Cary J. Claiborne
About Cary J. Claiborne
Cary J. Claiborne is Chief Executive Officer (since August 18, 2022) and a director of Adial Pharmaceuticals; age 64, director since November 2021. He holds a B.A. in Business Administration from Rutgers University and an MBA from Villanova University, and is an NACD Governance Fellow . During his tenure, the company reported cumulative TSR value of $2.76 for 2023 and $1.50 for 2024, with net losses of $5.1M in 2023 and $13.2M in 2024 . EBITDA and net income trends have remained negative over 2022–2024 (see table), reflecting clinical-stage economics rather than operating profitability.*
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| EBITDA ($USD) | -10.86M* | -6.89M* | -8.28M* |
| Net Income ($USD) | -12.73M* | -5.12M* | -13.20M* |
*Values retrieved from S&P Global.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Indivior PLC | Chief Financial Officer & Director | Nov 2014–Feb 2017 | Led spin-off from Reckitt Benckiser; established reporting, audit, tax, treasury, IT . |
| Sucampo Pharmaceuticals | Chief Financial Officer | Prior to Indivior | Company later sold to Mallinckrodt; CFO experience at global biopharma . |
| Osiris Therapeutics | CFO & Corporate Secretary | Prior to Sucampo | Oversaw corporate finance during IPO . |
| Prosperity Capital Mgmt. | CEO/Founder | Prior to Adial | Private investment/advisory firm focused on pharma/biotech and finance . |
External Roles
| Organization | Role | Years | Committee/Notes |
|---|---|---|---|
| NeuroSense Therapeutics (Nasdaq) | Director | Appointed Dec 2021 | Audit Committee Chair . |
| LadRX Corporation | Director | Appointed Jul 2022 | Compensation Committee Chair . |
| VirginiaBio | Director | Appointed Nov 2022 | Industry association board service . |
Fixed Compensation
| Component | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $356,722 | $465,625 | $485,688 |
| Target Bonus (%) | 40% of base (accrued, discretionary) | Not disclosed | 50% of base per amended employment agreement (effective Dec 5, 2024) |
| Actual Bonus ($) | $127,050 equity + $54,000 cash, paid in 2023 | $190,000 (earned 2023, paid 2024) | $196,236 accrued; portion paid $112,500/$225,000 disclosed in later proxies |
| All Other Compensation ($) | $58,354 (benefits, 401k, director fees, phone) | $72,682 | $75,643 |
Performance Compensation
| Award Type | Grant Date | Quantity | Strike/Grant Price | Vesting Schedule | Expiration |
|---|---|---|---|---|---|
| RSU (restricted stock units) | Aug 18, 2022 | 1,000,000 shares | N/A | Monthly over 3 years | N/A |
| Stock Options | May 23, 2023 | 12,000 options | $7.50 | 1/36 monthly | 10 years |
| Stock Options | Mar 25, 2024 | 60,000 options | $1.35 | 1/36 monthly | 10 years |
| Stock Options | Dec 5, 2024 | 350,000 options | $1.15 | 1/36 monthly | 10 years |
| Metric-Linked Pay Design | Weighting | Target | Actual | Payout | Vesting Notes |
|---|---|---|---|---|---|
| Annual bonus | Not disclosed | 40% of base (2022), 50% (from Dec 2024) | $127,050 equity+$54,000 cash (2022), $190,000 (2023), $196,236 accrued (2024) | Discretionary; not directly tied to disclosed financial metrics | N/A |
The company disclosed it did not use “financial performance measures” under Item 402(v) to link NEO compensation for 2023–2024; pay decisions reflected long-term incentives and discretionary assessments rather than formulaic financial targets .
Equity Ownership & Alignment
| Date (Record) | Shares Beneficially Owned | % of Shares Outstanding | Notes |
|---|---|---|---|
| Mar 3, 2023 | 1,201,296 | 4.20% | 1.1M shares + options within 60 days . |
| Sep 26, 2024 | 89,984 | 2.08% | 60,799 shares + 29,185 options within 60 days . |
| Feb 28, 2025 | 148,609 | 2.23% | 60,799 shares + 87,810 options within 60 days . |
| Jun 4, 2025 | 210,832 | 2.38% | 60,799 shares + 150,033 options within 60 days . |
- Anti-hedging and anti-pledging policy: Company prohibits hedging and pledging by executives/directors (short sales, derivatives, collars, etc.), reducing misalignment risk .
- Ownership guidelines: Not disclosed; compliance status not provided.
Outstanding Equity Awards (as of Dec 31, 2023)
| Exercise Price | Exercisable | Unexercisable | Expiration |
|---|---|---|---|
| $78.25 | 1,800 | 600 | 11/01/2031 |
| $66.00 | 3,611 | 1,589 | 12/07/2031 |
| $50.00 | 170 | 96 | 02/23/2032 |
| $7.50 | 2,667 | 9,333 | 05/22/2033 |
Employment Terms
| Provision | Base Case Termination (without Cause/by Good Reason) | Change-of-Control (CoC) Termination (double trigger) | Death/Disability |
|---|---|---|---|
| Cash Severance | 12 months base salary (Claiborne) | Lump sum 2x (base + higher of target bonus or prior-year actual) | N/A |
| Bonus Treatment | Prior-year unpaid bonus + pro-rata current-year bonus | Prior-year unpaid bonus + pro-rata current-year bonus | Prior-year unpaid + pro-rata current-year bonus |
| COBRA | 12 months | 24 months | 12 months |
| Equity Acceleration | Not specified (base case) | Full acceleration; performance equity deemed at least target; options/SARs exercisable for 24 months (not beyond expiry) | Accelerated vesting of salary/bonus-paid equity; for others, at least next-12-month tranche or plan terms; options/SARs exercisable 12 months (not beyond expiry) |
| Restrictive Covenants | Non-compete 24 months; non-solicit/acceptance 12 months; confidentiality 7 years; non-disparagement ongoing | ||
| Good Reason / Cause Definitions | Detailed multi-prong definitions; cure and hearing rights; independent director approval for Cause terminations |
- Amended & Restated Employment Agreement effective Dec 5, 2024 set 3-year term and increased CEO bonus target to 50%; added an option grant of 350,000 shares vesting monthly over 36 months .
Board Governance
| Role | Status |
|---|---|
| Board composition | 6 directors; Chairman Kevin Schuyler (non-executive), Lead Independent Director Schuyler; Claiborne is CEO and director (non-independent) . |
| Committees | Audit: Schuyler (Chair), Newman, Anderson — independent . Compensation: Anderson (Chair), Newman — independent . Nominating/Governance: Gilliland (Chair), Schuyler — independent . |
| Board attendance | Board met 12 times in 2023; all incumbent directors attended ≥75% of meetings and committees . |
| Executive sessions | Lead Independent Director presides; separation of Chair and CEO mitigates dual-role risks . |
| Independence | Claiborne and Goodman are not independent due to executive roles; all committee members meet Nasdaq/SEC independence . |
Director Compensation (Claiborne-specific)
| Year | Director Cash Fees ($) | Notes |
|---|---|---|
| 2023 | $30,000 (included in All Other Compensation) | |
| 2024 | $30,000 (included in All Other Compensation) |
Related Party Transactions and Governance Controls
- Audit Committee oversees related-party transactions and reviews per Item 404; policies codified in charter and Code of Conduct .
- Tony Goodman’s Keswick Group consulting/C-suite transition arrangements; director cash/option awards detailed in proxy .
- Purnovate sale option/FAA with Adovate led by former CEO/director William Stilley; structured cash payments, equity stake, anti-dilution and milestone economics; approved by independent directors .
- UVA LVG license obligations (minimum royalties and milestone payments) and potential distributions to inventor Bankole Johnson via UVA LVG policies .
Performance & Track Record
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| TSR ($ value of $100 initial) | $7.96 | $2.76 | $1.50 |
| Net Loss ($USD) | -12,731,416 | -5,123,341 | -13,197,000 |
| CEO Pay Actually Paid ($) | $594,727 | $575,598 | $823,533 |
- Major career achievements pre-Adial include executing complex transactions: Indivior spin-off, Sucampo sale, and Osiris IPO—skills relevant to capital markets and strategic partnering .
- Company’s pay-versus-performance disclosure indicates compensation decisions not based on SEC-defined financial performance metrics, consistent with clinical-stage orientation .
Compensation Structure Analysis
- Shift toward options/RSUs: CEO received 1,000,000 RSU grant on accession and subsequent sizable option grants (60,000 at $1.35 and 350,000 at $1.15), emphasizing retention and long-term alignment .
- Equity plan share increase (500,000 → 2,000,000) to preserve talent and conserve cash; burn rate/dilution/overhang metrics elevated for a micro-cap biotech, raising overhang concerns .
- Guaranteed vs at-risk: Base salary increased to $450,000 (Aug 2022) and $485,688 in 2024; bonus targets moved from 40% to 50%, with discretion in payouts and accruals .
- Clawback policy adopted for restatements covering incentive-based pay, enhancing governance .
Vesting Schedules and Insider Selling Pressure
- Vesting cadence: Most option awards vest monthly over 36 months; RSUs vest monthly over 36 months .
- Form 4 activity: No Form 4 transactions were identified in company filings; the proxy ownership tables show increases in options scheduled to vest within 60 days, but no disclosed sales by Claiborne in the cited documents .
Employment Terms
- Severance multiples: 12 months base salary on involuntary termination without Cause/for Good Reason; 2x base plus bonus under CoC double-trigger .
- Equity acceleration and extended exercise windows under CoC and on death/disability provide meaningful protection and retention economics .
- Non-compete 24 months; non-solicit/acceptance 12 months; confidentiality 7 years; non-disparagement ongoing .
Risk Indicators & Red Flags
- Low TSR and continued operating losses highlight execution risk and capital needs typical for clinical-stage companies .
- Equity overhang expanded via plan amendment; potential dilution risk for shareholders .
- Related-party consulting arrangements (Keswick/Orbytel) managed under audit controls; continued monitoring warranted .
- Anti-hedging/pledging policy mitigates alignment concerns .
- No disclosed gross-ups; clawback policy in place .
Equity Ownership & Alignment Details
- Vested vs unvested/options: As of Dec 31, 2023, Claiborne held multiple option tranches, many unexercisable and vesting monthly; mix of high-strike legacy grants ($50–$78) and new at-the-money grants ($1.15–$1.35) improves alignment with current price levels .
Board Service History and Committee Roles
- Board service: Director since Nov 2021; Class II director; stands for election at the 2026 annual meeting .
- Committee roles: Claiborne does not serve on audit/compensation/nominating committees (appropriate separation for an executive director) .
- Dual-role implications: As CEO and director, he is non-independent; presence of non-executive Chair and Lead Independent Director with fully independent key committees mitigates CEO-chair concerns .
Say-on-Pay & Shareholder Feedback
- Say-on-pay proposals added in 2024 after emerging growth company status ended; frequency vote recommended at 3 years; actual voting outcomes not provided in cited documents .
Investment Implications
- Alignment: Monthly-vesting RSUs/options and anti-hedge/pledge policy support retention and alignment, but sizeable equity capacity increase raises dilution/overhang risk in a capital-dependent biotech .
- Incentive design: Bonuses largely discretionary without disclosed hard financial metrics, consistent with clinical milestones; investors should track partnering progress and regulatory milestones as de facto performance indicators .
- Contract economics: CoC protections (2x cash plus full acceleration/extended exercise) may influence negotiation dynamics in strategic transactions; base-case severance of 12 months is moderate for micro-cap peers .
- Trading signals: Absence of reported insider selling in the cited period and ongoing scheduled vesting patterns indicate retention focus; monitor future Form 4s and vest cliffs tied to 2022–2025 awards for potential supply overhang .