond the term of the 2022 Annual Meeting.

Class I – Directors Whose Term Expires in 2023

 

		DOROTHY E. PUHY
Director Since: 2003 •    Lead Director (since 2005)   Board Committees: •    Audit (Chair) •    Risk and Compliance   Age: 70		Position, Principal Occupation and Professional Experience:   Former Executive Vice President and Chief Operating Officer, Dana-Farber Cancer Institute. Ms. Puhy served as Executive Vice President and Chief Operating Officer for the Dana-Farber Cancer Institute from 2012 until her retirement in March 2019. Ms. Puhy previously served as the Chief Financial Officer of the Dana-Farber Cancer Institute from 1994 to 2012 and as its Assistant Treasurer from 1995 to 2012. From 1985 to 1994, Ms. Puhy held various financial positions at the New England Medical Center Hospitals, Inc., including Chief Financial Officer from 1989 to 1994. Ms. Puhy received her Bachelor of Arts from the University of Pennsylvania and her Master of Business Administration from the Wharton School of Business at the University of Pennsylvania.   Past Public Company Directorships: Eaton Vance Corp. (from April 2006 until its acquisition in March 2021).   Other Current and Past Non-Public Company Directorships, Trusteeships and Memberships: Chair of the board of directors of Blue Cross Blue Shield of Massachusetts and member of the board of directors of CRICO (a captive professional and general liability insurance company). Formerly on the board of directors of United Way of Massachusetts Bay and Merrimack Valley (from 2015 through June 2020).   Director Qualifications: We believe that Ms. Puhy’s financial acumen, her executive-level experience at a major medical research institute and her extensive industry knowledge qualify her to serve as a member of our Board of Directors.

 

5

		PAUL G. THOMAS
Director Since: 2011   Board Committees: •    Compensation (Chair) •    Risk and Compliance   Age: 66		Position, Principal Occupation, Professional Experience:   Chief Executive Officer and Founder, Prominex, Inc. In January 2018, Mr. Thomas co-founded Prominex, Inc., a start-up company focused on the development of molecular diagnostic assays for point-of-care infectious disease testing. Mr. Thomas currently serves as Prominex’s Chief Executive Officer. Prior to his employment with Prominex, Mr. Thomas served as the founder, President, Chief Executive Officer and director of Roka Bioscience, Inc. from September 2009 until his retirement in January 2017. Previously, he served as President, Chief Executive Officer and Chairman of LifeCell from October 1998 until its acquisition by Kinetic Concepts. Prior to joining LifeCell, Mr. Thomas held various senior positions, including President of the Pharmaceuticals division, during a 15-year tenure with Ohmeda Inc. Mr. Thomas received his Bachelor of Science in Chemistry from St. Michael’s College and his Master of Business Administration from Columbia University, and completed his postgraduate studies in chemistry at the University of Georgia.   Other Current Public Company Directorships: Surgalign Holdings, Inc. (formerly known as RTI Surgical Holdings, Inc.) and Axogen, Inc.   Past Public Company Directorships: Aegerion Pharmaceuticals, Inc.   Director Qualifications: We believe that Mr. Thomas’ extensive leadership experience with companies in the life sciences industry qualifies him to serve as a member of our Board of Directors.

 

6

		CHRISTOPHER D. VAN GORDER, FACHE
Director Since: 2016   Board Committees: •    Governance and Nominating •    Risk and Compliance (Chair)   Age: 69		Position, Principal Occupation and Professional Experience:   President, Chief Executive Officer and Director of Scripps Health. Since December 1999, Mr. Van Gorder has been President, Chief Executive Officer and a director of Scripps Health, where he oversees all functions of the integrated health system. Mr. Van Gorder currently is a clinical professor of health practice at the University of Southern California Price School of Public Policy. Mr. Van Gorder received his undergraduate degree from California State University, Los Angeles, and his master’s degree in public administration/health services administration from the University of Southern California. He has also completed the Chief Executive Officer Program at the Wharton School of Business at the University of Pennsylvania.   Other Current and Past Non-Public Company Directorships, Trusteeships and Memberships: Formerly served as Chairman of the Board of Governors for the American College of Healthcare Executives, and formerly on the boards of directors of Z-Medica, LLC, the California Hospital Association and the Hospital Association of San Diego and Imperial Counties.   Director Qualifications: We believe that Mr. Van Gorder’s experience as a business leader, his expertise in the healthcare field and his executive-level industry experience qualify him to serve as a member of our Board of Directors.

 

7

Class II – Directors Whose Term Expires in 2024

 

		ERIC A. ROSE, MD
Director Since: 2014 (formerly a director from 2007 – 2012)   Board Committees: •    Audit   Age: 71		Position, Principal Occupation and Professional Experience:   Former Non-Executive Chairman, SIGA Technologies, Inc. Dr. Rose served as Chairman of SIGA Technologies, Inc. (“SIGA”), a developer of antiviral drugs directed at potential agents of bioterror, from 2013 until June 2021. SIGA successfully developed a cure for smallpox, which is now in the strategic national stockpile of the United States government. The company has received more than $600 million in contract revenue and research support from the United States Biomedical Advanced Research and Development Authority. The company filed voluntary proceedings under Chapter 11 of the United States Bankruptcy Code in September 2014 and exited from bankruptcy protection in April 2016. Dr. Rose served from 2007 to 2016 as Executive Vice President for Life Sciences at MacAndrews & Forbes and Chief Executive Officer and Chairman of SIGA. Dr. Rose chaired the Department of Health Evidence & Policy at the Mount Sinai School of Medicine from 2008 to 2013, where he now serves as professor. From 1994 to 2007, he was Surgeon-in-Chief at New York-Presbyterian Hospital/Columbia and Chairman of the Department of Surgery at the Columbia University College of Physicians and Surgeons. A heart surgeon, researcher and entrepreneur, Dr. Rose helped grow Columbia’s Department of Surgery over 25 years while investigating, managing and developing complex medical technologies. He has authored or co-authored more than 300 scientific publications and has received more than $25 million in NIH support for his research. Dr. Rose pioneered heart transplantation in children, performing the first successful pediatric heart transplant in 1984, and has investigated many alternatives to heart transplantation, including cross-species transplantation and man-made heart pumps. He received both his undergraduate and medical degrees from Columbia University.   Other Public Company Directorships: Mesoblast Ltd.   Other Current Non-Public Company Directorships: Member of the board of directors of Orchestra Biomed.   Past Public Company Directorships: SIGA.   Director Qualifications: We believe that Dr. Rose’s distinguished work as a heart surgeon and researcher, his work as an entrepreneur in our industry and his executive-level industry experience qualify him to serve as a member of our Board of Directors.

 

8

		JEANNINE M. RIVET
Director Since: 2016   Board Committees: •    Compensation •    Audit   Age: 74		Position, Principal Occupation and Professional Experience:   Former Executive Vice President, UnitedHealth Group. Ms. Rivet served as Executive Vice President of UnitedHealth Group from 2001 until her retirement in 2018. Previously, she served as Chief Executive Officer of UnitedHealthcare from 1998 to 2001, Chief Executive Officer of Ingenix from 2001 to 2003 and Chief Executive Officer of Optum from December 2003 to 2005. Ms. Rivet received her Bachelor of Science in Nursing from Boston College and her Master’s Degree in Public Health from Boston University. She also worked as a registered nurse for several years prior to entering the managed care business.   Other Current and Past Non-Public Company Directorships, Trusteeships and Memberships: Board member of Ōmcare Inc., a healthcare technology solutions company. Formerly an advisory board member of Solutran, Inc., a customized treasury management company, and formerly on the board of directors of Schwan Food Company.   Director Qualifications: We believe that Ms. Rivet’s extensive knowledge of the managed care business, her direct healthcare experience, her executive-level experience and her management abilities and experience qualify her to serve as a member of our Board of Directors.

 

9

		MYRON L. ROLLE, MD
Director Since: 2021   Board Committees: •    Governance and Nominating •    Risk and Compliance   Age: 35		Position, Principal Occupation and Professional Experience:   Global Neurosurgery Fellow and Resident, Massachusetts General Hospital. Dr. Rolle has served as a Global Neurosurgery Fellow and Neurosurgery Resident at Massachusetts General Hospital since 2017. As a neurosurgeon, Dr. Rolle has been recognized by the Congress of Neurological Surgeons for demonstrating the best operative technique in the reconstruction of upper extremity motor function using intercostal nerve transfers after a traumatic brachial plexus injury. He is the developer of the Rolle Scoring System, a public health rating scale used to determine a developing country’s governance around helmet safety to prevent traumatic brain injury. Dr. Rolle is a former professional football player who played in the National Football League for the Tennessee Titans and Pittsburgh Steelers between 2010 and 2012. He holds a Bachelor of Science in exercise science from Florida State University, a Doctor of Medicine from Florida State University College of Medicine and a Master of Science in medical anthropology from the University of Oxford.   Other Current Non-Public Company Directorships, Trusteeships and Memberships: Chairman of the Myron L. Rolle Foundation; founder of the CARICOM Neurological Service Initiative.   Director Qualifications: We believe that Dr. Rolle’s broad mix of skills and experiences as a neurosurgeon, former professional athlete and innovative medical researcher provide unique perspectives on the role of medical technology in improving patient outcomes and qualify him to serve as a member of our Board of Directors. Additionally, as a first-time director of a public company, Dr. Rolle brings a fresh perspective to our Board and on the Company’s capacity for growth.

Our Board of Directors recommends that you vote FOR the election of each of Mr. Minogue, Mr. Sutter and Dr. Johnson.

 

10

Proposal No. 2 – Advisory Vote on Compensation of Our Named Executive Officers

Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and related SEC rules, we are required to provide our stockholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our “named executive officers” as disclosed in this proxy statement (the “Proxy Statement”) in the “Compensation Discussion and Analysis,” compensation tables and accompanying narrative disclosures from pages 35 to 57. We refer to this non-binding advisory vote as the “say-on-pay” vote. Although this vote is not binding on us, our Board of Directors and the Compensation Committee of our Board of Directors (the “Compensation Committee”) will carefully consider the outcome of the vote in making future decisions on executive compensation.

As described in the “Compensation Discussion and Analysis” section below, by offering compensation that is competitive with peer organizations, our compensation programs are designed to attract, retain and motivate our executive officers and to reward superior financial, strategic and operational performance in a manner consistent with our team-oriented values and corporate goals. Our compensation consists of a mixture of cash payments and equity incentives, which we believe aligns our executive compensation with the interests of our stockholders. The Compensation Committee reviews our compensation policies annually with the help of Willis Towers Watson, a compensation consultant, to understand how our policies compare to market practices and to create incentives to attract, retain and motivate our workforce. We encourage you to carefully review the “Compensation Discussion and Analysis” section for a discussion of the factors underlying the structure of our executive compensation program.

We are asking you to indicate your support for the compensation of our named executive officers for fiscal 2022 as described in this Proxy Statement. The vote on this proposal is not intended to address any specific element of compensation but rather relates to the overall compensation of our named executive officers, as described in this Proxy Statement pursuant to Item 402 of Regulation S-K (including in the Compensation Discussion and Analysis, compensation tables and accompanying narrative disclosures). Thus, we ask our stockholders to vote in favor of the following resolution at the 2022 Annual Meeting:

“RESOLVED, that the Stockholders of ABIOMED, Inc. APPROVE, on an advisory basis, the compensation paid to the named executive officers, as disclosed in the Company’s Proxy Statement for the 2022 Annual Meeting of Stockholders, pursuant to Item 402 of Regulation S-K, including the ‘Compensation Discussion and Analysis,’ the compensation tables and accompanying narrative disclosures.”

Our Board of Directors recommends that you vote FOR the non-binding, advisory vote on the compensation of our named executive officers, as disclosed in this Proxy Statement.

 

11

Proposal No. 3 – Ratification of Appointment of our Independent Registered Public Accounting Firm

Under the rules of the Securities and Exchange Commission and The Nasdaq Stock Market LLC, the appointment of our independent registered public accounting firm is the direct responsibility of the Audit Committee of our Board of Directors (the “Audit Committee”).

Our Audit Committee, comprised solely of independent directors, has reappointed Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending March 31, 2023. The Audit Committee and the Board of Directors believe that the continued retention of Deloitte & Touche LLP to serve as the Company’s independent registered public accounting firm is in the best interests of the Company and its stockholders. Our Board of Directors recommends that stockholders vote to ratify the appointment. If our stockholders do not ratify the appointment of Deloitte & Touche LLP, the Audit Committee may reconsider its decision. Additionally, even if stockholders ratify the appointment, the Audit Committee may, in its discretion, appoint a new independent registered public accounting firm at any time during the year if it believes that such a change would be in the best interest of the Company and its stockholders. For information on the fees paid by us to Deloitte & Touche LLP in the fiscal year ended March 31, 2021 (“fiscal 2021”) and fiscal year ended March 31, 2022 (“fiscal 2022”), see “Independent Registered Public Accounting Firm Fees.”

Although ratification by our stockholders of this appointment is not required by law, our Board of Directors believes that seeking stockholder ratification is a good practice, which provides stockholders an avenue to express their views on this important matter. If stockholders do not ratify the appointment, the Audit Committee will reconsider whether to retain Deloitte & Touch LLP, but may choose to do so.

We expect that representatives of Deloitte & Touche LLP will attend the 2022 Annual Meeting. They will have an opportunity to make a statement if they wish and will be available to respond to appropriate questions from stockholders who attend the 2022 Annual Meeting.

Our Board of Directors recommends that you vote FOR the proposal to ratify the appointment by our Audit Committee of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending March 31, 2023.

 

12

Our executive officers are appointed by, and serve at the discretion of, our Board of Directors. Our currently serving executive officers who are not also directors are listed below. For a list of Named Executive Officers for purposes of this Proxy Statement, see “Compensation Discussion and Analysis—Our Named Executive Officers in Fiscal 2022.” For information on Mr. Minogue, see “Class III – Nominees for Term Expiring This Year” under “Proposal No. 1 – Election of Directors.” Ages set forth below are as of June 13, 2022. There are no family relationships among our directors and executive officers.

 

		TODD A. TRAPP
Executive Vice President and Chief Financial Officer   Age: 51		Principal Occupation and Other Information   Mr. Trapp was appointed as our Vice President and Chief Financial Officer on April 9, 2018 and became an Executive Vice President as of April 1, 2022. He currently oversees the Finance, IT and Human Resources functions. He joined us from Watts Water Technologies, Inc., a $1.8 billion global manufacturing leader of innovative products to control the efficiency, safety and quality of water within residential and commercial applications, where he served as Chief Financial Officer from April 2015 to March 2018. Prior to joining Watts Water Technologies, Mr. Trapp spent 13 years in a variety of financial and operational roles at Honeywell International Inc., a $34 billion diversified technology and manufacturing company. At Honeywell, Mr. Trapp served as Vice President of Financial Planning and Analysis, Chief Financial Officer of the Airlines Business Unit, Director of Finance for the Transportation Systems Business Division, Investor Relations Manager and other senior finance positions. Prior to joining Honeywell, Mr. Trapp held several treasury and finance operational roles at United Business Media, Inc. and Pearson, Inc. Mr. Trapp holds a Bachelor of Science in Accounting from Providence College and a Master of Business Administration in Finance from Northeastern University.

 

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		ANDREW J. GREENFIELD
Executive Vice President and Chief Commercial Officer   Age: 49		Principal Occupation and Other Information   Mr. Greenfield was appointed as our Vice President and Chief Commercial Officer in April of 2020 and became an Executive Vice President as of April 1, 2022. He joined us in 2005 and previously served as our Vice President and General Manager, Global Marketing. In addition to overseeing our global commercial operations, Mr. Greenfield oversees government affairs, reimbursement, global marketing, Asia Pacific and physician programs. Before joining us, Mr. Greenfield held positions in sales, marketing and finance at GE Healthcare, including consulting with large U.S. health systems, eCommerce and Six Sigma from 1999 to 2005. Prior to GE Healthcare, he held positions in sales, marketing and finance at The Boeing Company, including European Country Manager, and is a graduate of the Fiscal Development Program.   Mr. Greenfield is currently chairman-elect and an executive committee member for MassMEDIC in Boston, Massachusetts, a public-private partnership that coordinates the resources used in managing medical devices to improve patient access to cutting-edge medical technology. He is a past executive committee member of the Medical Device Innovation Consortium, which aims to advance safer and more cost-effective innovations that benefit patients through a collaboration between the Centers for Medicare & Medicaid, the U.S. Food and Drug Administration (the “FDA”), industry and patients.   Mr. Greenfield received his Bachelor’s degree in Finance from the University of Illinois and Master of Business Administration degree from St. Louis University. He is also a certified Master Blackbelt in Six Sigma and Change Acceleration Process from GE Healthcare.

 

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		MARC A. BEGAN
Executive Vice President, General Counsel and Secretary   Age: 55		Principal Occupation and Other Information   Mr. Began joined us in June 2018 as our Vice President, General Counsel, and Secretary. He became an Executive Vice President as of April 1, 2022 and is responsible for leading the Company’s legal, compliance and business development functions. Mr. Began joined us from Boehringer Ingelheim, where he was Vice President of intellectual property, responsible for medical device, pharmaceutical, and biologic intellectual property issues. Before joining Boehringer Ingelheim, Mr. Began held various positions of increasing responsibility at Novo Nordisk during a 15-year period. Before joining Novo Nordisk, Mr. Began was an associate at the law firms of Sullivan & Cromwell LLP and White & Case LLP in New York, where he handled a broad range of legal matters, including litigation, intellectual property, corporate transactions, regulatory and compliance. Mr. Began earned a Juris Doctor degree from Albany Law School at Union University and holds a Bachelor of Science degree in Mechanical Engineering from Rensselaer Polytechnic Institute.

 

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		MATTHEW T. PLANO
Executive Vice President, Global Operations and Integration   Age: 57		Principal Occupation and Other Information   Mr. Plano became Executive Vice President, Global Operations and Integration on April 1, 2022. Mr. Plano is responsible for executing strategic imperatives and driving efficient operations across ABIOMED’s manufacturing, supply chain and quality departments.   Prior to his role as Executive Vice President, Global Operations and Integration, Mr. Plano held the position of Vice President, Global Manufacturing and Supply Chain, overseeing both our Danvers and Aachen facilities as well as our European and U.S. supply chains. Prior to this role, Mr. Plano held various positions within product development, engineering, manufacturing and operations/finance during his tenure at ABIOMED. He has helped transition every product ABIOMED has developed from the AbioCor Total Artificial Heart, the AB5000 Ventricle and all platforms of the Impella® product line. Prior to joining us in 1997, Mr. Plano was a program manager for the U.S. Air Force for approximately 10 years delivering satellite communication and airborne radar systems.   Mr. Plano holds his Bachelor of Science degree in aerospace engineering from the University of Buffalo and holds his Master of Business Administration from the University of Massachusetts. He is also Lean certified, is a Six Sigma Blackbelt and obtained a degree in quality/reliability engineering while serving with the U.S. Air Force.

 

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Corporate Governance Highlights

Our Board of Directors oversees the management of our business and affairs, and conducts its business through meetings of the Board of Directors and four standing committees: Audit, Compensation, Governance and Nominating and Risk and Compliance. In addition, from time to time, special committees may be established under the direction of the Board of Directors when necessary to address specific issues. The following shows an overview of the composition of our Board, as further detailed below.

Our commitment to good corporate governance is also reflected in the following additional traits and practices of our Board of Directors and committees, as further detailed in the below sections of this Proxy Statement.

Key Director Statistics

 

 

 

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BOARD COMPOSITION AND ACCOUNTABILITY

 

Board    independence		Except for Mr. Minogue, all members of the Board are independent.
Committee    independence		All committees are comprised of independent directors.
Executive    sessions		Independent members of the Board, the Audit Committee and the Compensation Committee meet regularly in executive session without any members of management present.
Annual Board and    committee self-    evaluations		Each of the Board and its committees evaluates and discusses its respective performance and effectiveness annually.
Engagement with    stockholders		The Board and management value the perspectives of our stockholders and work to provide our stockholders with meaningful engagement.
Risk oversight		The Board and committees annually review their oversight of risk and the allocation of risk oversight among the committees.
ESG oversight		The Board and management, in conjunction with our Governance and Nominating Committee, have oversight responsibility for our environmental, social and governance (“ESG”) strategy.
Proxy access		Following engagement with our stockholders, we amended our bylaws to provide for proxy access, by which a group of up to 20 stockholders who have continuously owned at least 3% of our outstanding shares for at least three years may nominate up to 20% of our Board (but in any event at least two directors). See “Stockholder Proposals for 2023” below for additional details.

DIRECTOR COMPENSATION

 

Time-vesting    restricted stock    units (“RSUs”)		Each of our non-employee directors currently receives more than 50% of his or her annual compensation from us in the form of RSUs (based on the grant date fair value of $200,000 annual grants).
Director stock    ownership    guidelines		Each of our directors is required to beneficially own shares of our common stock with the equivalent value, as of the acquisition date, of at least five times his or her aggregate annual cash retainer, by the date of the fifth anniversary of his or her appointment.
Compensation    review		The Compensation Committee periodically reviews the appropriateness of our director compensation in consultation with its independent compensation consultant, Willis Towers Watson.

 

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Director Independence

Our Board of Directors has affirmatively determined that, other than Mr. Minogue, who is our Chairman, President and Chief Executive Officer, none of our directors or director nominees has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Therefore, under the applicable rules of the Nasdaq Stock Market, all of the members of our Board, other than Mr. Minogue, are “independent directors.” Additionally, each member of our Audit Committee, Compensation Committee, Governance and Nominating Committee and Risk and Compliance Committee is an “independent director” under the rules of The Nasdaq Stock Market LLC (the “Nasdaq Stock Market”) and the Securities and Exchange Commission (the “SEC”) applicable to such committees. In connection with its independence determination, the Board of Directors specifically considered the following:

 

Director		Relationship
Dorothy E. Puhy		Ms. Puhy, our Lead Director, is chair of the board of directors of Blue Cross Blue Shield of Massachusetts, which was the Company’s employee health insurance program provider until December 31, 2021. The Board did not consider this relationship as impairing Ms. Puhy’s independence.
Christopher D. Van Gorder, FACHE		Mr. Van Gorder is Chief Executive Officer of Scripps Health, which purchases our products and services. We recognized $1.9 million in revenues from Scripps Health during fiscal 2022, which represented less than 1% of our revenues for such year. We expect Scripps Health will continue to purchase our products in the future. The Board did not consider these amounts as impairing Mr. Van Gorder’s independence, insofar as they represented less than 1% of our total revenues in fiscal 2022, and we do not depend on Scripps Health for any significant aspect of our business.

Board Leadership

How We Select Our Leadership Structure

The Board believes that “one size” does not fit all, and thus it does not have a formal policy regarding whether the same person should serve as both the Chief Executive Officer and Chairman of the Board. The Board believes that the decision of whether to combine or separate the positions of Chief Executive Officer and Chairman should be based on the Company’s particular circumstances at a given point in time and that it should retain the flexibility to make this determination in the manner it feels will provide the most appropriate leadership for the Company.

We have maintained the position of Lead Director, which is held by one of our independent directors, since 2005. The Board believes that the responsibilities of the Lead Director help to ensure appropriate oversight of the Company’s management by the Board and optimal functioning of the Board. The effectiveness of the Lead Director is enhanced by the Board’s independence, as discussed above under “Director Independence.”

Our Chairman and Lead Director are appointed annually by the Board.

Our Current Board Leadership Structure

 

Michael R. Minogue    Chairman, President and    Chief Executive Officer		Mr. Minogue serves as Chairman of our Board of Directors, President and Chief Executive Officer and has held such positions for the past 17 years. The combined role of Chairman and Chief Executive Officer, in the case of the Company, means that the Chairman of the Board has longstanding experience in our industry and ongoing executive responsibility with the Company. This experience enables the Board to understand the Company better and work with management to enhance stockholder value. In addition, the Board believes that this structure allows it to fulfill more effectively its risk oversight responsibilities and enhances the ability of the Chairman, President and Chief Executive Officer to effectively communicate the view of the Board to management.

 

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Dorothy E. Puhy    Lead Director		Ms. Puhy has served on our Board of Directors since 2003, and has served as its Lead Director since 2005. The position of Lead Director is to be held by one of our independent directors and has responsibilities beyond those of the other directors, including, but not limited to:   •   Board leadership — organizing and chairing executive sessions of independent directors;   •   Chief Executive Officer performance goals and evaluation — working with the Compensation Committee to set performance goals for our Chairman, President and Chief Executive Officer and to evaluate his performance for the prior year;   •   Chairman-independent director liaison — acting as a liaison between the Chairman and the Board of Directors; and   •   Chief Executive Officer succession planning — leading an annual discussion of succession planning with the Chief Executive Officer and our chair of the Governance and Nominating Committee.

Director Selection and Qualifications

The Governance and Nominating Committee is responsible for recommending director candidates for election at stockholder meetings, including incumbent directors and newly appointed directors, and for reviewing the full composition of the Board and its committees on a periodic basis, including directors not up for re-election.

Director Selection Process

When determining whether the Board’s incumbent director nominees and directors not up for re-election possess the experience, qualifications, attributes and skills, taken as a whole, to enable the Board to satisfy its oversight responsibilities effectively in light of the Company’s business and structure, the Governance and Nominating Committee and the Board consider the results of the annual Board and committee evaluations and directors’ skills and experiences, which are summarized in the Board members’ biographies above in “Proposals Requiring Your Vote—Proposal No. 1 – Election of Directors” and in the matrix below at page 22. For more information, see “Board and Committee Evaluations” below. In addition, the Governance and Nominating Committee and Board of Directors consider these directors’ valuable contributions to the Company’s success during their years of Board service.

As part of its recurring activities, including when there are vacancies on our Board, the Governance and Nominating Committee and the Board also seek to identify qualified new candidates to serve on the Board. To identify and recruit qualified candidates for the Board, the Governance and Nominating Committee has previously utilized the services of professional search firms and/or sought referrals from other members of the Board, management, stockholders and other sources. After conducting an initial evaluation of a candidate, one or more members of the Governance and Nominating Committee will interview that candidate if the committee believes the candidate might be suitable to be a director and may ask the candidate to meet with other directors and management. If the Governance and Nominating Committee believes a candidate would be a valuable addition to the Board, it will recommend to the full Board of Directors that candidate’s election. For details on the qualifications considered by the Governance and Nominating Committee in evaluating incumbent director nominees, new directors and directors not up for re-election, see “Director Qualifications” below.

Director Qualifications

In nominating director candidates and evaluating directors not up for re-election, the Governance and Nominating Committee reviews a number of factors, qualifications and skills it deems appropriate.

 

•

Demonstrated integrity and achievement: Candidates for membership to our Board, as well as directors serving on our Board not up for re-election, should possess the highest personal and professional ethics, mature judgment and integrity, the ability to work collegially with the other Board members and demonstrated professional achievement and leadership capabilities.

 

 

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•

Time and availability: All candidates, as well as directors not up for re-election, must evidence a commitment to devote the substantial time and energy required of productive Board members.

 

•

Diversity and effective mix of tenures: The Governance and Nominating Committee and the Board seek out director nominees who will bring diverse viewpoints, perspectives and skills, including in their professional experience and backgrounds, and who can effectively represent the long-term interests of our stockholders.

The Board believes that its focus on effective Board composition is reflected in the variety of director tenures and aspects of diversity exhibited by its directors.

 

Board Tenure   When recommending to the Board the slate of director nominees for election at an annual meeting of stockholders and reviewing directors not up for re-election, the Governance and Nominating Committee strives to maintain a healthy degree of board refreshment and prevent excessive entrenchment, while weighing the strong contributions delivered by directors with deep knowledge of our Company’s history and strategic long-term goals. As shown below, the Board’s balanced approach to refreshment has resulted in an appropriate mix of long-serving and newer directors. Since 2016, four new directors have joined our Board, including one director who joined in fiscal 2021 and another at the start of fiscal 2022.

Board Diversity

The Governance and Nominating Committee and the Board seek candidates with a broad diversity of knowledge, experience and demonstrated expertise in areas of importance to our Company, such as management, healthcare, finance, marketing, technology, medical technology, cardiac research, human resources, public policy and law. Key areas identified by the Governance and Nominating Committee include the following, among others:

 

Director Skills and Experience
Outside Public Board    Leadership		Experience as a board chair, lead director, committee chair or director on another public company board (while reviewed in light of our expectations for directors’ commitment to our Board) helps ensure our Board is qualified to assess and oversee the performance of management effectively.
Senior Executive    Leadership		Experience effectively running teams while in an executive, officer or management role helps provide our Board with insight into and an understanding of making management decisions.
Healthcare or Life    Sciences Industry		Experience as an executive, medical researcher, clinical director or other background in the healthcare or life sciences industry better equips our Board with an understanding of our market needs and strategic business outlook.
Scientific or Medical    Technology Expertise		Experience in a leadership role in science or medical technology or development provides our Board with expertise in the innovation required in engineering products, as well as the rapidly changing technologies used in medical devices.
Medical Device    Company Operations		In addition to knowledge of scientific or medical technology, experience in the day-to-day operations of medical device or technology companies increases our Board’s knowledge of the distribution and manufacturing requirements for our product line.
Direct Patient Care    Experience		Experience serving patients as a physician, surgeon, nurse or other healthcare practitioner on the front lines helps ensure our Board’s alignment with our “Patients First” mission to recover hearts and save lives.

 

 

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In considering each director nominee and our incumbent directors not up for re-election, the Governance and Nominating Committee and the Board evaluated the key qualifications, skills, experience and perspectives that he or she could bring to the Board, including in light of the areas summarized in the matrix below. Nominees or incumbents not up for election may possess qualifications, skills, experiences and perspectives that the Governance and Nominating Committee and the Board may have evaluated beyond those listed below.

 

OUTSIDE PUBLIC BOARD LEADERSHIP

SENIOR EXECUTIVE LEADERSHIP

HEALTHCARE OR LIFE SCIENCES INDUSTRY

SCIENTIFIC OR MEDTECH EXPERTISE

MEDICAL DEVICE COMPANY OPERATIONS

DIRECT PATIENT CARE EXPERIENCE

Michael R. Minogue

✓

✓

✓

✓

✓

Paula A. Johnson

✓

✓

✓

✓

✓

Dorothy E. Puhy

✓

✓

✓

Jeannine M. Rivet

✓

✓

✓

✓

Myron L. Rolle

✓

✓

✓

Eric A. Rose

✓

✓

✓

✓

✓

Martin P. Sutter

✓

✓

✓

✓

✓

Paul G. Thomas

✓

✓

✓

✓

✓

Christopher D. Van Gorder

✓

✓

The Governance and Nominating Committee also considers traditional diversity factors such as race/ethnicity and gender. Although it has no formal policy, guidelines or procedures with respect to consideration of diversity in the nominating process, the Governance and Nominating Committee seeks to create a Board composed of directors with sufficiently diverse and independent backgrounds. The tables below provide additional information regarding our directors’ self-identified gender and race/ethnicity.

 

 

 

 

Stockholder Proposals of Candidates for Membership to Our Board of Directors

Our Governance and Nominating Committee will review all candidates for director (including nominees for director pursuant to our proxy access bylaw) in the same manner, regardless of the source of the recommendation. Candidates recommended by our stockholders will be considered in accordance with the requirements for such recommendations. See “Stockholder Proposals for 2023” below for additional details.

 

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Director Resignation Policy

Directors are elected by a plurality of the votes cast in both contested elections (elections in which the number of nominees is greater than the number of Board seats open for election) and uncontested elections (elections in which the number of nominees does not exceed the number of Board seats open for election). However, for uncontested elections of directors, our Board of Directors has adopted a director resignation policy. In accordance with this policy, the Board of Directors will nominate for election or re-election only candidates who agree to tender, immediately following the annual meeting at which such candidate is a nominee for election/re-election, an irrevocable offer of resignation that will take effect if, in an uncontested election of directors, the nominee receives a greater number of votes “withheld” from his or her election than votes “for” his or her election. The offer of resignation is understood to be conditional upon acceptance by the Board of Directors, following consideration of the offer by the Board and the Governance and Nominating Committee.

Where a nominee fails to receive the required number of votes for re-election and the resignation offer takes effect, the Governance and Nominating Committee must promptly consider the offer and recommend to the Board of Directors whether to accept or reject it. The Board of Directors then must, within 90 days following certification of the stockholder vote, act on the Governance and Nominating Committee’s recommendation and disclose in a filing with the SEC or in a widely disseminated press release the Board’s action and reasons for taking that action.

The Board of Directors may consider any factors or information it deems relevant. In addition, the Governance and Nominating Committee and the Board of Directors may consider a range of alternatives in determining what action to take, including but not limited to: (i) accepting the resignation; (ii) rejecting the resignation, including with conditions for the director’s continued service; (iii) rejecting the resignation to allow the director to remain on the Board of Directors but agreeing that the director will not be nominated for re-election upon expiration of the director’s term; or (iv) deferring acceptance of the director’s resignation until the Board of Directors can find a replacement director with the necessary qualifications to fill the vacancy that accepting the resignation would create.

Expectations for Members of our Board of Directors

Service on Other Boards

The Company values the experience that our directors bring from other boards on which they serve and recognizes that those boards may also present demands on a director’s time and availability and may present conflicts or legal issues. Thus, we have adopted a policy regarding directors’ service on other boards.

Service on public company boards. Under our policy, no director of this Company may simultaneously serve as a director of more than four public companies (including the Company), and any director who is a named executive officer of a public company may not serve simultaneously as a director of more than two public companies (including the Company). Additionally, no member of the Board of Directors may become a director on any other public company board without discussing it with the Chairman of the Board of Directors and receiving the prior approval of the Governance and Nominating Committee.

Service on private company or non-profit boards. Our policy provides that no member of the Board of Directors may (i) become a member of the board of any private or non-profit company with which the Company has any substantial relationship or (ii) accept any affiliation with any other business or governmental unit with which the Company has any substantial relationship, in the case of either clause (i) or clause (ii), without discussing it with the Chairman of the Board of Directors and receiving the prior approval of the Chair of the Governance and Nominating Committee or the subsequent ratification of the Governance and Nominating Committee.

Attendance at Annual Meetings of Stockholders

It is our policy that, to the extent reasonably practicable, directors should attend our annual meetings of stockholders. All of our directors who were serving on our Board at the time of our 2021 Annual Meeting of Stockholders attended that meeting.

Attendance at Board and Committee Meetings

The Board takes seriously the attendance of directors at meetings of the Board and committees of which they are members. Directors are expected to attend Board and committee meetings on which they serve, and to meet as

 

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frequently as necessary in order to properly discharge their responsibilities. The Board also expects that directors will dedicate sufficient time and attention to enable diligent performance of their duties and will interact with each other outside of formal Board and committee meetings to encourage open and inspired discussion. During fiscal 2022, our Board of Directors held four meetings. Additionally, in accordance with the corporate governance standards of the Nasdaq Stock Market, our independent directors are expected to meet without management present at least twice per year. During fiscal 2022, the independent directors held four meetings without management present.

Each director attended 100% of the combined number of meetings of the Board of Directors, including, as applicable, meetings of the independent directors and meetings of committees on which he or she served, during the period in fiscal 2022 in which he or she served as a director or member of such committee, as applicable.

Committees of the Board of Directors

The Board has established various committees to assist it with the performance of its responsibilities. The Board designates the members of these committees and the committee chairs based on the recommendations of the Governance and Nominating Committee. The chair of each committee develops the agenda for its committee meetings, and each committee regularly provides a full report to the Board.

The following table identifies the current members of our Board serving on each of the committees of the Board.

 

DIRECTOR

INDEPENDENT

AUDIT COMMITTEE(1)

COMPENSATION COMMITTEE(2)

GOVERNANCE AND NOMINATING COMMITTEE(3)

RISK AND COMPLIANCE COMMITTEE

Michael R. Minogue, Chairman, President & Chief Executive Officer

Paula A. Johnson

✓

Dorothy E. Puhy, Lead Director

✓

Jeannine M. Rivet

✓

Myron L. Rolle

✓

Eric A. Rose

✓

Martin P. Sutter

✓

Paul G. Thomas

✓

Christopher D. Van Gorder

✓

 

		Member
		Chairperson

 

(1)

Each member of the Audit Committee is an independent director within the meaning of the applicable rules and regulations of the SEC and the Nasdaq Stock Market, including the enhanced independence requirements applicable to members of audit committees. The Board has determined that each member of the Audit Committee is able to read and understand fundamental financial statements, including a balance sheet, income statement and cash flow statement. In addition, the Board of Directors determined that Ms. Puhy, who serves as Chair of the Audit Committee, qualifies as an “audit committee financial expert” within the meaning of the applicable SEC rules and regulations, and as a financially sophisticated audit committee member within the meaning of the Nasdaq Stock Market rules.

(2)

Each member of the Compensation Committee is an independent director within the meaning of the applicable Nasdaq Stock Market rules, including the enhanced independence requirements applicable to members of compensation committees, and a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act.

(3)

Dr. W. Gerald Austen has served as Director Emeritus of the Company since August 2016 and participates in meetings of the Governance and Nominating Committee in a non-voting capacity. Prior to serving as Director Emeritus, Dr. Austen served on the Company’s Board of Directors for 31 years.

 

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The Board has adopted written charters for each of the Audit, Compensation, Governance and Nominating and Risk and Compliance Committees. These charters are available in the Investor Information section on the Company’s website at www.abiomed.com. The following table summarizes the primary responsibilities of the committees pursuant to each committee’s charter.

 

AUDIT COMMITTEE
Meetings held in fiscal 2022: 6		The Audit Committee is responsible for:   •   oversight of the quality and integrity of our financial statements; •   the appointment, retention, compensation and review of qualifications and independence of, as well as oversight of performance of, our independent registered public accounting firm, including the pre-approval of audit and non-audit services; •   oversight of compliance with legal and regulatory requirements; •   oversight of the performance of our internal audit function and accounting controls; •   the scope of our annual audit; •   the receipt and review of the response by management to any management letter or report from the independent accountants; •   oversight of our financial reporting process and systems of internal accounting and financial controls (including their adequacy and effectiveness); •   reviewing all related party transactions; •   establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters; and •   other items, including the assessment, monitoring and control of certain financial, legal and other risks, including cybersecurity risks.   The Audit Committee is also responsible for review and approval of any related party transactions required to be disclosed pursuant to Item 404(a) of Regulation S-K. The responsibilities and activities of the Audit Committee are further described in “Report of the Audit Committee” and the Audit Committee charter.

 

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COMPENSATION COMMITTEE
Meetings held in fiscal 2022: 4		The Compensation Committee is responsible for:   •   reviewing our compensation philosophy and annually reviewing our executive compensation program; •   establishing the compensation for our Chairman, President and Chief Executive Officer and approving the compensation of our executive officers (which is a broader group than our “named executive officers”); •   evaluating the annual performance of our Chairman, President and Chief Executive Officer and other executive officers; •   approving grants of equity awards, including stock options, RSUs and performance stock units (“PSUs”), to executive officers (except for where authority for grants to employees who are not considered “executive officers” under Section 16 of the Exchange Act is delegated to the Special Stock Award Committee, a non-Board executive committee); •   reviewing and recommending to the Board of Directors the compensation for our directors; •   engaging in risk assessments of the Company’s compensation programs; •   adopting rules and making other determinations with respect to the administration of our equity incentive plans, employee stock purchase plan and 401(k) plan; •   overseeing compliance with SEC rules and regulations regarding stockholder approval of executive compensation matters; and •   approving the “Compensation Discussion and Analysis” in accordance with applicable rules of the SEC.   The Compensation Committee is authorized to retain and terminate compensation consultants, legal counsel or other advisors to the committee and to approve the engagement of any such consultant, counsel or advisors, to the extent it deems necessary after specifically analyzing the independence of any such consultant retained by the committee.   Our Lead Director, Ms. Puhy, participates in meetings of the Compensation Committee as described above under “Board Leadership—Our Current Board Leadership Structure.”   Our compensation governance, including the roles of the Compensation Committee, the independent compensation consultant and management, is described on pages 45 to 47 of this Proxy Statement under the heading “Compensation Governance.”

 

GOVERNANCE AND NOMINATING COMMITTEE
Meetings held in fiscal 2022: 4		The Governance and Nominating Committee is responsible for:   •   developing policies and procedures relating to the consideration of director candidates proposed by stockholders; •   identifying qualified individual candidates to serve as directors on the Board; •   periodically reviewing and making recommendations to the Board regarding the size, structure and functions of it and its committees; •   determining the selection criteria for new directors and recommending new director nominees in accordance with those selection criteria; •   reviewing and recommending acceptance of director resignations; •   reviewing and monitoring the succession plan for the Chairman, President and Chief Executive Officer and assuring that the Chairman, President and Chief Executive Officer has developed succession plans for the executive officers of the Company; •   developing and conducting procedures with respect to the annual evaluation of the performance of the Board, its committees and each director; •   assisting the Board and management in overseeing ESG initiatives; and •   developing and recommending corporate governance policies and procedures appropriate to the Company.

 

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RISK AND COMPLIANCE COMMITTEE
Meetings held in fiscal 2022: 4		The Risk and Compliance Committee, formerly known as the Regulatory and Compliance Committee, is responsible for:   •   assisting the Board of Directors with the oversight of the Company’s risk management, compliance and control activities, including the Company’s risk profile and significant healthcare-related regulatory and compliance issues (such as healthcare fraud and abuse laws, the U.S. Federal Food, Drug and Cosmetic Act, the U.S Health Insurance Portability and Accountability Act and equivalent foreign laws of the jurisdictions where we market and/or sell our products), by evaluating and monitoring the Company’s compliance policies, standards, procedures, systems and initiatives; •   providing reports and recommendations to the Board of Directors regarding the Company’s compliance with applicable laws and regulations, as well as the adequacy of its compliance program; •   approving and monitoring the Company’s Enterprise Risk Management Program; •   reviewing and overseeing implementation of the Company’s Healthcare Compliance Program and Work Plan; •   establishing a management-level compliance committee, appointing the Chief Compliance Officer and approving all key decisions relating to such officer’s appointment, discipline and termination; and •   reviewing and discussing risk- and compliance-related reports prepared and/or received by the Chief Compliance Officer and any management-level compliance committee.   In fulfilling its responsibilities, the Risk and Compliance Committee may retain independent counsel, experts and consultants as it deems necessary to fulfill its duties. In addition, the Risk and Compliance Committee may, in its discretion, conduct or require management to conduct audits, investigations and other reviews relating to the compliance, regulatory or legal risks inherent to the Company’s business.

Board and Committee Evaluations

The Governance and Nominating Committee evaluates each director and his or her assessment of the effectiveness of the Board and each committee of the Board on which he or she serves. Questionnaires are circulated annually for the full Board and for each of the four committees of the Board. The purpose of these assessments is to identify opportunities for improvement on a number of relevant metrics, including those listed below. The Chair of the Governance and Nominating Committee, with the assistance of management, conducts the evaluation through these questionnaires, reviews all of the responses and reports the results to the Governance and Nominating Committee. The Governance and Nominating Committee then summarizes the evaluations and identifies areas in which the Board and its committees could improve their performance and/or composition, and discusses its findings with the Board and each of the other committees.

 

 

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Engagement with Stockholders

Our Board and management value the perspectives of our stockholders and work to provide our stockholders with meaningful engagement. Our Chairman, President and Chief Executive Officer and our Chief Financial Officer have made communication with our stockholders and analysts a priority, and the Board receives relevant feedback from stockholders directly and promptly.

We regularly attend investor conferences and hold one-on-one meetings with stockholders and potential investors throughout the United States as well as overseas. In addition, we have telephonic meetings with stockholders and analysts and review correspondence submitted by stockholders to management and/or the Board. We continued to leverage virtual platforms and successfully transitioned back to in-person events as part our investor communications strategy and initiatives in fiscal 2022. As part of our outreach in fiscal 2022, we hosted an investor call on Impella ECP, which was attended by over 100 external participants. The event included presentations from circulatory support leader, Dr. Amir Kaki, interventional cardiologist and director of mechanical circulatory support at Ascension St. John Hospital in Detroit and ABIOMED’s Executive Vice President and Chief Medical Officer, Dr. Charles Simonton. The presentations provided an overview of Impella ECP technology, the FDA Pivotal Trial and several case reviews.

In fiscal 2022, we estimate that our outreach efforts resulted in dialogue with stockholders who own approximately 63% of our outstanding shares, including approximately 70% of our top 20 stockholders. During these interactions, stockholders most frequently raised topics concerning the impact of, and trends relating to, the COVID-19 pandemic, existing and future products, like the Impella 5.5, Impella ECP, Impella BTR and preCARDIA, robust randomized control trials, including PROTECT IV and STEMI DTU and our strategic investment initiatives. In addition, following engagement with our stockholders, we amended our bylaws to provide for proxy access, which enables eligible stockholders to include their nominees for election as directors in our proxy statements. See “Stockholder Proposals for 2023” below for additional details. For more information about our stockholder outreach efforts specifically related to our executive compensation program, see “Compensation Discussion and Analysis—Views of Our Stockholders.” In fiscal 2023, we reached out to our top 30 stockholders, representing 75% of our outstanding shares, through Morrow Sodali LLC, our proxy solicitor. We engaged with those stockholders who accepted our invitation in advance of the filing of this Proxy Statement.

Board Role in Risk Oversight

The Company is exposed to various risks, including, but not limited to, strategic, operational, financial, liquidity and reputational risks. There are additional risks relating to reporting, pending and threatened product liability and intellectual property litigation, and regulatory and legal compliance. The Company’s enterprise risk profile is also affected by the success of our clinical trials, the actions of distributors of our products, the availability of third-party reimbursement for our products and changes in government regulation or in our receipt/maintenance of required regulatory approvals.

Our Board of Directors, as a whole, has responsibility for risk oversight, with reviews of certain areas conducted by the relevant Board committees that report on their deliberations to the Board of Directors. The oversight responsibility of the Board of Directors and its committees is supported by management reporting to the Board of Directors about the identification, assessment and management of critical risks and management’s risk mitigation strategies. In particular, the Company’s Chief Financial Officer, at the direction of the Chairman, President and Chief Executive Officer, is responsible for overseeing the Company’s enterprise risk management program and periodically reports enterprise risk information to each of the Chairman, President and Chief Executive Officer, the Audit Committee and the Board of Directors. In fulfilling his risk management responsibilities, the Chief Financial Officer works closely with members of the senior management team, including the Company’s Chief Operating Officer, General Counsel and Secretary, and Corporate Controller.

 

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While our Board is ultimately responsible for risk oversight, its committees critically assist the Board in fulfilling its monitoring responsibilities in certain areas of risk. The Risk and Compliance Committee reviews the Company’s risk-related policies, procedures and programs and coordinates the handling of such matters with the Chief Compliance Officer. The Company’s Chief Financial Officer meets with the Risk and Compliance Committee from time to time to discuss the specific enterprise risks facing the Company. Additionally, at certain Board of Directors meetings, the Chairman, President and Chief Executive Officer and/or Chief Financial Officer report information about major risks facing the Company.

 

Environmental, Social and Governance Initiatives

Currently, our Board and management have oversight responsibility for our ESG strategy and coordinate with our Governance and Nominating Committee to implement initiatives aimed at improving our sustainability footprint and continuing to provide for a strong corporate governance framework. Our ESG Report affirms four core principles that comprise our comprehensive ESG program philosophy: (1) recovering hearts and saving lives; (2) growing stockholder value; (3) leading in technology and innovation; and (4) sustaining a winning culture that prioritizes the health of our patients and needs of our customers.

 

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Our ESG Report, which is available in the Investor Information section of our website at www.abiomed.com, highlights the ways we have implemented these core principles in three key areas:

 

People and Communities		•   fostering inclusive, fair and equal employment, including through our internal working groups, such as the ABIOMED Women’s Network, the Diversity in Healthcare Advisory Board and the Diversity Working Group;   •   providing educational resources to our employees through our online learning platform;   •   recognizing our employees for their contributions through awards and recognition programs and fostering a sense of community though Company activities;   •   supporting our employees who are victims of a natural or civil disaster through our nonprofit, the ABIOMED Charitable Foundation;   •   dedicating efforts to collaborate with global and local non-profit organizations, including through our Diversity in Healthcare Advisory Board, our support for U.S. military veterans and our work with the Inner City Scholarship Fund and the North Shore YMCA;
Environment, Health and Safety (“EHS”)		•   enforcing product safety procedures for our research, production and manufacturing facilities in line with International Organization of Standardization and Authorized Economic Operator standards;   •   instituting quality evaluations of new and existing suppliers to work to improve sustainable sourcing;   •   requiring ongoing EHS training programs and education for employees and contractors;
Integrity, Compliance and Governance		•   meeting our ethical obligations to our employees, healthcare professionals, suppliers and business partners by ensuring Company-wide compliance with our Code of Conduct;   •   strengthening our risk compliance systems, including through the reallocation of risk oversight responsibilities to the Risk and Compliance Committee;   •   ensuring our Board of Directors reflects a diversity of backgrounds, areas of expertise, ages, races/ethnicities and genders;   •   providing employees with education and training on their legal and ethical obligations; and   •   considering Board refreshment on an ongoing basis.

Codes of Conduct

All of our directors, officers and employees are expected to act ethically, legally and with integrity at all times and are obligated to comply with our U.S. Code of Conduct, our Code of Conduct and Compliance Policy – Europe or our Code of Business Conduct and Ethics – Japan, as applicable, as well as our other policies and standards of conduct. The U.S. Code of Conduct constitutes a “code of ethics” under the applicable rules of the SEC. A copy of our U.S. Code of Conduct is available in the Investor Information section of our website at www.abiomed.com, and may also be obtained, without charge, by submitting a written request to our General Counsel at ABIOMED, Inc., 22 Cherry Hill Drive, Danvers, Massachusetts 01923. We intend to disclose any future amendments to, or waivers from, the U.S. Code of Conduct within four business days of the waiver or amendment through a website posting to the extent required by the rules and regulations of the SEC.

Stockholder Communications with Directors

Stockholders may send communications to the directors on our Board. Those interested in communicating with one member of the Board of Directors or a group of such members, including the Lead Director of the Board, the Governance and Nominating Committee, the Compensation Committee, the Risk and Compliance Committee, the

 

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non-employee directors as a group or the Audit Committee, should address their written correspondence in care of the Executive Vice President, General Counsel and Secretary at ABIOMED, Inc., 22 Cherry Hill Drive, Danvers, Massachusetts 01923 and specify in the correspondence to whom on the Board of Directors the correspondence is directed. Complaints or concerns relating to our financial reporting, accounting, internal accounting controls or auditing will be referred to the Chair of our Audit Committee. Correspondence will then be directed to the group of directors, or to an individual director, as appropriate.

Compensation of Directors

The Compensation Committee, with input from its independent compensation consultant, periodically reviews and evaluates director compensation and makes recommendations to the Board. Our Board reviews director compensation periodically to maintain a competitive director compensation package that enables us to recruit and retain qualified directors.

Non-Employee Director Compensation

Director Compensation Program

The following conveys compensation paid to our non-employee directors for fiscal 2022:

 

NON-EMPLOYEE DIRECTOR COMPENSATION
		Form of Compensation*				Amount of Compensation
Annual retainer (all non-employee directors)			Cash or common stock			$50,000
Annual stock retainer (all non-employee directors)			Time-vesting RSUs (vesting on earlier of (i) first anniversary of grant or (ii) annual meeting of stockholders post- grant)			$200,000 in grant date fair value
Lead Director			Cash or common stock			$25,000
Chair of Audit Committee			Cash or common stock			$20,000
Chair of Compensation Committee			Cash or common stock			$15,000
Chair of Governance and Nominating Committee			Cash or common stock			$10,000
Chair of Risk and Compliance Committee			Cash or common stock			$10,000
Members of Audit Committee			Cash or common stock			$10,000
Members of Compensation Committee			Cash or common stock			$7,500
Members of Governance and Nominating Committee			Cash or common stock			$5,000
Members of Risk and Compliance Committee			Cash or common stock			$5,000
Equity grant upon initial appointment			Time-vesting RSUs (vesting ratably over three years on each anniversary of grant)			$250,000 in grant date fair value

*

Where “cash or common stock” is shown, director may choose between either alternative.

In addition, we provide reimbursement to our non-employee directors for their reasonable expenses related to their service as a member of the Board of Directors and any committees thereof.

We also have a non-employee director retirement policy that provides for the accelerated vesting of all stock options, RSUs and other equity awards held by a non-employee director if he or she permanently ceases his or her service on our Board of Directors by reason of death, disability or retirement following at least five years of service and so long as his or her age plus years of service equals or exceeds 65.

 

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Dr. W. Gerald Austen, Director Emeritus of the Company since 2016, receives an annual cash retainer equal to the retainer received by other non-employee directors for his service as Director Emeritus, and an additional annual retainer of $5,000 for his non-voting participation in meetings of the Governance and Nominating Committee, as described above in footnote 3 to the table identifying Board members’ committee participation on page 24. In addition, Dr. Austen is eligible for equity grants on the same basis as non-employee directors. In connection with Dr. Austen’s transition to Director Emeritus, his equity awards that were outstanding and unvested as of the expiration of his term as a director on August 10, 2016 continue to remain outstanding and eligible to vest according to their terms so long as Dr. Austen continues to serve as Director Emeritus of the Company. Dr. Austen is the Edward D. Churchill Distinguished Professor of Surgery at Harvard Medical School, Surgeon-in-Chief-Emeritus at Massachusetts General Hospital and Chairman of the Massachusetts General Hospital Chiefs’ Council.

Director Compensation

The following table provides information regarding the compensation earned by our non-employee directors with respect to the fiscal year ended March 31, 2022. The compensation of our Chairman, President and Chief Executive Officer is reported below under the heading “Executive Compensation.”

Compensation of Non-Employee Directors for the Year Ended March 31, 2022

 

Name		Fees Earned or     Paid in Cash ($)					Stock Awards     ($)(3)					Total ($)
W. Gerald Austen(1)			$	55,000				$	199,300				$	254,300
Paula A. Johnson(2)			$	50,932				$	448,959				$	499,891
Dorothy E. Puhy			$	100,000				$	199,300				$	299,300
Jeannine M. Rivet			$	67,500				$	199,300				$	266,800
Myron L. Rolle			$	60,000				$	199,300				$	259,300
Eric A. Rose			$	60,000				$	199,300				$	259,300
Martin P. Sutter			$	67,500				$	199,300				$	266,800
Paul G. Thomas			$	70,000				$	199,300				$	269,300
Christopher D. Van Gorder			$	65,000				$	199,300				$	264,300

(1)

Dr. Austen serves as Director Emeritus.

(2)

Dr. Johnson’s cash fees were prorated for her period of service, as she joined the Board of Directors on April 26, 2021.

(3)

Amounts shown represent the aggregate grant date fair value of 625 RSUs to each non-employee director on August 11, 2021, other than Dr. Johnson, who received two separate grants of RSUs in fiscal 2022. For Dr. Johnson, the amount represents the aggregate grant date fair value of 717 RSUs in connection with her appointment and 625 RSUs in connection with annual grants to each Board member. All RSU grants were made under the Second Amended and Restated 2015 Omnibus Incentive Plan (the “2015 Plan”). In each case, amounts were computed in accordance with FASB ASC Topic 718, based on the fair market value of the underlying stock on the grant date. Please refer to Note 14 of our consolidated financial statements in our annual report on Form 10-K for the year ended March 31, 2022 (the “2022 Annual Report”), as filed with the SEC, for further discussion related to the assumptions used in our valuation.

The following table provides a summary of the aggregate number of unvested RSUs outstanding for each of the above non-employee directors as of March 31, 2022.

 

Name		Unvested RSUs      Outstanding
W. Gerald Austen(1)				625
Paula A. Johnson				1,342
Dorothy E. Puhy				625
Jeannine M. Rivet				625
Myron L. Rolle				1,151
Eric A. Rose				625
Martin P. Sutter				625
Paul G. Thomas				625
Christopher D. Van Gorder				625

(1)

Dr. Austen serves as Director Emeritus.

 

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Director Stock Ownership Guidelines

We have stock ownership guidelines that require each director to beneficially own shares of our common stock (including common stock held in trust or by certain family members and stock underlying unvested RSUs or restricted stock awards) with the equivalent value, as of the acquisition date, of at least five times the aggregate annual cash retainer for a director. Each director is required to achieve such stock ownership requirements by the date of the fifth anniversary of such director’s appointment. Until the required ownership level is reached, directors are required to retain at least 50% of the shares, net of applicable tax withholding and the payment of any exercise or purchase price (if applicable), received upon the vesting or settlement of equity awards or the exercise of stock options. As of March 31, 2022, all of our directors then serving had met the stock ownership requirement or were within the five-year grace period for compliance.

 

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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Our Compensation Committee consists of Paul G. Thomas (Chair), Jeannine M. Rivet and Martin P. Sutter. No member of our Compensation Committee is a former or current officer or employee of the Company. Our Lead Director, Dorothy E. Puhy, participates in meetings of the Compensation Committee as described above under “The Board of Directors and Certain Governance Matters—Lead Director.” Mr. Minogue, while not a member of the Compensation Committee, makes recommendations to the Compensation Committee regarding the compensation of executive officers other than himself and participates in the Compensation Committee’s deliberations when invited, but does not vote on such matters. Mr. Minogue was not present for executive sessions or for any discussion of his own compensation. None of our executive officers currently serves, or has served during fiscal 2022, as a member of the board of directors or compensation committee (or other committee serving an equivalent function) of any entity that has one or more executive officers serving as members of our Board of Directors or Compensation Committee.

The Compensation Committee has engaged Willis Towers Watson as its independent compensation consultant to support the Compensation Committee in performing its duties and to provide analysis and make recommendations to the Compensation Committee regarding its compensation program.

For more information, see “Compensation of Executive Officers—Compensation Governance.”

 

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COMPENSATION OF EXECUTIVE OFFICERS

Compensation Discussion and Analysis

Overview

This Compensation Discussion and Analysis (“CD&A”) describes the compensation philosophy, policies and practices associated with our executive compensation program for fiscal 2022 and the context in which compensation-related decisions were made in relation to fiscal 2022 for the “named executive officers” listed below. It also briefly outlines certain aspects of our executive compensation program for fiscal 2023.

Our Named Executive Officers in Fiscal 2022

The following individuals were named executive officers (also referred to as “NEOs”) for our fiscal year ended March 31, 2022 (“fiscal 2022”):

 

Named Executive Officer		Title
Michael R. Minogue		Chairman, President and Chief Executive Officer
Todd A. Trapp(1)		Executive Vice President and Chief Financial Officer
Andrew J. Greenfield(1)		Executive Vice President and Chief Commercial Officer
David M. Weber(2)		Former Senior Vice President and Chief Operating Officer
Marc A. Began(1)		Executive Vice President, General Counsel and Secretary

(1)

Messrs. Trapp, Greenfield and Began each became an Executive Vice President effective April 1, 2022.

(2)

Dr. Weber retired as an executive officer effective March 31, 2022, at the end of our fiscal year.

Executive Summary

Our Business, Putting Patients First

We are a provider of medical devices that provide circulatory support and oxygenation. We develop, manufacture and market proprietary products that are designed to enable the heart to rest and recover by improving blood flow and/or performing the pumping function of the heart and provide sufficient oxygenation to those in respiratory failure. Our products are used in the cardiac catheterization lab, or cath lab, by interventional cardiologists and in the heart surgery suite by cardiac surgeons for patients who are in need of hemodynamic support prophylactically or emergently before, during or after angioplasty or heart surgery procedures. We believe that heart recovery is the optimal clinical outcome for a patient experiencing heart failure because it enhances the potential for the patient to go home with their own heart, facilitating the restoration of quality of life. In addition, we believe that, for the care of such patients, heart recovery is often the most cost-effective solution for the healthcare system.

Performance Highlights

Financial Performance – ABIOMED’s disciplined financial approach and execution has allowed the Company to achieve substantial year-over-year increases consistently in key financial metrics, including total revenue, income from operations and cash. The Company was able to achieve strong financial metrics while significantly increasing investments in growth initiatives focused on innovation, advancing Impella clinical evidence and establishing a premiere distribution team. In fiscal 2022, the Company delivered double-digit revenue growth each quarter and set global revenue records in three out of four quarters, despite the ongoing macro headwinds, by executing the ABIOMED 2.0 playbook.

 

•

Revenue increased to $1.032 billion in fiscal 2022, growing 22% over fiscal 2021, during which time the Company also saw year-over-year growth of 1% despite the impact of the global pandemic. Revenue growth for fiscal 2022 was at the 82nd percentile among the companies in our compensation peer group (as listed below under “Compensation Peer Group” and referred to in this Proxy Statement as our “Peer Group”).

 

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•

During fiscal 2022 the Company invested a record $163 million in research and development, an increase of 34% compared to the same period of the prior fiscal year, while delivering non-GAAP income from operations of $257 million or 24.9% non-GAAP operating margin.(1)

 

•

At the end of fiscal year 2022, cash and marketable securities was $979 million, an increase of 15% over fiscal 2021; the Company maintains zero debt and takes a disciplined approach to capital deployment in order to drive long-term sustainable growth.

The below graphs show the Company’s key financial results for fiscal 2022, including growth over the past five years, as a supplement to the presentation against fiscal 2021 above. Over the past five years, the Company has ranked in the top 10 of its Peer Group for annual revenue growth and in the top three in operating margin percentage each year. The Company consistently remains one of the fastest-growing, most profitable companies among its peers.

 

(1)

The Company’s fiscal 2022 income from operations was $141 million as determined in accordance with GAAP; fiscal 2022 non-GAAP income from operations was $257 million. The Company’s fiscal 2022 operating margin was 13.6% as determined in accordance with GAAP; non-GAAP operating margin was 24.9%. The Company defines non-GAAP income from operations and non-GAAP operating margin as income from operations and operating margin determined in accordance with GAAP, excluding charges for the acquired in-process research and development related to the preCARDIA acquisition. For a reconciliation of these non-GAAP measures to the corresponding GAAP measures, please see Appendix A: Non-GAAP Financial Information.

 

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Revenue*		R&D Investment*

 

Non-GAAP Income from Operations*†		Cash*‡

 

*

Dollar values in each chart above are in millions.

†

The Company’s fiscal 2022 income from operations was $141 million as determined in accordance with GAAP; fiscal 2022 non-GAAP income from operations was $257 million. The Company’s fiscal 2022 operating margin was 13.6% as determined in accordance with GAAP; non-GAAP operating margin was 24.9%. The Company defines non-GAAP income from operations and non-GAAP operating margin as income from operations and operating margin determined in accordance with GAAP, excluding charges for the acquired in-process research and development related to the preCARDIA acquisition. For a reconciliation of these non-GAAP measures to the corresponding GAAP measures, please see Appendix A: Non-GAAP Financial Information.

‡

Cash represents cash, cash equivalents and short- and long-term marketable securities.

 

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Performance Compared to Select Medical Technology Businesses – The Compensation Committee and our leadership team also review the Company’s performance on two-year revenue growth against select medical technology businesses which have products that are utilized in the cardiovascular market and operating margin at the overall company level for those businesses. Most of the companies and their cardio- and vascular-related product lines or segments are not comparable to our size or the nature of our business and, with the exception of Edwards Lifesciences Corporation and LivaNova PLC, are not in our compensation Peer Group. The chart below shows the Company’s financial performance compared to these select medical technology businesses, as further described in footnote (1) below.

Performance Compared to

Select Medical Technology Businesses⁽¹⁾

 

 

(1)

The chart compares ABIOMED performance to select medical technology businesses which have products that are utilized in the cardiovascular market. Two-year revenue growth and fiscal 2022 revenue for those businesses are each determined based on information reported in SEC filings on Form 10-Q for the cardio- and vascular-related product lines or segments of Abbott Laboratories (ABT), Cardiovascular Systems, Inc. (CSII), Edwards Lifesciences Corporation (EW) and LivaNova PLC (LIVN) (the “Select Medical Technology Companies”). Fiscal 2022 operating margin is determined based on company-level information reported in SEC filings on Form 10-Q of the Select Medical Technology Companies. Fiscal 2022 operating margin was not determined at the level of the specific cardio- and vascular-related product lines or segments because such information is not reported in the SEC filings of the Select Medical Technology Companies.

 

(2)

The Y axis of the chart represents two-year revenue growth, comparing revenue for the twelve months ended March 31, 2020 to the twelve months ended March 31, 2022. The size of the circles represents revenue for the cardio- and vascular-related product lines or segments of the Select Medical Technology Companies, as reported in SEC filings on Form 10-Q as described above in footnote (1), and ABIOMED for the twelve months ended March 31, 2022.

 

(3)

The X axis of the chart represents operating margin of the Select Medical Technology Companies, as reported in SEC filings on Form 10-Q as described above in footnote (1), and ABIOMED for the twelve-months ended March 31, 2022. Operating margin at the level of the specific cardio- and vascular-related product lines or segments of the Select Medical Technology Companies is not shown because information to determine operating margin at the level of the specific cardio- and vascular-related product lines or segments is not reported in the SEC filings of the Select Medical Technology Companies. ABIOMED’s fiscal 2022 operating margin was 13.6% as determined in accordance with GAAP. The yellow circle in the chart above represents ABIOMED’s fiscal 2022 non-GAAP operating margin, which was 24.9%. ABIOMED’s fiscal 2022 non-GAAP operating margin excludes charges for the acquired in-process research and development related to the preCARDIA acquisition. For a reconciliation of this non-GAAP measure to the corresponding GAAP measure, please see Appendix A: Non-GAAP Financial Information.

 

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Total Stockholder Return – The Company’s financial and operational execution continues to translate into sustained stock price growth for the benefit of our stockholders. The following chart depicts our total stockholder return (“TSR”) for the one-, two-, five-, 10- and 18-year periods ending March 31, 2022. The Company delivered a return for stockholders in fiscal 2022, despite the global market challenges from COVID-19. The Company’s fiscal 2022 TSR was 4%, which was above the average TSR for companies in our compensation Peer Group. The Company’s 10-year TSR of 1,393% was more than two times that of the Peer Group average and more than six times that of the S&P 500.

Total Stockholder Return

 

 

 

 

*	Graphs not to scale

Business Achievements – Other key performance milestones in fiscal 2022 included:

 

Innovation Milestones		✓  ABIOMED completed the FDA Early Feasibility Study for Impella ECP and received IDE approval from the FDA for the Single Arm Pivotal Trial. Impella ECP is the smallest heart pump in the world and the first to be compatible with small bore access and closure techniques. It measures 9 French in diameter upon insertion and removal from the body. While in the heart, it expands to support the heart’s pumping function, providing flow greater than 3.5 L/min.   ✓  ABIOMED continued the full commercial launch of the Impella 5.5 with SmartAssist. Within the fiscal year, the company surpassed the 5,000-patient milestone and grew U.S. Impella 5.5 revenue by 97% year-over-year.   ✓  ABIOMED accelerated the rollout of Impella Connect worldwide. At the end of the fiscal year, the company was in 1,423 hospitals in the U.S. with approximately 92% of patients on support being remotely monitored in the cloud. Outside the U.S., Impella Connect was in 150 hospitals in Europe and 86 hospitals in Japan.   ✓  ABIOMED acquired preCARDIA, developer of a proprietary catheter and controller that will complement ABIOMED’s product portfolio to expand options for patients with acute decompensated heart failure (ADHF). The preCARDIA system is uniquely designed to rapidly treat ADHF-related volume overload by effectively reducing cardiac filling pressures and promoting decongestion to improve overall cardiac and renal function. Annually, more than one million patients are admitted to hospitals in the United States with ADHF and approximately one-third of these patients do not respond to diuretics and could benefit from this minimally invasive breakthrough technology.   ✓  The company continued to strengthen its intellectual property (IP) and surpassed more than 1,400 patents worldwide, with more than 1,400 additional patents pending.
Regulatory Approvals		✓  The United States Food and Drug Administration (FDA) granted breakthrough device designation to the Impella ECP expandable percutaneous heart pump. The designation means the FDA will prioritize Impella ECP’s regulatory review processes, including design iterations, clinical study protocols and pre-market approval (PMA) application.

 

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		✓  Impella 5.5 with SmartAssist received approval from Japan’s Pharmaceuticals and Medical Devices Agency (PMDA) and Hong Kong’s Medical Device Division (MDD). In Japan, Impella 5.5 with SmartAssist is now indicated for use in the treatment of drug-resistant acute heart failure attributable to causes such as cardiogenic shock.   ✓  Impella RP with SmartAssist received FDA PMA as safe and effective to treat acute right heart failure for up to 14 days. Impella RP with SmartAssist is the first single-access temporary percutaneous ventricular support device with dual-sensor technology.   ✓  The 2021 guidelines of the European Society of Cardiology (ESC) for treatment of acute heart failure patients, including patients in cardiogenic shock, raised the recommendation level for short-term mechanical circulatory support systems such as Impella heart pumps from Class IIb (“may be considered”) to Class IIa (“should be considered”). In addition, the authors expand the type of patient who may benefit from technology such as Impella to include patients with mildly reduced left ventricular ejection fraction.
Clinical Outcomes		✓  ABIOMED enrolled the first patient in PROTECT IV, a large, prospective, multi-center randomized controlled trial (RCT) that is designed to provide the level of clinical evidence needed to achieve a Class I guideline recommendation for Impella in high-risk percutaneous coronary intervention (HRPCI).   ✓  Final PROTECT III study results demonstrate improvement in 90-day clinical outcomes, completeness of revascularization and safety, when compared to the PROTECT II Randomized Controlled Trial (RCT). The PROTECT II RCT found, when compared to intra-aortic balloon pump (IABP), Impella use led to a 29% relative risk reduction in MACCE at 90 days. The study authors also note that PROTECT III patients, when compared to patients in PROTECT II, were more complex, with more severe calcification, more rotational atherectomy and more vessels treated, had more complete revascularization, with 78% less hypotension during support (2.2% vs. 10.2%, p=0.0004) and had improved in-hospital safety, with significantly fewer bleeding complications requiring transfusion (1.2% vs. 9.4%, p<0.001). Data from the PROTECT III trial is published in the American Heart Journal.   ✓  Final Restore EF Study results demonstrate the use of contemporary best practices with Impella in high-risk PCI significantly improves left ventricular ejection fraction (LVEF), heart failure symptoms, and anginal symptoms at 90-day follow-up in a wide variety of hospital settings, including rural, urban, community and academic centers. The study of 251 patients at 26 hospitals showed significant improvement in LVEF from baseline to 90-day follow-up (35% to 45% p<0.0001), significant reduction of heart failure symptoms with 76% reduction in New York Heart Association (NYHA) classification III/IV at follow-up (62% to 15% p<0.001) and significant reduction of anginal symptoms with 97% reduction in Canadian Cardiovascular Society (CCS) classification III/IV at follow-up (72% to 2% p<0.0001).   ✓  The National Cardiogenic Shock Initiative (NCSI) Study demonstrates a 71% survival to discharge with greater than 90% native heart recovery when best practices are used, including placement of an Impella heart pump prior to revascularization (PCI). The study evaluated the outcomes of 406 consecutive patients who presented with acute myocardial infarction cardiogenic shock (AMICS) at 80 participating sites throughout the United States. The study shows a protocol-based approach to increasing survival rates in cardiogenic shock is reproducible in both academic and community hospital settings. The goal of the NCSI Study is to increase cardiogenic shock survival, which has historically been approximately 50%, by providing early unloading therapy and allowing the heart to rest prior to PCI, promoting native heart recovery.

 

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Compensation Program Highlights

Our Compensation Philosophy

We have a strong pay-for-performance culture, which has benefited our stockholders over the short, medium and long term. This is evident in the Company’s financial performance as one of the fastest-growing, most GAAP-profitable companies in the MedTech industry, and one of the top-performing stocks over the last decade, compared to each of its Peer Group, the Nasdaq Stock Market and the S&P 500. For more information, see “Executive Summary—Performance Highlights.”

The primary objectives of our executive compensation program include:

 

✓	tying executive compensation to performance objectives and long-term stockholder returns;

✓	attracting, retaining and motivating key executives with compensation that is competitive with that of our Peer Group; and

✓	rewarding superior financial, strategic and operational performance that is achieved in a manner consistent with our corporate goals and team-oriented values.

Fiscal 2022 Compensation: Pay Mix

As part of our pay-for-performance culture, the Company consistently sets aggressive and difficult-to-achieve goals, which the Company believes have led it to historically outperform its Peer Group. We use a mix of different forms of pay when we initially set annual compensation, so as to align management’s incentives strongly with our long-term business goals and stockholder interests. The below summarizes the pay mix of our fiscal 2022 executive compensation program, based on equity amounts granted in fiscal 2022, and annual cash incentive awards actually paid to our named executive officers for the year, and excludes the value of our benefits program.

 

CEO Total Direct                            Compensation                            for Fiscal 2022		Average Other NEO                                  Total Direct                                Compensation                                for Fiscal 2022

 

•

The overall mix was very heavily weighted toward variable, incentive-based cash and stock compensation (for our CEO, 94%, and, on average for our other NEOs, 84%).

 

•

Variable compensation was primarily weighted toward long-term equity incentives, including performance-based PSUs, time-based RSUs and time-vesting stock options.

 

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Views of Our Stockholders

The Compensation Committee is committed to regularly reviewing, assessing and, when appropriate, adjusting the Company’s compensation programs based on feedback from our stockholders, best practices and compensation trends. At our 2021 Annual Meeting of Stockholders, we received support for our executive compensation program by approximately 51% of the votes cast (excluding broker non-votes) for the approval of our annual “say-on-pay” proposal.

In fiscal 2022, in response to stockholder and proxy advisor feedback and with input from our independent compensation consultant on market practices, we made several enhancements reflected in the design of our executive compensation program. Our reforms more closely support our pay-for-performance philosophy and better align long-term stockholder value creation with our business objectives as we mature as a company.

In early fiscal 2023, we reached out to our top 30 stockholders, representing 75% of our outstanding shares, through Morrow Sodali LLC. We engaged with stockholders who accepted our invitation in advance of the filing of this Proxy Statement.

Some of the reforms include the following:

 

WHAT WE HEARD FROM STOCKHOLDERS AND PROXY ADVISORS				WHAT WE DID
One-time awards under temporary strategic plans may not effectively align management incentives with long-term stockholder value.				✓  The COVID-19 recovery awards approved in November 2020 were granted under extraordinary circumstances, and we do not intend to routinely grant awards outside our existing long- and short-term incentive plans going forward.
Multi-year performance periods for PSU awards, rather than one-year periods, with performance hurdles that remain challenging over time, would promote long-term alignment of pay with performance.				✓  We made the following adjustments to the design of PSU awards granted in FY 2022: •  PSUs will be earned over a three-year period following grant, with revenue measured over a one-year performance period and subject to a TSR modifier measured over a three-year performance period. For more on PSU design, see “Fiscal 2022 Long-Term Incentive Awards.” •  TSR will be measured relative to our Peer Group.
Provide additional clarity on company performance metrics.				✓  We enhanced disclosure around performance metrics in this Proxy Statement. See “Fiscal 2022 Annual Incentive Plan.”

 

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Fiscal 2022 Compensation Program

Fiscal 2022 Compensation Design

Consistent with past reforms made to our executive pay program, and considering our strategic plans for growth and expansion, our corporate performance and individual performance, market data and the input of our external advisors, we designed our NEOs’ fiscal 2022 compensation to include the following features:

 

Key Overall Features of Our Executive Compensation

The key features of our executive compensation program are summarized below.

 

Things we do		Things we don’t do
✓  Pay a significant majority of executive compensation in the form of long-term incentive-based awards, with the largest portion in performance-based awards   ✓  Cap the maximum payout under our annual incentive plan and vesting of our performance-based PSUs   ✓   Set challenging targets and performance metrics for our annual cash incentive awards and PSUs, sometimes leading to lower or no payouts, as in fiscal 2020   ✓   Grant annual PSU awards with three-year performance periods   ✓  Grant RSU, PSU and option awards to NEOs with double-trigger vesting conditions upon a change in control, except under legacy agreements   ✓  Maintain a formal clawback policy for cash- and equity-based incentive programs   ✓   Require NEOs to adhere to robust stock ownership guidelines   ✓ Conduct an annual risk assessment of our compensation programs   ✓  Engage an independent consultant to provide support and advice to the Compensation Committee		×   Provide executive perquisites   ×   Allow our executive officers, directors or employees to hedge or pledge our stock (without exception)   ×   Provide new tax gross-ups   ×   Re-price underwater options   ×   Pay guaranteed bonuses   ×   Encourage excessive risk-taking   ×   Pay dividends or dividend equivalents on unearned PSUs   ×   Guarantee equity incentive awards for our NEOs

 

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Continued Reforms in Fiscal 2023 Compensation

Considering our strategic plans for growth and expansion, our corporate performance and individual performance, market data and the input of our external advisors, and consistent with reforms made to our executive pay program in the past few years, we designed our NEOs’ fiscal 2023 compensation to include the following features:

 

✓   PSUs continue to make up 50% of our NEOs’ long-term equity incentive mix   ✓   Annual PSU grants continue to have three-year performance periods and challenging and diverse goals •   Annual PSU grants will vest after a three-year period. •   Challenging product milestones and revenue growth metrics, which were selected for their ability to withstand market volatility, for their alignment with the Company’s goal setting and for their simplicity of design.

Compensation Elements

 

 

We aim to deliver levels of total compensation that advance our overarching pay-for-performance philosophy, while remaining market competitive. To that end, the compensation of our named executive officers in fiscal 2022 consisted of base salary, annual cash incentive awards, the grant of “at-risk” equity incentives and participation in benefit plans generally available to all employees. The largest component of our named executive officers’ annual compensation program is equity incentives, followed by, depending on the individual, cash-based incentive compensation or base salary.

As demonstrated by the ring charts in “Executive Summary,” the vast majority of fiscal 2022 compensation for our NEOs was variable and incentive-based: 94% for our Chairman, President and Chief Executive Officer, and, on average for our other NEOs, 84%. Also, 70% of our NEOs’ fiscal 2022 equity grants were performance-based, consisting of 50% performance-based PSUs and 20% time-vesting stock options. We believe this practice is consistent with our philosophy of tying executive compensation to performance, while also rewarding our named executive officers for exceeding expectations.

 

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The following table summarizes the components of our fiscal 2022 executive compensation.

 

FISCAL 2022 EXECUTIVE COMPENSATION
Element		Purpose		Key Features
Base Salary		Provide competitive baseline compensation and a level of cash income predictability and stability		✓  Fixed cash compensation   ✓    Amounts informed by external market data, accounting for factors such as scope of the position, experience and performance   ✓    Target competitive range at or below median (on average among our named executive officers) among our compensation Peer Group
Annual Incentive Plan (Cash Bonus)		Reward the achievement of corporate and individual performance during the year and demonstration of competencies from our Core Principles and Operating Procedures		✓  Variable cash compensation governed by terms of plan   ✓    Performance metrics include absolute revenue amounts requiring growth in upper quartile Peer Group   ✓  Target opportunity determined in consideration of external market data   ✓    Actual value based on a combination of Company financial performance and individually defined, pre-established performance objectives and demonstration of competencies for any payout
Long-Term Equity Incentives		Align with the long-term interests of our Company, our stockholders and our executives, while rewarding sustainable value creation and driving retention		✓  Variable equity-based compensation governed by award agreements   ✓    Size of awards and metrics determined in consideration of external market data   ✓  Performance metrics in all PSUs require difficult targets   ✓    Measures relative TSR, business and other targets; TSR modifier for annual PSU grants is capped at 1.00x for negative absolute TSR   ✓  Annual PSUs contain three-year performance period   ✓    Options have three-year ratable vesting with a 10-year term and are intended to put a greater portion of total compensation “at risk”   ✓  Time-based RSUs used to buttress retention of top talent

Compensation Governance

Compensation Oversight

Role of the Compensation Committee

The Compensation Committee, which consists entirely of independent directors, oversees our executive compensation programs and met throughout fiscal 2022 to discuss the key items described under “The Annual Process.” The Compensation Committee administers our annual cash incentive and long-term equity incentive plans and reviews performance levels relevant to compensation. It also decides the compensation of all named executive officers other than our Chairman, President and Chief Executive Officer, seeks to maintain executive compensation that is fair and aligned with our compensation policy, and makes recommendations to our Board of Directors with respect to the compensation of the Chairman, President and Chief Executive Officer and our compensation practices generally. Although the Chairman, President and Chief Executive Officer oversees the Board of Directors as its Chairman, he recuses himself from all Board discussions and decisions on his own compensation.

The Compensation Committee reviews all of the information presented and discusses the recommendations with the Chairman, President and Chief Executive Officer and with our compensation consultant. In making decisions regarding pay levels and practices for our named executive officers, the Compensation Committee considers a variety of factors, including:

 

•

absolute corporate performance relative to our objectives;

 

•

our corporate performance relative to our established Peer Group;

 

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•

creation of long-term value for our stockholders and stockholder views on compensation;

 

•

feedback from stockholders and proxy advisors as part of our outreach efforts; and

 

•

compensation practices observed in our established Peer Group.

The duties and responsibilities of the Compensation Committee are laid out in its charter, which can be found on our website, and are described under “The Board of Directors and Certain Governance Matters—Committees of the Board of Directors—Compensation Committee.”

Role of the Independent Compensation Consultant

As provided in its charter, the Compensation Committee has the right to retain compensation consultants (and other outside consultants) to provide independent advice to the Compensation Committee. In fiscal 2022, the Compensation Committee appointed Willis Towers Watson as an independent outside compensation consultant. During fiscal 2022, Willis Towers Watson advised the Compensation Committee on various compensation-related items, including peer group development, market practices, industry trends, investor views and market data. In addition, Willis Towers Watson reviewed and provided the Compensation Committee with an independent perspective of management recommendations on compensation. As part of its annual independence assessment during fiscal 2022 (cited under “Annual Process” below), the Compensation Committee considered the six factors specified by the SEC in Rule 10C-1 and by Nasdaq Stock Market Rule 5605(d)(3)(D) to monitor the independence of its compensation consultant, and determined that Willis Towers Watson’s services did not raise a conflict of interest.

Role of Management

Each year, the Chairman, President and Chief Executive Officer provides an assessment of the performance of each named executive officer, other than himself, during the prior year and recommends to the Compensation Committee the compensation to be awarded to each executive officer, which is then determined by the Compensation Committee. The Chairman, President and Chief Executive Officer’s recommendations are based on numerous factors, including:

 

•

corporate and individual performance;

 

•

leadership competencies; and

 

•

market competitiveness.

The Chairman, President and Chief Executive Officer also provides a self-assessment of his achievements for the prior year, which the Compensation Committee reviews and considers when making a recommendation for an appropriate level of compensation for the Chairman, President and Chief Executive Officer to the Board for approval. The Chairman, President and Chief Executive Officer is not present for and does not participate in any deliberations regarding his own compensation.

 

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The Annual Process

The Compensation Committee typically meets quarterly to consider the items discussed below.

 

Quarter		Typical Meeting Topics
Q1   (May)		✓		Review and approve executive compensation for current fiscal year, including salaries, bonuses and long-term incentive awards, and approve any bonus and long-term incentive award payouts for prior year
		✓		Review compensation for non-employee directors and recommend changes to full Board for approval
		✓		Assess compliance with stock ownership guidelines
		✓		Review historical equity awards and resulting burn rates
		✓		Review and finalize relevant proxy statement content for upcoming annual meeting of stockholders
Q2   (August)		✓		Review and discuss proxy advisory reports and other investor feedback
		✓		Review and discuss executive compensation risk assessment
		✓		Review current compensation philosophy
		✓		Review Compensation Committee Charter
		✓		Undertake Compensation Committee self-evaluation
Q3   (November)		✓		Review updates on legislative, regulatory and governance environments
		✓		Annual review and approval of Peer Group
		✓		Review factors affecting independence of compensation consultant
		✓		Review the design and administration of qualified benefit plans
Q4   (March)		✓		Review and consider executive compensation benchmarking

Compensation Peer Group

To understand the market competitiveness of the compensation for our named executive officers, each year, the Compensation Committee reviews a report analyzing publicly available information and surveys prepared by our independent compensation consultant, Willis Towers Watson. The report compares the compensation of each named executive officer to data for comparable positions at companies in our Peer Group. The Compensation Committee reviews our Peer Group each year, with input from Willis Towers Watson. In creating the Peer Group, consideration is given to various factors, including:

 

•

size relative to our Company (revenue, market capitalization, GAAP operating margin and other relevant criteria); and

 

•

nature of business (business focus and model).

In November 2021, based on a review of these factors, the Compensation Committee approved changes to our Peer Group to more closely align with the Company’s size and business. These changes included removing Align Technology, Inc. and Hologic, Inc. and adding AtriCure, Inc. and LivaNova PLC. The Compensation Committee also removed Cantel Medical Corp. from our Peer Group because it had been acquired.

 

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The resulting fiscal 2022 compensation Peer Group comprised the following companies:

 

•    Atricure, Inc.   •    Avanos Medical, Inc.   •    CONMED Corporation   •    DexCom, Inc.   •    Edwards Lifesciences Corporation   •    Globus Medical, Inc.   •    Haemonetics Corporation		•    ICU Medical, Inc.   •    Inogen, Inc.   •    Integra LifeSciences Holdings Corporation   •    LivaNova PLC   •    Masimo Corporation   •    Merit Medical Systems, Inc.		•    Natus Medical Incorporated   •    Nevro Corp.   •    NuVasive, Inc.   •    Penumbra, Inc.   •    ResMed Inc.   •    Teleflex Incorporated

 Fiscal 2022 Base Salary

 

 

We pay each of our named executive officers a base salary to provide a baseline level of compensation that is both competitive with the market and commensurate with each employee’s past performance, experience, responsibilities and skills. Base salaries are set using the median of companies in our compensation Peer Group as an initial reference point with consideration of the factors described above. For our named executive officers, the percentage increase from the salary rate set for fiscal 2021 corresponded to the named executive officer’s overall performance ranking of 1 to 4 under his annual cash incentive award in fiscal 2021 (the ranking system is described in more detail under “Fiscal 2022 Annual Incentive Plan” below), while taking into account market adjustments. Base salaries may also be adjusted from time to time based upon the Company’s overall budgetary guidelines, employee promotions or increased responsibilities.

At the outset of fiscal 2021, the Compensation Committee and, in the case of the Chairman, President and Chief Executive Officer, the Board, approved base salaries equal to those in fiscal 2020 for all named executive officers. Shortly afterward, in April 2020, the Company announced that, in light of the disruption and uncertainty created by the evolving COVID-19 pandemic and its anticipated impact on the Company’s operations, all NEOs would take a salary cut for Q1 2021, with Mr. Minogue and Dr. Weber completely forgoing their base salaries, other than payments necessary to retain their benefits, and Messrs. Trapp, Greenfield and Began taking a 50% reduction in base salary. In fiscal 2022, base salaries were increased as shown in the table below.

 

Named Executive Officer		Fiscal 2022     Base Salary		Change from     Fiscal 2020		Fiscal 2021     Base Salary     Paid(1)		Reduction to     Fiscal 2021 Base Salary Paid from 2020 Base Salary(1)		Fiscal 2020     Base Salary
Michael R. Minogue		$791,513		p 3%		$608,363		q 21%		$768,459
Todd A. Trapp		$489,600		p 2%		$430,000		q 10%		$480,000
Andrew J. Greenfield		$346,602		p 3%		$301,454		q 10%		$336,507
David M. Weber		$451,415		p 2%		$350,363		q 21%		$442,564
Marc A. Began		$397,800		p 4%		$342,656		q 10%		$382,500

 

(1)

Although each NEO’s 2021 base salary rate was maintained from 2020, during Q1 2021, Mr. Minogue and Dr. Weber each took a 100% reduction in base salary (other than payments necessary to retain their benefits), and Messrs. Trapp, Greenfield and Began each took a 50% reduction in base salary, as explained above.

 

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 Fiscal 2022 Annual Incentive Plan

 

 

We maintain the Annual Incentive Plan, a cash incentive plan, for all employees, including our named executive officers. The purpose of this program is (i) to motivate and reward among our named executive officers the attainment of measurable performance objectives, including annually set financial, strategic and operational goals (the “Performance Goals”), and (ii) to encourage the named executive officers to uphold a strong work ethic and a healthy corporate culture via certain leadership factors (the “Leadership Factors”).

Each named executive officer is assessed against these Performance Goals and Leadership Factors according to his achievement during the fiscal year. Based on relative weighting among the multiple Performance Goals, as well as between the Performance Goals and the Leadership Factors, the named executive officer ultimately receives an overall rating of 1 to 4 (with 4 representing the highest degree of performance), which translates to a defined bonus payout as a percentage of target bonus. The Board completes the evaluation for the Chairman, President and Chief Executive Officer. The Chairman, President and Chief Executive Officer evaluates the other named executive officers.

Target Annual Cash Incentive Levels

At the outset of the fiscal year, the Compensation Committee analyzes external market data and prior year targets to establish target and maximum annual cash incentive levels under the Annual Incentive Plan for our named executive officers other than our Chairman, President and Chief Executive Officer. For our Chairman, President and Chief Executive Officer, the Compensation Committee undertakes the same rigorous process and recommends target and maximum annual cash incentive levels to the Board, which then determines whether to approve it. Annual cash incentive opportunities for fiscal 2022 were targeted at a level that represented a meaningful portion of each named executive officer’s base salary and were competitive with our Peer Group.

The target awards as a percentage of salary were as follows: for Mr. Minogue, 195% (representing no change from fiscal 2021); for Mr. Trapp, 65% (representing no change from fiscal 2021); for Mr. Greenfield, 75% (representing no change from fiscal 2021); for Dr. Weber, 85% (representing no change from fiscal 2021); and for Mr. Began, 60% (representing a 5% increase from fiscal 2021).

Actual cash incentive awards can range from 0% to 200% of target award levels. The Compensation Committee and Board believes that it is important to establish maximum payout amounts under the Annual Incentive Plan to prevent a risk of excessive cash compensation and excessive risk-taking, as described in “Compensation of Executive Officers—Managing Compensation-Related Risks.”

Evaluations Based on Performance Goals and Leadership Factors

We use our annual operating plan as the foundation for setting the Performance Goals. For each named executive officer, there were two components to the award in fiscal 2022:

 

2022 Annual Bonus Metrics
Metric		Weighting
Performance Goals		Revenue (20–40% of weighting)   Individual financial, operational and strategic goals established for each senior executive (60–80% of weighting)		70%
Leadership Factors				30%

Performance Goals are developed by our Chairman, President and Chief Executive Officer, in consultation with other members of senior management, and presented to our Compensation Committee for review and approval on an annual basis (other than with respect to our Chairman, President and Chief Executive Officer, whose goals are recommended by the Compensation Committee and approved by the Board). For each Performance Goal, we establish quantitative or qualitative performance targets for each rating level on a 1-to-4 rating scale. To prevent excessive discretion in annual assessments of performance, these targets are clearly defined, objective hurdles—whether numerical or qualitative—that the named executive officer must satisfy to obtain the applicable rating level.

 

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We undertake a rigorous process to set Performance Goals that are challenging and align management incentives with long-term stockholder value creation. We believe that these high and demanding targets, when evaluated against our maximum payouts, help to maintain a solid and balanced incentive structure.

We retained the revenue metric in our fiscal 2022 cash incentive awards, based on our belief that it remains a highly effective measure of our attainment of our mission to put “Patients First.” As a GAAP-profitable MedTech growth company, we believe revenue represents a highly effective financial measure of the attainment of our “Patients First” mission, and so we include revenue as a Performance Goal for all named executive officers. In our efforts to make our technology the standard of care, we consistently strive to improve patient outcomes. Such improved outcomes increase Impella^® utilization and enable us to reinvest in training, research and development, sales, marketing and educational initiatives. We also believe that revenue has been the driving factor in our TSR, and thus a tool for promoting stockholder value.

At the end of the fiscal year, each named executive officer is evaluated on a scale of 1 through 4 for each Performance Goal. Level “2” is the expected rating based on achieving aggressive goals or standards, with a level “3” rating assigned to those named executive officers that significantly exceed expectations and a level “4” rating being very difficult to achieve. Each Performance Goal is also assigned a sub-weight (within the overall 70%), with revenue generally carrying the plurality of the weight between 20% and 40%, depending on the named executive officer, and non-revenue goals carrying the remaining 60% to 80% of the weight. After evaluations are finalized, a weighted average of the Performance Goals is calculated (the “Weighted Average Performance Rating”), which is on a scale of 1 to 4 for the named executive officer. The Performance Goals are shown below.

 

Performance Goals for Named Executive Officers
All Named Executive Officers				•   Global revenue growth
Individual Performance     Goals		Mr. Minogue   Chairman, President and Chief Executive Officer		•   New product development and customer satisfaction •   Business development and stakeholder engagement •   TSR •   Clinical evidence generation in support of improved patient outcomes
		Mr. Trapp   Executive Vice President and Chief Financial Officer		•   Operating management and forecasting •   Investor relations and TSR •   Automation and efficiency projects and enhancing cybersecurity •   Human capital
		Mr. Greenfield   Executive Vice President and Chief Commercial Officer		•   Stakeholder engagement •   Clinical evidence generation •   Reimbursement in major markets •   Government affairs
		Dr. Weber   Former Senior Vice President and Chief Operating Officer		•   Product innovation •   Stakeholder engagement •   Customer satisfaction •   Clinical evidence generation in support of improved patient outcomes
		Mr. Began   Executive Vice President, General Counsel and Secretary		•   Business development •   Protection and promotion of innovation by strengthening intellectual property •   Ensuring compliance and defending the Company in legal proceedings •   Corporate affairs, stakeholder engagement, human capital and legal support for clinical trials

 

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The Leadership Factors for our named executive officers, other than our Chairman, President and Chief Executive Officer, are established by our Chairman, President and Chief Executive Officer and approved by the Compensation Committee. The Board determines and approves these factors as they apply to our Chairman, President and Chief Executive Officer, based on the Compensation Committee’s recommendations. We apply the same factors to all named executive officers, and believe that the factors promote ethical behavior in the best interests of the Company and its stockholders while encouraging named executive officers to comply with our robust standards of corporate culture and to develop their substantive knowledge and leadership skills.

 

Leadership Factor		Description
Leadership (formal and informal)		Ability to manage, motivate and influence others toward Company-wide objectives and beyond such stated goals and objectives.
Professional competency		Knowledge of area of expertise and dedication to continuing advancement of level of knowledge.
Work ethic		Commitment and dedication to organization on consistent basis.
Flexibility/attitude		Adaptability to changing priorities and tasks, and cooperation within function and Company.
Honor and integrity		Example for others with respect to Company values and commitment to high standards of excellence, integrity and conduct.
Commitment to Company’s Code of Conduct		Firm commitment to standards. See “The Board of Directors and Certain Governance Matters—Code of Conduct.”

Each named executive officer was evaluated on a 1-to-4 scale of his overall achievement against the Leadership Factors (the “Leadership Rating”). The Leadership Rating was assessed based on an objective review of actions and behaviors exhibited throughout fiscal 2022 by the named executive officer in question and was not used to make discretionary upward adjustments to a named executive officer’s Weighted Average Performance Rating for the Performance Goals.

Determination of Payouts

To determine the annual cash incentive award payout for each named executive officer, we calculate the weighted average of the officer’s Weighted Average Performance Rating and Leadership Rating (with the Weighted Average Performance Rating representing 70% of the overall rating and the Leadership Rating representing 30% of the overall rating). The named executive officer’s overall rating of 1 to 4 then translates to a defined bonus payout (as a percentage of target bonus). Under the terms of the Annual Incentive Plan, overall ratings correspond to payouts as described in the table below.

 

Overall Rating		Performance Level		Payout as % of Award Target
4		Maximum: Very difficult to achieve		150-200%
3		Significantly exceeded expectations		125-150%
2		Expected: Achieved aggressive goals or standards		100-125%
1		Goal or standard not met		0%

Cash incentive award payouts for named executive officers, other than the Chairman, President and Chief Executive Officer, are recommended by the Chairman, President and Chief Executive Officer and approved by the Compensation Committee. The Board analyzes and approves the actual cash incentive payouts for the Chairman, President and Chief Executive Officer, based on the Compensation Committee’s recommendations. Since overall ratings are tied to payouts within a range, the Compensation Committee (with respect to the named executive officers other than the Chairman, President and Chief Executive Officer) and the Board (with respect to the Chairman, President and Chief Executive Officer) possess discretion whether to pay out awards at the upper or low end of each applicable range.

 

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As part of our pay-for-performance culture, the Company has consistently set aggressive and difficult-to-achieve goals, which the Company believes have led it to historically outperform its Peer Group. In determining overall ratings for each named executive officer (between 1 and 4), the Compensation Committee and/or Board considered the following factors:

 

Factors Considered in Determining Overall Ratings
All Named Executive Officers				•   Fiscal 2022 revenue of $1.032 billion, up 22% versus prior year, placing the Company in the 82nd percentile of its Peer Group
Individual Performance Goals		Mr. Minogue   Chairman, President and Chief Executive Officer		•   Achieving strong top-line growth in a challenging environment •   Demonstrating strategic leadership during the ongoing COVID-19 pandemic to provide for business continuity while protecting human capital and keeping employees safe •   Expanding the Company’s product offerings •   Driving our continued long-term strong TSR (as discussed above in “Executive Summary”) •   Achieving successful execution of clinical evidence generation
		Mr. Trapp   Executive Vice President and Chief Financial Officer		•   Increasing efficiency through system automation •   Driving our continued long-term strong TSR •   Overseeing financial operations which resulted in a 24.9% operating margin while making significant growth investments •   Increasing employee engagement by enhancing leadership development programs
		Mr. Greenfield   Executive Vice President and Chief Commercial Officer		•   Achieving strong top-line growth in a challenging environment •   Securing the Company’s position as a key opinion leader in heart recovery by maintaining a strong presence at healthcare conferences •   Achieving successful clinical results for Impella products •   Maintaining strong reimbursement of our products
		Dr. Weber   Former Senior Vice President and Chief Operating Officer		•   Accelerating product innovation •   Securing the Company’s position as a key opinion leader in heart recovery •   Facilitating the rollout of smaller, smarter connected products •   Achieving successful execution of clinical trials
		Mr. Began   Executive Vice President, General Counsel and Secretary		•   Providing leadership in business development •   Bolstering the Company’s intellectual property portfolio with more than 1,400 patents worldwide, and an additional 1,400 pending •   Protecting human capital through on-site COVID-19 vaccine administration •   Successfully defending the Company in litigation

The Compensation Committee determined ratings for each named executive officer ranging from 2 to 4 for each goal and calculated a weighted overall rating between 2 and 4 in each case. The Compensation Committee also considered the Company’s achievement of innovation, clinical and regulatory milestones despite the ongoing macro headwinds. The Compensation Committee then determined the following payouts: for Mr. Minogue, $2,237,836 (representing 145% of target); for Mr. Trapp, $417,690 (representing 131% of target); for Mr. Greenfield, $450,366 (representing 173% of target); for Dr. Weber, $555,986 (representing 145% of target); and for Mr. Began, $413,513 (representing 173% of target).

 

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Fiscal 2022 Long-Term Incentive Awards

We offer equity incentives to employees to foster a culture of ownership, align compensation with stockholder interests and promote long-term retention and affiliation with the Company. Each year, the Compensation Committee determines the types and sizes of awards to be used for delivering such incentives. In doing so, the Compensation Committee considers the ability of each type of award to achieve key compensation objectives (such as retaining, motivating and attracting key talent), the needs of the business, competitive market practices, dilution and expense constraints, as well as tax and accounting implications. The Compensation Committee sets and approves the size, mix and terms of awards for all named executive officers, other than our Chairman, President and Chief Executive Officer, for which it makes recommendations to our Board for the Board’s approval.

Grants of Fiscal 2022 Annual Long-Term Equity Incentive Awards

Below is a summary of the annual long-term incentive vehicles awarded to our named executive officers in fiscal 2022.

 

Element		Purpose		Key Features
Performance-based PSUs (PSUs)		Incentivize continued focus on long-term performance		•   PSUs earned over a three-year period following grant and tied to a challenging revenue target and subject to a TSR modifier
Stock options		Incentivize long-term value creation and continued stock price growth		•   Three-year ratable vesting •   Ten-year term
Time-based RSUs (RSUs)		Retain key talent		•   Three-year ratable vesting

 

The Compensation Committee determines the mix of long-term equity incentives awarded to each named executive officer each year, and PSUs typically represent the largest proportion of any named executive officer’s annual long-term equity incentive compensation. For fiscal 2022, the Compensation Committee determined to maintain the fiscal 2021 equity pay mix for all named executive officers except for Dr. Weber, with PSUs continuing to make up the largest portion of the totally equity pay mix at approximately 50% (assuming a value at target), RSUs comprising approximately 30% and options the remaining approximately 20%. Dr. Weber was expected to retire during the three-year PSU performance period. Therefore, the Compensation Committee determined to only grant Dr. Weber RSUs (comprising approximately 60% of his total equity pay mix) and options (comprising the remaining 40%).   In determining or recommending to the Board the size of the stock option, PSU and RSU grants for fiscal 2022, the Compensation Committee reviewed market data, past financial performance and current corporate goals.   The accompanying ring chart and table show the mix and amounts of annual long-term equity incentive awards granted to each named executive officer, except for Dr. Weber, in fiscal 2022, based on the grant date fair values, as decided by our Compensation Committee as part of its annual equity grants.		AVERAGE NEO EQUITY COMPENSATION MIX FISCAL 2022(1)       (1)  The above chart excludes equity grants made to Dr. Weber for fiscal 2022. As discussed in “Fiscal 2022 Long-Term Incentive Awards—Grants of Fiscal 2022 Annual Long-Term Equity Incentive Awards,” the equity pay mix for Dr. Weber did not include PSUs. Values presented in this chart are approximate.

 

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		AMOUNTS GRANTED
		Number of PSUs Granted (at Target)		Number of RSUs Granted		Number of Stock Options Granted		Grant Date Fair Value of All Awards  Granted(1)
Michael R. Minogue		14,172		8,503		30,000		$9,630,285
Todd A. Trapp		4,000		2,021		3,737		$2,126,060
Andrew J. Greenfield		4,000		2,000		2,868		$2,031,097
David M. Weber(2)		—		2,687		4,969		$1,271,704
Marc A. Began		3,000		2,000		2,961		$1,748,222

(1)

Includes grant date fair values of stock option, RSU and PSU awards. For PSU awards, values assume a payout at the probable outcome level (i.e., target). For valuation assumptions, please see footnotes 1 and 2 to the Summary Compensation Table.

(2)

As discussed in “Fiscal 2022 Long-Term Incentive Awards—Grants of Fiscal 2022 Annual Long-Term Equity Incentive Awards,” Dr. Weber was not granted PSUs as he was expected to retire during the three-year performance period.

Fiscal 2022 PSU Awards

For fiscal 2022, with the input of our independent compensation consultant, we made certain key changes to our annual PSU awards. We determined to use revenue growth and TSR relative to our Peer Group as metrics for the PSUs. We used revenue growth to maintain primary focus and provide line of sight on growing the business, and we used relative TSR as an additional focus on stockholder alignment and an assessment of our performance relative to our Peer Group. The PSUs will be earned over a three-year performance period following grant. Revenue is measured over a one-year performance period and subject to a modifier ranging from 0.50 to 1.25x based on achievement of the relative TSR goals (subject, in each case, to linear interpolation) measured over a three-year performance period. The earned portions of the PSUs will cliff-vest three years after grant.

The Compensation Committee determined to use one-year revenue growth for its ability to respond to market volatility, alignment with the Company’s goal setting, simplicity of design and consistency with past practice. Fiscal 2022 revenue targets were expressed as growth over fiscal 2021 revenue. In May 2022, the Compensation Committee determined a performance level of 153% based on one-year revenue growth of 22%, which placed the Company in the 82nd percentile of our Peer Group.

With respect to the PSUs that may be earned for relative TSR performance, the Compensation Committee and, with respect to Mr. Minogue’s compensation, the Board of Directors, set very challenging goals in order to reinforce the alignment of management’s interests with those of stockholders. A maximum modifier of 1.25x requires outstanding performance within our Peer Group, with a relative TSR during the applicable performance period at or above the 90th percentile. Additionally, if our absolute TSR is negative, the TSR modifier will be capped at 1.00x, regardless of our relative TSR within our Peer Group. A relative TSR at or below the 10th percentile during the applicable performance period will lead to a modifier of 0.50x and a relative TSR at the 50th percentile during the applicable performance period will lead to a multiplier of 1.00x.

Determination of COVID-19 Recovery Grant Performance

To align management around our ongoing strategic COVID-19 recovery plan, our Compensation Committee and, for Mr. Minogue, our Board of Directors, approved a COVID-19 recovery grant to each of our NEOs in November 2020. Unlike our annual PSUs, which have a three-year performance period, these were subject to a one-year performance period to motivate and reward senior management’s performance in handling immediate issues raised by COVID-19.

Payouts under the PSUs were based on a revenue growth metric (representing 30% weight of total payout) and certain other business metrics relating to the pandemic, including human capital (representing 20% weight of total payout), manufacturing (representing 20% weight of total payout) and new product development milestones (representing 30% weight of total payout). PSUs were capped overall at 200% of target for all NEOs other than Mr. Minogue. Additionally, in recognition of Mr. Minogue’s focused leadership of the Company during the pandemic, his earned PSU amount may be multiplied by an additional 125% if the Company achieves certain other strategic business metrics not included in the other named executive officers’ PSU grants.

 

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In November 2021, the Compensation Committee assessed performance at maximum 200% for revenue growth and the human capital and manufacturing milestones and 50% for the new product development milestone and determined a payout of 155% for our named executive officers other than our Chairman, President and Chief Executive Officer, and 194% for our Chairman, President and Chief Executive Officer. Half of the earned PSUs vested at the end of the performance period and the remaining earned PSUs will vest based on the continued service of the named executive officer through the second anniversary of the grant date.

Other Elements of Compensation

Benefits and Perquisites

We do not provide excessive benefits or perquisites to our executive officers. We provide them with matching contributions to our 401(k) plan, which are available to substantially all of our employees. We also provide life insurance and long-term disability insurance premiums, which represent typical elements of executive compensation. In addition, our named executive officers are entitled to certain benefits in connection with certain terminations of employment and/or in connection with a change of control, as further described in “Narrative Supplement to Compensation Tables—Change of Control Agreements with Named Executive Officers.”

Tax and Accounting Considerations

Deductibility of Executive Compensation

Section 162(m) of the Internal Revenue Code (the “Code”) places a limit of $1 million per year on the amount of compensation paid to certain of our executive officers that the Company may deduct for federal income tax purposes.

The Tax Cuts and Jobs Act, enacted on December 22, 2017 (the “Tax Reform Law”), substantially modified Section 162(m) by, among other things, eliminating the exception for performance-based compensation to the $1 million deduction limit effective as of January 1, 2018. As a result, beginning in 2018, we generally expect that compensation paid to each of our named executive officers in excess of $1 million is nondeductible, whether or not it is performance-based.

The Compensation Committee intends to continue to maintain flexibility and the ability to pay competitive compensation by not requiring all compensation to be deductible. The Tax Reform Law also includes a transition rule under which the changes to Section 162(m) described above will not apply to compensation payable pursuant to a written binding contract that was in effect on November 2, 2017 and is not subsequently materially modified. To the extent applicable to our existing contracts and awards, the Compensation Committee may choose to avail itself of the transition rule. However, due to uncertainties as to the application and interpretation of the transition rule, no assurances can be given at this time that our existing plans and previously granted awards, even if in place on November 2, 2017, will meet the requirements of the transition rule. Regardless of any changes in law, the Compensation Committee intends to continue to implement compensation programs that it believes are competitive and in the best interests of the Company and its stockholders.

No New Tax Gross-ups

In May 2015, the Compensation Committee adopted a policy not to provide tax gross-ups under Sections 280G and 4999 of the Code in any new employment agreements.

Managing Compensation-Related Risks

The Compensation Committee reviews the risks associated with the Company’s compensation policies and practices to determine whether any risks associated with such policies and practices encourage unnecessary or excessive risk-taking or are reasonably likely to have a material adverse effect on the Company. The Compensation Committee also oversees an annual review of the Company’s risk assessment of its compensation policies and practices for its employees. The risk-mitigating features that the Company has adopted within our executive compensation programs are summarized below.

 

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Clawback Policy

We maintain a robust recoupment (or “clawback”) policy covering each of our executive officers. The policy provides that if the Company is required to restate its financial results due to material noncompliance with financial reporting requirements under the securities laws, the Compensation Committee may seek reimbursement of any cash- or equity-based bonus/other incentive compensation (including vested and unvested equity) paid or awarded to the executive officer or effect cancellation of previously granted equity awards to the extent the compensation was based on erroneous financial data and exceeded what would have been paid to the executive officer under the restatement. Under our award agreements, we may also recover from executive officer grantees’ compensation in connection with the grantee’s breach of a non-competition, non-solicitation, confidentiality or similar covenant or agreement.

Anti-Hedging and Anti-Pledging Policies

Our policies prohibit, without exception, all executive officers, employees and directors from hedging their ownership of our securities, engaging in short sales with respect to our securities or pledging our securities.

Double-Trigger Vesting Arrangements

Our RSU and option equity award agreements for recent and new grants to our NEOs contain double-trigger vesting arrangements upon a change of control. Additionally, our PSU equity award agreements for recent and new grants to our NEOs contain double-trigger vesting arrangements upon a change of control, provided the acquirer assumes the PSU awards and the grantee is terminated within one or two years after the change of control.

NEO Stock Ownership Guidelines and Share Retention Requirements

We maintain stock ownership guidelines intended to align further the interests of our NEOs with those of our stockholders. The guidelines require covered roles to hold common stock (including common stock held in trust, by certain family members or in the Company’s 401(k) plan and stock underlying unvested RSUs or restricted stock awards, but excluding stock underlying options or stock appreciation rights and unvested or unearned PSUs or other performance stock awards) worth a value expressed as a multiple of their salary. We regularly review our ownership guidelines for alignment with Peer Group norms and governance best practices and that they remain appropriate in light of our annual equity award levels. In fiscal 2021, we amended our guidelines, including the required share ownership amounts, to bring them more in line with market norms.

Each of our NEOs is required to meet these ownership levels by five years after his initial designation as an executive officer of the Company. Until reaching the required ownership level, NEOs are required to retain at least 50% of the shares, net of applicable tax withholding and the payment of any exercise or purchase price (if applicable), received upon the vesting or settlement of equity awards or the exercise of stock options. As of March 31, 2022, all of our NEOs had timely met the stock ownership requirement or were within the five-year grace period to come into compliance with it.

 

Role		Share Ownership Guideline (Multiple of Salary)		Compliance(1)
Chairman, President and Chief Executive Officer		6.00		✓
Executive Vice President and Chief Financial Officer		4.00		✓
Other Executive Officers		3.00		✓

(1)

Based on salary and fair market value of counted equity as of March 31, 2022.

Fiscal 2023 Compensation

In May 2022, the Compensation Committee conducted its annual executive compensation review. As part of this review, the Compensation Committee made fiscal 2023 compensation decisions for our named executive officers and recommended the compensation of our Chairman, President and Chief Executive Officer to the Board, which then met to approve his fiscal 2023 compensation. The Compensation Committee considered, among other factors, our strategic plans for growth and expansion, our corporate performance and our NEOs’ individual performance, market data and the input of Willis Towers Watson.

 

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Previously, the bonus program and PSU awards did not expressly reference the effect of currency exchange rate fluctuations. In May 2022, the Compensation Committee considered the impact of such fluctuations and exercised its discretion to measure performance using constant currency and determined to use constant currency going forward. The Compensation Committee believes the use of constant currency increases the alignment between the Company’s performance and executive compensation. The Compensation Committee also considered that the adjustment provides better consistency in assessing and rewarding financial results over the longer term.

Since his retirement as an executive officer on March 31, 2022, Dr. Weber remains employed by the Company for at least 30 hours per week as a scientific and technology advisor with an annual salary of $255,000. In his new role, he remains eligible for equity grants each year as part of the annual employee review process, but it is not expected that he will receive an annual cash incentive award. He will also remain eligible for the standard benefit package offered to the Company’s employees.

Compensation Committee Report

The Compensation Committee has reviewed and discussed with management the contents of the Compensation Discussion and Analysis set forth above. Based on its review and discussion, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into the Company’s 2022 Annual Report.

Compensation Committee

 

By:	Paul G. Thomas (Chair)

Martin P. Sutter

Jeannine M. Rivet

 

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Compensation Tables

 

Summary Compensation Table

The following Summary Compensation Table provides a summary of all compensation required to be reported and earned with respect to fiscal 2022, 2021 and 2020 by our named executive officers.

 

Name and Principal Position		Fiscal Year					Salary($)					Stock Awards ($)(1)					Option Awards ($)(2)					Non-Equity Incentive  Plan Compensation ($)(3)					All Other Compensation ($)(4)					Total ($)
Michael R. Minogue		2022					788,631					6,557,724					3,072,561					2,237,836					9,240					12,665,992
Chairman of the Board, President,		2021					608,363					10,672,356					1,610,358					1,948,044					9,126					14,848,247
Chief Executive Officer		2020					768,459					10,122,820					4,813,414					899,097					8,976					16,612,766
Todd A. Trapp		2022					488,000					1,743,321					382,739					417,690					9,240					3,040,990
Executive Vice President, Chief		2021					430,000					3,496,819					503,189					327,600					9,126					4,766,734
Financial Officer(5)		2020					480,000					1,598,340					673,878					312,000					8,976					3,073,194
Andrew J. Greenfield		2022					345,340					1,737,360					293,737					450,366					9,240					2,836,043
Executive Vice President and		2021					301,454					3,010,116					377,276					328,095					9,126					4,026,067
Chief Commercial Officer(5)		2020					336,507					1,598,340					673,878					201,904					8,976					2,819,605
David M. Weber		2022					450,307					762,786					508,919					555,986					9,240					2,287,238
Former Senior Vice President and		2021					350,363					3,065,037					385,290					394,988					9,126					4,204,804
Chief Operating Officer		2020					442,564					1,331,950					577,610					300,943					8,976					2,662,043
Marc A. Began		2022					395,887					1,444,960					303,262					413,513					9,240					2,566,862
Executive Vice President,   General Counsel(5)		2021					342,656					3,212,914					394,922					326,081					9,126					4,285,699

(1)

Amounts shown represent the aggregate grant date fair value of awards of PSUs and time-based RSUs made to the named executive officer in the applicable fiscal year, as computed in accordance with FASB ASC Topic 718. The underlying valuation assumptions are discussed in Note 14 to our consolidated financial statements for our fiscal year ended March 31, 2022, included in our 2022 Annual Report. As required by SEC rules, stock awards are reported in the year of grant. For fiscal 2022, fiscal 2021 and fiscal 2020, the grant date fair value of PSUs as reported assumed performance at the target payout level. As required by SEC rules, the grant date fair value of the PSUs at the maximum payout levels in fiscal 2022 for each named executive officer is as follows: for Mr. Minogue, $10,359,732; for Mr. Trapp, $2,924,000; for Mr. Greenfield, $2,942,000; for Dr. Weber, $0; and for Mr. Began, $2,193,000. For more information, see “Compensation Discussion and Analysis—Fiscal 2021 Long-Term Incentive Awards.”

(2)

Amounts shown represent the aggregate grant date fair value of option awards made to the named executive officer, computed in accordance with FASB ASC Topic 718. Fair value is calculated using the Black-Scholes value on the grant date. As required by SEC rules, awards are reported in the year of grant. The underlying valuation assumptions are discussed in Note 14 to our consolidated financial statements for our fiscal year ended March 31, 2022, included in our 2022 Annual Report.

(3)

Reflects amounts that were earned under our annual cash incentive plan for fiscal 2022, fiscal 2021 and fiscal 2020 performance and that were determined and paid during the first quarter of each following fiscal year.

(4)

Includes the following for the relevant fiscal years: (a) 401(k) contributions by the Company, which were (i) for Mr. Minogue, $8,700 in 2022, $8,550 in 2021 and $8,400 in 2020; (ii) for Mr. Trapp, $8,700 in 2022, $8,550 in 2021 and $8,400 in 2020; (iii) for Mr. Greenfield, $8,700 in 2022, $8,550 in 2021 and $8,400 in 2020; (iv) for Dr. Weber, $8,700 in 2022, $8,550 in 2021 and $8,400 in 2020; and (v) for Mr. Began, $8,700 in 2022 and $8,550 in 2021; and (b) life insurance premium payments by the Company, which were, for all named executive officers, $540 in 2022 and $576 in prior reported years.

(5)

Messrs. Trapp, Greenfield and Began each became an Executive Vice President effective April 1, 2022.

 

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Grants of Plan-Based Awards

The following table provides information regarding grants of plan-based awards to the named executive officers during fiscal 2022.

 

		Grant Date(1)		Estimated Future Payouts Under Non-Equity Incentive Plan Awards(2)				Estimated Future Payouts Under Equity Incentive Plan  Awards(3)						All Other Stock Awards: Number of Shares of Stock or  Units (#)(4)		All Other Option Awards: Number of Securities Underlying  Options (#)(5)		Exercise or Base Price of Option Awards ($/Sh)		Grant Date Fair Value of Stock and Option Awards(6)
Name				Target ($)		Maximum ($)		Threshold (#)		Target (#)		Maximum (#)
Michael R. Minogue		5/25/2021		1,543,450		3,086,901
		5/25/2021						n/a		14,172		35,430								4,143,893
		5/25/2021												8,503						2,413,832
		5/25/2021														30,000		283.88		3,072,561
Todd A. Trapp		5/25/2021		318,240		636,480
		5/25/2021						n/a		4,000		10,000								1,169,600
		5/25/2021												2,021						573,721
		5/25/2021														3,737		283.88		382,739
Andrew J. Greenfield		5/25/2021		259,952		519,903
		5/25/2021						n/a		4,000		10,000								1,169,600
		5/25/2021												2,000						567,760
		5/25/2021														2,868		283.88		293,737
David M. Weber		5/25/2021		383,703		767,406
		5/25/2021												2,687						762,786
		5/25/2021														4,969		283.88		508,919
Marc A. Began		5/25/2021		218,790		437,580
		5/25/2021						n/a		3,000		7,500								877,200
		5/25/2021												2,000						567,760
		5/25/2021														2,961		283.88		303,262

(1)

Reflects the dates on which the Compensation Committee approved the target fiscal 2022 annual cash incentive awards or the grants of PSUs, time-based RSUs or stock options, as applicable. No named executive officer paid any amount to us in consideration for the grant of any PSUs, time-based RSUs or stock options.

(2)

Represents potential target and maximum cash payouts set at the beginning of the fiscal year under our fiscal 2022 Annual Incentive Plan. There are no threshold cash payout levels under the fiscal 2022 Annual Incentive Plan. The amounts actually paid with respect to fiscal 2022 are reported in the Summary Compensation Table under the heading “Non-Equity Incentive Plan Compensation.” For information on the formula and/or criteria used to determine the amounts paid under these fiscal 2022 grants, see “Compensation Discussion and Analysis—Fiscal 2022 Annual Incentive Plan.”

(3)

The grants to each named executive officer represent shares of our common stock subject to PSUs granted under our 2015 Plan, eligible to be earned based on the achievement of certain goals, and, in the case of the COVID-19 recovery grants made on November 5, 2020, subject to time-based vesting once earned. There are no threshold payout levels under the annual PSU grants made on May 29, 2020. For information on the performance conditions used in determining the amounts to be paid out for and the vesting schedule of PSU grants made in fiscal 2022, see “Compensation Discussion and Analysis—Fiscal 2022 Long-Term Incentive Awards.”

(4)

Represents shares of our common stock subject to time-based RSU awards granted under our 2015 Plan that are subject to ratable time-based vesting over three years on each anniversary of the date of grant.

(5)

Represents stock options to purchase shares of our common stock granted under our 2015 Plan that are subject to ratable time-based vesting over three years on each anniversary of the date of grant.

(6)

Amounts shown do not reflect compensation actually received by the named executive officer. Instead, the amounts shown reflect the grant date fair values of the awards computed in accordance with FASB ASC Topic 718. For stock options, fair value is calculated using the Black-Scholes value on the grant date. In calculating these values, we used the assumptions described in Note 14 to our consolidated financial statements, included in our 2022 Annual Report. The grant date fair value of PSUs is determined based on the probable outcome of the performance conditions associated with the awards (i.e., target). The actual amount of compensation that may be earned by the named executive officer depends on the extent to which the awards vest and the price of our common stock at the time of exercise or vesting.

 

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