David M. Reese
Executive Vice President and Chief Technology Officer at AMGN
Executive
About David M. Reese
Executive Vice President and Chief Technology Officer at Amgen. Appointed effective December 2023; role includes accelerating the use of technology and artificial intelligence across the organization and leadership of the Global Medical function . 2024 incentive outcomes reflect strong company execution: annual cash incentive plan paid at 138.4% of target based on revenue, non‑GAAP net income, pipeline, and priorities , and 2022–2024 performance units paid out at 73.3% of target with TSR modifier applied . Company performance context for 2024: total revenues grew 19% YoY; Amgen invested $6.0B in R&D, $1.1B in capex, reduced debt by $4.5B, and returned $5.0B to shareholders (including $4.8B in dividends) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Amgen | EVP & Chief Technology Officer | Dec 2023–Present | Mandate to accelerate technology and AI across Amgen; oversight of Global Medical |
| Amgen | EVP, Research & Development | Pre–Dec 2023 | Led R&D prior to transition to CTO role |
External Roles
- Not disclosed in the latest proxy statements for Dr. Reese.
Fixed Compensation
| Metric (USD) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary | $1,158,846 | $1,212,823 | $1,268,615 |
| Target Bonus % of Base | 100% | 100% | 100% |
| Target Bonus ($) | — | $1,211,104 | $1,257,096 |
| Actual Annual Incentive Paid | $1,397,000 | $1,929,000 | $1,740,000 |
Performance Compensation
- Annual incentive design (GMIP): 60% Deliver Results (30% Revenues, 30% non‑GAAP net income), 30% Progress Innovative Pipeline, 10% Deliver Annual Priorities; 2024 composite score 138.4% .
| 2024 GMIP Metric | Weight | Target | Actual Result | Payout/Score |
|---|---|---|---|---|
| Revenues | 30% | 100% | 103.3% | 31.0% |
| Non‑GAAP Net Income | 30% | 100% | 107.0% | 32.1% |
| Advance Early Pipeline | 10% | 100% | 176.4% | 17.6% |
| Execute Key Clinical Studies/Regulatory Filings | 20% | 100% | 178.4% | 35.7% |
| Sustainability | 5% | 100% | 214.6% | 10.7% |
| Successful Integrations & Collaborations | 5% | 100% | 225.0% | 11.3% |
| Final Composite Score | — | 100% | — | 138.4% |
- Long‑term incentive (PSUs): three‑year performance on non‑GAAP EPS growth and ROIC (averaged annually), modified by relative TSR vs S&P 500 by ±30 points; payout capped at target if absolute TSR < 0% .
| PSU Performance Period | Weighting/Design | Outcome | Shares Earned (Reese) |
|---|---|---|---|
| 2021–2023 | EPS and ROIC (annual), TSR modifier | 120.4% payout | 12,508 |
| 2022–2024 | EPS and ROIC (annual), TSR modifier | 73.3% payout | 7,330 |
- 2024 PSU maximum valuation sensitivity (grant-date modeling): If operating metrics at max and TSR at target: $4,079,623; if both operating and TSR at max: $4,799,708 .
Equity Award Grants and Vesting
| Grant Year | Grant Date | Instrument | Target/Granted | Exercise Price | Vesting/Expiry |
|---|---|---|---|---|---|
| 2024 | May 7, 2024 | Performance Units (2024–2026) | 7,462 units | — | Earned 0–200% after 3 years; TSR modifier |
| 2024 | May 7, 2024 | RSUs | 3,196 units | — | No vesting Year 1; then ~33%, 33%, 34% on 2nd–4th anniversaries |
| 2024 | May 7, 2024 | Stock Options | 20,767 options | $300.30 | Vest over 4 years (no vest Year 1; ~33/33/34% on 2nd–4th); 10‑year term |
| 2023 | May 2, 2023 | Performance Units (2023–2025) | 8,911 units | — | As above (EPS, ROIC, TSR) |
| 2023 | May 2, 2023 | RSUs | 3,814 units | — | As above (33/33/34%) |
| 2023 | May 2, 2023 | Stock Options | 32,250 options | $235.97 | As above; 10‑year term |
Outstanding equity at 12/31/2024:
- Unvested/unexercised options (selected strikes/expiries): 20,767 @ $300.30 exp. 5/7/2034; 32,250 @ $235.97 exp. 5/2/2033; 21,318 @ $230.92 exp. 5/2/2032; 11,826 @ $239.64 exp. 4/30/2031; plus earlier tranches (29,050 @ $236.36 exp. 5/5/2030; 39,382 @ $177.31 exp. 5/3/2029; 7,807 @ $177.46 exp. 4/27/2028; 8,714 @ $162.60 exp. 5/1/2027; 8,711 @ $156.35 exp. 5/3/2026) .
- Unvested RSUs: 11,690 units (market value $3,046,882 at 12/31/2024) .
- Unearned PSUs outstanding: 7,631 (2024–2026) and 18,853 (2023–2025) with respective valuation per proxy methodology .
Equity Ownership & Alignment
| Ownership Metric (as of Mar 24, 2025) | Value |
|---|---|
| Total Common Stock Beneficially Owned | 184,604 |
| Shares Acquirable Within 60 Days | 155,678 |
| RSUs Included in “Acquirable” | 4,302 |
| Stock Options Included in “Acquirable” | 151,376 |
| Ownership % of Outstanding Shares | <1% (none of NEOs/directors exceed 1%) |
- Stock ownership guidelines: EVPs required to hold 3x base salary; all executives subject to the guidelines were in compliance in 2024; holdings now include unvested RSUs (effective Jan 1, 2025) .
- Hedging/pledging: Company policy prohibits hedging, pledging, and margin purchases; no single‑trigger equity vesting on change of control .
Vesting and potential selling pressure:
- Regular equity grant timing two business days after quarterly earnings; most RSU/option grants vest in three annual installments starting on second anniversary (i.e., typical vesting events in early May for 2022–2024 grants) .
- In 2024, Dr. Reese had 16,676 shares vest or be paid (RSUs and performance units); no option exercises reported for NEOs in 2024 .
Employment Terms
- No individual employment agreements; Company does not provide change‑of‑control tax gross‑ups; no single‑trigger vesting for RSUs/options .
- Change‑of‑Control (CoC) Severance Plan (double‑trigger): cash severance equal to 2x (base salary + target annual bonus), up to 18 months of COBRA, and a supplemental retirement contribution; RSUs/options vest in full only upon qualifying termination within 24 months post‑CoC; PSUs are earned on a truncated performance basis as specified; plan includes forfeiture of benefits for solicitation of employees/confidentiality breaches; plan auto‑renews annually .
Estimated potential payments for Dr. Reese (assuming trigger on 12/31/2024):
| Trigger | Cash Severance | Unvested Options (intrinsic) | Unvested RSUs | PSU Value (2024–26) | PSU Value (2023–25) | COBRA (18 mo) | Retirement Contributions | Total |
|---|---|---|---|---|---|---|---|---|
| Change in Control (no termination) | $0 | $0 | $0 | $1,978,779 | $3,532,975 | $0 | $0 | $5,511,754 |
| CoC + Qualifying Termination | $5,064,000 | $1,677,524 | $3,046,882 | $1,978,779 | $3,532,975 | $52,097 | $511,400 | $15,863,657 |
| Retirement | $0 | $1,677,524 | $3,046,882 | $1,428,047 | $2,532,900 | $0 | $0 | $8,685,353 |
| Death or Disability | $0 | $1,677,524 | $3,046,882 | $1,428,047 | $2,532,900 | $0 | $0 | $8,685,353 |
Clawbacks/recoupment:
- Mandatory clawback of erroneously awarded incentive-based compensation (no‑fault) and equity recoupment/forfeiture for misconduct causing serious financial or reputational harm; disclosure of recoveries contemplated .
Compensation Structure Analysis
- Cash vs equity mix: For NEOs, the largest component is performance‑based equity; annual LTI mix maintained at 80% performance‑based (50% PSUs, 30% stock options) and 20% RSUs—reinforcing long‑term alignment and retention .
- Targets and difficulty: PSU design uses pre‑established three‑year EPS and ROIC targets, with relative TSR modifier; TSR cannot increase payout above target if absolute TSR is negative, adding downside protection .
- Annual plan (GMIP) uses objective financial targets (revenues and non‑GAAP net income) and pipeline/priority scores; 2024 payout reflected above‑target financial and operational execution (138.4%) .
- Governance features: no single‑trigger vesting, no tax gross‑ups (other than relocation), robust stock ownership/retention rules, prohibition of hedging/pledging, and formal compensation risk assessment .
Say‑on‑Pay, Peer Benchmarks, and Shareholder Feedback
- The 2025 proxy cites a positive 2024 Say‑on‑Pay outcome and ongoing investor engagement; market median is used as a reference point in setting NEO pay; CTO role lacks direct market comps and is aligned to other EVP roles for calibration .
Equity Ownership & Alignment Policies (Summary)
- EVP stock ownership requirement: 3x base salary; officers who are not yet compliant must retain net shares from vesting/exercise until they meet their requirement; all expected executives were in compliance as of 2024; effective Jan 1, 2025, unvested RSUs count toward compliance .
- Prohibition on hedging, pledging, and margin purchases; no single‑trigger vesting in CoC .
Investment Implications
- Alignment: Reese’s pay is highly performance‑weighted (PSUs and options) with objective multi‑year metrics (EPS growth, ROIC) and a relative TSR modifier, plus strict ownership/retention and no hedging/pledging—strongly aligning outcomes with shareholders .
- Retention and overhang: Significant unvested RSUs/options and multi‑year PSUs create ongoing retention hooks; typical vesting events in early May may create periodic liquidity windows, though 2024 shows no option exercises and 16,676 vested shares/payments for Reese .
- Downside protection/governance: Double‑trigger CoC terms (2x cash), robust clawbacks, and no single‑trigger vesting or gross‑ups reduce windfall risk and adverse optics .
- Performance linkage: 2024 annual payout (138.4%) and 2022–2024 PSU payout (73.3%) demonstrate pay moving with objective performance (revenue and earnings expansion vs lower three‑year non‑GAAP operating averages), supporting pay‑for‑performance .
Overall, Reese’s package emphasizes long‑term equity and technology/AI execution accountability, with shareholder‑friendly guardrails. Watch for May‑cycle vesting events and multi‑year PSU outcomes as potential signals for future realized pay and any incremental selling pressure tied to vesting schedules .