Mary Luo
Amphastar PharmaceuticalsAbout Mary Luo
Mary Z. Luo, Ph.D., age 75, is Amphastar’s co‑founder (1996) and serves as Chief Operating Officer, Chief Scientist, and Chairman of the Board; she holds a Ph.D. in chemistry from Princeton and completed post‑doctoral research at Caltech . In 2024, Amphastar delivered 13.6% sales growth to $732.0M and GAAP net income of $159.5M (non‑GAAP adjusted net income $200.8M), while the company’s stock declined materially during 2024 (internal metric shows approximately −40% from 12/31/23 to 12/31/24 and pay‑versus‑performance TSR index fell from 320.63 to 192.48) . Luo’s 2024 compensation combined fixed pay, annual incentives tied to sales, filings/approvals, stock price appreciation, and corporate goals, and long‑term options/RSUs that vest over four years .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Amphastar Pharmaceuticals, Inc. | Co‑founder; COO; Chief Scientist; Chairman | 1996–present | Co‑founded Amphastar; leads operations and R&D; board chair and executive oversight |
| Applied Physics & Chemistry Laboratories, Inc. (APCL) | Co‑founder; Chief Operating Officer | 1989–N/D | Built analytical capabilities; APCL is a major shareholder of AMPH |
| California State Polytechnic University, Pomona | Professor emeritus of chemistry | N/D | Academic leadership; scientific credentials supporting R&D oversight |
External Roles
| Organization | Role/Capacity | Years | Notes |
|---|---|---|---|
| APCL (shareholder entity) | Co‑owner (with Dr. Zhang and BLZ Trust) | N/D | APCL holds 6,827,679 AMPH shares; 900,000 pledged as collateral |
Fixed Compensation
| Metric (USD) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary | $907,964 | $732,002 | $746,038 |
| Cash Bonus (proxy “Bonus” column; includes general annual and discretionary) | $309,732 | $309,632 | $314,723 |
| All Other Compensation (benefits/perqs) | $56,355 | $43,009 | $43,930 |
Notes: 2024 approved perqs cap up to $45,000 for Luo (auto, insurance, medical/tax) .
Performance Compensation
Annual Incentives (PBB program; March 2024–Feb 2025 framework)
- Performance metrics and bands: sales growth vs 2023; stock price appreciation; filings (ANDA/NDA/BLA or BLA progress); approvals (ANDA/NDA/BLA); and general corporate goals including relative sales and earnings growth vs peers, BAQSIMI adjusted sales vs forecast, pipeline trial success, and adjusted net income > $145M .
- 2024 achievement summary: Sales growth 13.6% (minimum band); stock price appreciation not achieved (~−40%); one filing (minimum); one approval (minimum); corporate goals achieved at “stretch” (3 of 5 achieved) .
| PBB Component (USD) | Minimum/Target/Stretch/Super‑Stretch Schedule for Luo | 2024 Payout |
|---|---|---|
| Sales Growth vs. 2023 | $42,000 / $52,000 / $65,000 / $78,000 | $42,000 (Minimum) |
| Stock Price Appreciation (12/31/23–12/31/24) | $42,000 / $52,000 / $65,000 / $78,000 | $0 (Not achieved) |
| Filing (ANDA/NDA/BLA or BLA progress) | $42,000 / $52,000 / $65,000 / $78,000 | $42,000 (Minimum) |
| Approval (ANDA/NDA/BLA) | $42,000 / $52,000 / $65,000 / $78,000 | $42,000 (Minimum) |
| General Corporate Goals | $24,000 / $30,000 / $37,000 / $45,000 | $37,000 (Stretch) |
| Total PBB (2024) | — | $163,000 |
- Discretionary bonuses (2024): $85,000 to Luo for pipeline advancement, production efficiencies, and exceeding $100M Primatene MIST sales .
Long‑Term Incentives (Equity)
- 2024 grants (March 4, 2024): 57,109 options (10‑yr term; exercise price $46.68) and 27,110 RSUs; both vest in four equal annual installments beginning March 4, 2025 .
- 2024 intended grant‑date fair values: Options $1,265,512; RSUs $1,265,495; total $2,531,007 .
- 2024 vesting activity: RSUs vested 30,902 shares (value realized $1,358,289); options exercised 310,930 shares (value realized $9,511,349) .
| Equity Award Details (Selected) | Key Terms |
|---|---|
| 3/4/2024 RSUs (27,110) | 4‑yr ratable vest; remaining portion valued $1,006,594 at 12/31/24 ($37.13/share) |
| 3/4/2024 Options (57,109 @ $46.68) | 4‑yr ratable vest; 10‑yr term |
Equity Ownership & Alignment
- Beneficial ownership: Luo and Zhang together beneficially own 12,482,416 AMPH shares (25.1% of outstanding), including 6,827,679 via APCL, 2,423,282 held by Zhang, 1,090,894 held by Luo, and significant vested options (Zhang 1,492,274; Luo 648,287) within 60 days of 3/31/25 .
- Pledging: Of the reported shares, 900,000 (APCL), 600,000 (Zhang), and 500,000 (Luo) are pledged as collateral; company policy prohibits hedging and caps pledging at the lesser of 25% of holdings or 5% of shares outstanding .
- Stock ownership guidelines: CEO 3x salary; other executives 1x salary; all named executives (with >3 years tenure) meet guidelines .
| Snapshot at 12/31/2024 | Count / Value |
|---|---|
| Unvested RSUs (by remaining lots) | 14,223 (v. 3/17/25) $528,100; 16,206 (v. 2025–26) $601,729; 25,725 (v. 2025–27) $955,169; 27,110 (v. 2025–28) $1,006,594 |
| Options – selected exercisable tranches | 211,213 (2017 @ $14.69); 116,392 (2018 @ $21.77); 110,671 (2019 @ $22.25); 181,134 (2020 @ $13.03); 100,189 (2021 @ $17.99) |
| Options – unexercisable outstanding | 33,396 (2021 @ $17.99); 37,392 (2022 @ $34.74); 54,208 (2023 @ $35.13); 57,109 (2024 @ $46.68) |
| 2024 Realized Equity Value | Options: $9,511,349; RSUs: $1,358,289 |
Employment Terms
- Agreement: Initial 3‑yr term with auto one‑year renewals; termination by either party; severance and benefits contingent on qualifying separation and release .
- Severance (non‑CIC): 3x (Luo) of highest base salary + average bonus (3 yrs), plus up to 12 months health premiums and vesting of equity (unless more favorable in award) .
- Change‑in‑Control (within 1 year; double trigger): additional 3x cash; extend health premiums by 12 months; full vesting of all unvested equity outstanding immediately prior to CIC (unless award terms more favorable); 280G best‑net cutback .
| Estimated Payouts if Triggered on 12/31/2024 | Termination Apart from CIC | Termination in Connection with CIC |
|---|---|---|
| Cash Severance | $3,872,887 | $7,745,774 |
| Equity Acceleration | $3,928,575 | $3,928,575 |
| Health Coverage | $7,426 | $14,852 |
| Total | $7,808,888 | $11,689,201 |
Other policies: Clawback for erroneously awarded incentive comp upon restatement caused by gross negligence, intentional misconduct, or fraud; hedging prohibited; pledging capped as noted .
Board Governance
- Roles: Chairman of the Board (non‑independent) and executive (COO/Chief Scientist); Board acknowledges non‑independence and believes her service as Chairman is appropriate given founder expertise .
- Family relationship: Luo (Chairman/COO/Chief Scientist) and Jack Y. Zhang (CEO/President/CSO) are spouses .
- Board structure: 10 directors; majority independent; lead independent director Richard Prins; each director attended ≥75% of meetings; all 10 attended 2024 annual meeting .
- Committee service: Luo (employee‑director) is not listed as a member of audit, compensation, or nominating committees; those committees comprise independent directors .
- Director pay: Employees do not receive director fees or equity for board service .
Compensation Program Design and Governance
- Philosophy and say‑on‑pay: Program emphasizes performance and alignment; 2024 say‑on‑pay approval ~95% .
- Setting process and consultant: Compensation Committee oversees design; retained Willis Towers Watson (WTW) as independent consultant; no conflicts identified .
- Peer group and positioning: 18 biopharma/healthcare peers anchored on revenue and profitability ranges; several changes in 2024 set; senior execs targeted around 75th percentile in certain cases .
- 2024 equity mix: 50% options / 50% RSUs; 4‑yr ratable vest; options 10‑yr term; minimum vesting policy under 2015 plan (≥95% of shares vest ≥1 year) .
Related Party Transactions (Governance Red Flags)
- Hanxin (family‑owned by Luo/Zhang): Contract manufacturing—AMPH recognized ~$460,697 revenue since 1/1/2024; contract research and scale‑up agreements—AMPH paid ~$244,954 since 1/1/2024; BLA development support; agreements extend through July 5, 2025 .
- Letop (owned by son of Zhang/Luo): Three‑year supply agreement; ~$3,091 paid since 1/1/2024 .
- Genreach (wholly owned subsidiary of Hanxin): Exclusive Primatene MIST distribution in Greater China; ~$1.1M revenue since Aug 2024; 10‑yr term with mutual termination right after year two .
Equity Ownership & Director/Officer Trading Signals
| Indicator | Data |
|---|---|
| Beneficial ownership | Combined 25.1% via APCL and direct holdings (Luo/Zhang) |
| Pledging | 500,000 Luo shares pledged; 900,000 APCL; 600,000 Zhang |
| 2024 exercises/vests | Luo exercised 310,930 options ($9.51M realized) and vested 30,902 RSUs ($1.36M) |
| Ownership guidelines | Met by named executives (tenure >3 yrs) |
Director Compensation (for context; Luo as employee receives none)
- Non‑employee director program: $55,000 cash retainer; $260,000 annual equity (50% RSUs/50% options), 1‑yr vest; committee retainers apply; employees not paid for board service .
Expertise & Qualifications
- Education/credentials: Ph.D. in chemistry (Princeton); post‑doc Caltech; professor emeritus (Cal Poly Pomona); named inventor on U.S. and foreign patents .
- Board/leadership: Founder; extensive pharma operations and R&D oversight .
Say‑on‑Pay & Shareholder Feedback
- 2024 say‑on‑pay support ~95%; Compensation Committee retained core design in light of strong support .
Compensation Committee Composition/Independence
- Members: Prins (Chair), Zasloff, Petersen; all independent; chartered authority; WTW as independent advisor .
Performance & Track Record Highlights
- 2024 results: Sales up 13.6% to $732.0M; GAAP net income $159.5M; adjusted net income $200.8M .
- Market performance: Internal PBB shows ~−40% stock price change in 2024; pay‑versus‑performance TSR index decline (320.63→192.48) .
Investment Implications
- Alignment vs risk: Luo’s substantial equity stake (25.1% combined with Zhang) aligns with shareholders but pledging of 500,000 of her shares (plus APCL and Zhang pledges) introduces potential forced‑sale risk in adverse markets despite company caps on pledging and a no‑hedging policy .
- Pay‑for‑performance: 2024 PBB paid only on categories achieved (no payout on stock price metric), while a discretionary bonus recognized BAQSIMI integration, pipeline, and Primatene execution—suggesting balanced use of formulaic and judgmental pay levers .
- Retention/transition: Double‑trigger CIC with 3x cash and full equity acceleration, and sizeable estimated payouts, reduce transition risk but may be scrutinized by governance‑focused investors; 2024 equity grants vest over four years, anchoring retention .
- Governance considerations: Dual executive/Chair structure and spousal CEO/Chairman relationship, plus recurring related‑party transactions with family‑owned entities, elevate governance risk; presence of a lead independent director and independent committees provide some counterbalance .