Andrew Cheng
About Andrew Cheng
Andrew Cheng, M.D., Ph.D., is President & Chief Executive Officer and a Class I director at Akero Therapeutics; he has served as CEO since September 2018 and as director since 2018 (age 58 as of April 10, 2025) . He previously spent nearly 20 years at Gilead Sciences, including serving as Chief Medical Officer and EVP from March–September 2018, with responsibility for HIV clinical development leading to 11 FDA/EMA approvals . Pay-versus-performance disclosures show Akero’s 2024 TSR value of $107.83 for a fixed $100 investment and a 2024 net loss of $252.1 million; CEO compensation actually paid in 2024 was $11.88 million, reflecting equity-driven alignment with shareholder outcomes .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Gilead Sciences, Inc. | Chief Medical Officer & EVP | Mar–Sep 2018 | Led HIV clinical development resulting in 11 FDA/EMA product approvals . |
| Gilead Sciences, Inc. | Various clinical development leadership roles | Not disclosed | Nearly 20-year tenure; extensive multi-therapy area development experience . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Vera Therapeutics, Inc. (Nasdaq: VERA) | Director | Current | External industry insights; governance experience . |
| MorphoSys AG (acquired by Novartis AG) | Director | Prior | Biopharma governance; transaction experience . |
| Arbutus Biopharma (Nasdaq: ABUS) | Director | Prior | Clinical-stage biotech board service . |
| Syntimmune, Inc. (acquired by Alexion) | Director | Prior | Governance during growth and M&A . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 624,000 | 660,000 | 686,000 |
| Target Bonus (%) | 60% | 60% | 60% |
| Actual Bonus Paid ($) | 600,600 | 376,200 | 411,600 |
Performance Compensation
| Incentive Component | Metric | Weighting/Design | Target | Actual/Payout | Vesting / Terms |
|---|---|---|---|---|---|
| Annual cash bonus (2024) | Company goals: SYNCHRONY Phase 3 site activation & enrollment, FDA alignment on Outcomes study endpoints, HARMONY week 96 readout, PPQ manufacturing progress, capital raises | Base goals amount to 100% of target; goals related to SYNCHRONY site activation/enrollment and FDA alignment comprised nearly half of overall weighting | 60% of base salary ($411,600) | Achieved 100%; paid 100% of target ($411,600) | Cash in Dec 2024 |
| Stock options (Dec 16, 2024 grant) | Time-based | Equity mix aligned with retention and shareholder value creation | 295,600 options; exercise price $29.23; FV $6,489,100 | N/A | Vests in 48 equal monthly installments over 4 years from 12/16/2024 |
| RSUs (Dec 16, 2024 grant) | Time-based | Less dilutive, promotes ownership | 98,500 RSUs; FV $2,879,155 | N/A | Vests in 8 equal semi-annual installments over 4 years from 12/16/2024 |
| Prior equity vesting activity (2024) | Option exercises & RSU vesting | Realized value reflects share price at activity date | N/A | Options: 364,538 shares exercised; value realized $5,057,744. RSUs: 35,973 shares vested; value realized $978,162 | Option value realized = (market price - strike) × shares; RSU value realized = shares × market price |
Equity Ownership & Alignment
| Ownership Metric | Value |
|---|---|
| Total beneficial ownership (shares) | 1,542,342 (1.91% of outstanding) |
| Direct common shares | 409,755 |
| Options exercisable within 60 days | 1,132,587 shares |
| RSUs unvested (counts; 12/29/2024 market value at $27.82) | 26,176 ($728,216), 68,656 ($1,910,010), 98,500 ($2,740,270) |
| Unexercisable options outstanding (selected grants) | 65,416 (2011 grant footnote 8), 117,790 (2012 grant footnote 10), 308,952 (2013 grant footnote 11), 295,600 (2024 grant) |
| Hedging/Pledging | Prohibited; no approvals sought by NEOs as of the proxy date |
Notes:
- RSU market values are computed in the proxy using $27.82 closing price on 12/29/2024 .
- Equity grant timing governed by structured process to avoid MNPI; strike set at grant-date close; no opportunistic timing .
Employment Terms
| Provision | Terms |
|---|---|
| Employment status | At will; amended & restated employment agreement effective May 2019 (IPO) |
| Severance (non-CIC) | 12 months base salary + up to 12 months COBRA at employee rate; 12-month post-termination option exercise window |
| Change-in-control (CIC, double-trigger within 12 months) | Lump sum 18 months base salary + 1.5× target bonus; full acceleration of time-based equity; up to 18 months COBRA |
| Estimated CIC payout (as of 12/31/2024) | Cash severance $1,069,500; bonus $641,700; COBRA $83,185; equity acceleration $8,274,260; total $10,068,645 |
| Clawback policy | Adopted Sep 13, 2023; recovers incentive comp tied to financial reporting measures upon restatement within 3 prior years |
| Tax gross-up (280G/4999) | None; no golden parachute tax gross-ups |
| Hedging/Pledging | Prohibited per Insider Trading Policy |
| Deferred comp / Pension | No defined benefit pension; no nonqualified deferred compensation |
Board Governance
- Board service: Class I director; term expires at the 2026 annual meeting .
- Independence: Board determined all directors except Cheng are independent; Cheng is not independent due to executive role .
- Committees: Audit (Henderson, Heyman, Chou, Walmsley; chair Henderson); Compensation (Xu, Walmsley, Iwicki; chair Iwicki); Nominating & Governance (Henderson, Heyman, Xu; chair Heyman). Cheng is not listed on any committee .
- Board leadership: Independent Chair (Mark Iwicki); CEO and Chair roles are separated, reducing dual-role control concerns .
- Attendance: Each director attended at least 75% of Board and committee meetings in 2024 .
- Say-on-Pay: 2024 approval ~95% of votes cast, supporting pay design .
Compensation Structure Analysis
- Year-over-year mix: 2024 equity awards increased vs 2023 for Cheng (Options FV $6.49M; RSUs FV $2.88M in 2024 vs Options $5.98M; RSUs $1.82M in 2023), leaning further into equity leverage tied to stock performance .
- Instruments: Continued mix shift toward time-based RSUs alongside options, reducing dilution and increasing guaranteed ownership build relative to pure options .
- Performance linkage: Annual bonus funded at 100% based on operational milestones (clinical progress, FDA alignment, manufacturing readiness, capital raises), rather than financial metrics—consistent with R&D-stage biotech practice .
- Governance safeguards: Structured grant timing, prohibition on hedging/pledging, clawback compliant with SEC/Nasdaq .
Risk Indicators & Red Flags
- Section 16 compliance: Late Form 4 filing for Andrew Cheng for a 9/10/2024 transaction; subsequently filed (minor administrative issue) .
- Trading pressure: 2024 option exercise of 364,538 shares with $5.06M value realized; RSU vesting of 35,973 shares with $978k value—potential supply overhang to monitor around vest dates and 10b5-1 plans if any .
- Alignment positives: No hedging/pledging; strong say-on-pay support; independent chair structure .
- CIC economics: Double-trigger with significant equity acceleration; monitor retention and transaction incentives .
Compensation Peer Group (Benchmarking)
Peer group used for 2024 benchmarking: 89bio, Aclaris, AnaptysBio, Crinetics, Kura, Madrigal, MannKind, Mirum, Morphic, RAPT, REGENXBIO, Replimune, Syndax, Terns, Tyra, Ventyx, Viking; committee did not target a specific pay percentile .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay approval ~95% supports the current design; committee maintained program structure accordingly .
Equity Grant and Vesting Detail (Selected Awards – Cheng)
| Award | Shares | Exercise Price / Type | Grant Date | Vesting Schedule |
|---|---|---|---|---|
| Stock Options | 295,600 | $29.23 | 12/16/2024 | 48 equal monthly installments over 4 years from grant |
| RSUs | 98,500 | Time-based | 12/16/2024 | 8 equal semi-annual installments over 4 years from grant |
| RSUs | 68,656 | Time-based | 12/08/2023 | 8 equal semi-annual installments over 4 years from vest start |
| RSUs | 26,176 | Time-based | 12/09/2022 | 16 equal quarterly installments over 4 years from vest start |
Ownership Concentration (Context)
- Shares outstanding: 79,679,222 as of April 10, 2025 .
- Top holders include Wellington (9.91%), RTW (8.61%), Janus Henderson (7.57%), General Atlantic (6.57%), BlackRock (5.25%) .
Investment Implications
- Alignment: Cheng’s pay is heavily equity-based with multi-year vesting; prohibition on hedging/pledging and a robust clawback enhance alignment and risk controls .
- Near-term trading signals: Monitor scheduled RSU semi-annual vesting and monthly option vesting; 2024 exercise activity indicates potential periodic supply—assess any 10b5-1 plans and blackout schedules .
- Retention and CIC: Double-trigger CIC package with full time-based equity acceleration could incentivize support for strategic transactions; non-CIC severance provides baseline protection without bonus multiple .
- Governance comfort: Independent chair, strong say-on-pay, independent committees, and no tax gross-ups reduce governance risk; minor Section 16 timing issues appear administrative .
- Performance lens: Bonus metrics tied to clinical execution and financing milestones—continued value creation hinges on Phase 3 SYNCHRONY outcomes and regulatory alignment; pay-versus-performance shows equity value sensitivity to TSR .