Cedric Francois
Apellis PharmaceuticalsAbout Cedric Francois
Cedric Francois, M.D., Ph.D., is co‑founder, President and CEO of Apellis (since 2009) and a Class III director (age 52). He trained in pediatric and transplant surgery and served on the first successful hand transplantation team; he holds an M.D. from KU Leuven and a Ph.D. in Physiology from the University of Louisville . Under his leadership, Apellis generated $781.4 million in FY2024 revenue (+97% YoY), driven by EMPAVELI and SYFOVRE; the company also secured a $475 million credit facility and advanced its pipeline (e.g., VALIANT Phase 3 in C3G/IC‑MPGN) . The proxy does not disclose TSR or EBITDA growth figures; beginning in 2025, long-term equity adds PSUs tied to relative TSR vs the NASDAQ Biotechnology Index (cap at target if absolute TSR is negative) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Apellis Pharmaceuticals | Co‑Founder; President & CEO; Director | 2009–present | Built complement biology platform; commercialized EMPAVELI and SYFOVRE; scaled org and pipeline . |
| Potentia Pharmaceuticals | Co‑Founder; President & CEO | 2001–2018 | Predecessor entity to Apellis; assets acquired by Apellis (2015) . |
| Revon Systems | Co‑Founder | 2014–2019 | Healthcare software startup; executive experience beyond biotech . |
| Academic/Clinical (hand/face transplant teams) | Research team member | Prior to Apellis | Pioneering reconstructive transplant work underscoring medical depth . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Liberate Medical, Inc. (private) | Director | 2016–present | Medtech board service (private) . |
| Acuamark Diagnostics (private) | Director | 2021–present | Diagnostics board service (private) . |
Fixed Compensation
| Year | Base Salary ($) | Target Bonus (% of Salary) | Target Bonus ($) | Actual Bonus ($) | Payout vs Target |
|---|---|---|---|---|---|
| 2024 | 800,000 | 80% | 640,000 | 580,736 | 90.74% |
| 2025 | 825,000 | 80% | 660,000 | — | — |
Performance Compensation
- Annual cash incentive (2024): Corporate scorecard based on net product revenue for EMPAVELI/SYFOVRE, regulatory milestones, positive VALIANT Phase 3 topline (C3G/IC‑MPGN), pipeline progress (e.g., APL‑3007), and operational objectives; payout at 90.74% of target .
- Long-term incentives (2025 refresh): 50% PSUs and 50% RSUs; PSUs vest on relative TSR vs NASDAQ Biotechnology Index with 50% payout at 25th percentile, 100% at 55th, 200% at 90th; negative absolute TSR caps payout at 100%; three discrete periods (1‑yr 2025, 2‑yr 2025–26, 3‑yr 2025–27) .
| Plan | Metric | Weighting | Target | Actual/Payout | Vesting Mechanics |
|---|---|---|---|---|---|
| 2024 STI | Corporate performance (revenue, regulatory, clinical, pipeline, ops) | Not disclosed | 80% of salary | 90.74% of target | Cash paid Feb 2025 |
| 2025 PSU | Relative TSR vs NBI | 50% of LTI value | 55th percentile = 100% | 50–200% scale; capped at 100% if absolute TSR negative | Three tranches: 1‑yr, 2‑yr cum., 3‑yr cum.; vest on post‑period anniversaries subject to service |
| 2025 RSU | Time-based | 50% of LTI value | N/A | N/A | 25% per year over 4 years |
Equity Awards and Vesting
| Grant Year | Instrument | Shares/Units | Exercise Price | Vesting Schedule |
|---|---|---|---|---|
| 2024 | RSU | 72,094 | — | 25% on 1st anniversary; then annually (4‑yr) |
| 2024 | Stock Options | 104,834 | $66.30 | 25% at 1‑yr; then 36 equal monthly installments (4‑yr total) |
| 2025 | PSU (target) | 130,662 | — | Relative TSR as above; 3 performance periods |
| 2025 | RSU | 130,662 | — | 25% annually over 4 years |
Additional context:
- Outstanding unvested RSUs at 12/31/24 (and grant‑date breakdown): 72,094 ($2,300,520 at $31.91), 62,586 ($1,997,119), 60,076 ($1,917,025), 6,250 ($199,438); aggregate ~$6.41m .
- Options with exercise prices < $31.91 (in‑the‑money) as of 12/31/24 include 273,779 @ $13.85; 273,312 @ $14.95; 175,538 @ $4.31; 8,840 @ $3.76; total 731,469 shares (all listed as exercisable) . Options with strikes of $35.46–$66.30 were out‑of‑the‑money at $31.91 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 3,039,755 shares (2.4% of 125,659,426 outstanding as of 3/31/25) . |
| Vested vs unvested (12/31/24) | See outstanding table: multiple tranches of exercisable options and unvested RSUs as above . |
| Stock ownership guidelines | CEO must hold ≥6x base salary; all directors/executives were in compliance as of 12/31/24 . |
| Hedging/pledging | Hedging and margin/pledge generally prohibited; audit committee may approve pledge exceptions (one director permitted in 2024). No pledging by Francois disclosed . |
| Alignment features | Majority of pay at‑risk; 2025 shift to 50% PSUs to strengthen pay-for-performance . |
Employment Terms
| Scenario | Cash Severance | Bonus | Benefits | Equity Treatment |
|---|---|---|---|---|
| Termination without cause (no CoC; CEO) | 12 months base salary | — | Company portion of COBRA for 12 months | — |
| Termination without cause or good reason within 12 months of CoC (CEO) | Lump sum 18 months base salary | 150% of target bonus (lump sum) | COBRA for 18 months; outplacement | 100% vesting of time‑based equity awards (performance awards per terms) |
| Legacy acceleration | Options granted prior to Jan 1, 2020 fully vest upon a change in control; post‑2019 awards subject to double‑trigger under plan (per prior proxies) . | |||
| Clawback | Dodd‑Frank compliant recoupment; up to 100% recovery in cases of misconduct/fraud or serious financial/reputational damage . | |||
| Tax gross‑ups | None for 280G/4999 . |
Board Governance and Service
- Board role: Director since 2009; Class III term expires at 2026 annual meeting. Not independent (CEO); does not receive additional director compensation .
- Chair and independence: Board Chair is independent (Gerald Chan); CEO and Chair roles are separated; majority of directors are independent (all except Francois) .
- Committees: Francois serves on none; committee composition and chairs are fully independent (Audit, Compensation, Compliance, Nominating & Governance) .
- Attendance: Board met 7 times in 2024; all directors attended ≥75% of meetings; independent directors met in executive session 5 times .
Board service implications: Dual role as CEO/director is mitigated by an independent Chair and fully independent key committees; Francois is not considered independent under Nasdaq rules .
Director Compensation (for Francois as Director)
- No additional compensation is paid to Francois for board service; director fees and equity apply only to non‑employee directors .
Compensation Structure Analysis
- Mix and evolution: Heavy equity orientation; 2024 LTI delivered via options + RSUs; 2025 shifts to 50% PSUs with relative TSR to sharpen alignment and add downside cap when absolute TSR is negative .
- Cash vs equity and at‑risk pay: Base increased 3.1% for 2025 to $825k; 2024 STI paid below target (90.74%), consistent with threshold revenue attainment and mixed regulatory outcomes (e.g., EMA non‑approval noted in committee’s evaluation) .
- Peer benchmarking: Committee targets ~50th percentile vs a 14‑company biotech peer group; 2025 peer set refreshed (adds Axsome, Biocryst, Madrigal; removes Exelixis, Sarepta, United Therapeutics) .
- Governance features: Robust clawback; no option repricing; no 280G/4999 gross‑ups; hedging/pledging restricted; ownership guidelines in place and in compliance .
Say‑on‑Pay & Shareholder Feedback
- 2024 Say‑on‑Pay support: 89.9% of votes cast supported NEO compensation; the committee maintained its general approach with enhancements (2025 PSU program) aligned to shareholder preferences .
Performance & Track Record Highlights
- FY2024 revenue: $781.4 million (+97% YoY); U.S. net product revenue from EMPAVELI and SYFOVRE totaled $710 million; more than 510,000 SYFOVRE doses delivered since launch through YE2024 .
- Clinical/regulatory: Positive VALIANT Phase 3 topline in C3G/IC‑MPGN; FDA accepted sNDA with Priority Review (PDUFA 7/28/2025) .
- Capital: Up to $475 million non‑dilutive facility; eliminated $366 million of cash payments via SFJ liability buyout .
Compensation & Ownership Detail Tables
Multi‑Year CEO Compensation (from Summary Compensation Table)
| Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2024 | 793,193 | 580,736 | 4,779,832 | 4,787,768 | 15,922 | 10,957,451 |
| 2023 | 734,539 | 694,688 | 4,394,319 | 4,542,373 | 7,130 | 10,373,049 |
| 2022 | 680,827 | 512,380 | 4,260,590 | 3,744,353 | 5,406 | 9,203,556 |
CEO Beneficial Ownership (as of March 31, 2025)
| Holder | Shares | % Outstanding |
|---|---|---|
| Cedric Francois | 3,039,755 | 2.4% |
Risk Indicators & Red Flags
- Clawback policy enhanced in December 2023; active hedging/pledging prohibitions (with limited pledge exceptions via Audit Committee) .
- No tax gross‑ups for golden parachutes; no option repricing; ownership guidelines enforced .
- 2024 STI paid below target; indicates discipline tied to metric attainment .
Compensation Committee Analysis (Process/Peer Group)
- Independent advisor: Pay Governance; pay targeted to ~50th percentile; peer group updated to reflect Apellis scale and product profile .
- Committee members (all independent): O’Brien (Chair), Fonteyne, Machiels; Walbert added March 2025 .
Board Governance (Committees, Attendance, Independence)
| Committee | Members (2024/early‑2025) | Chair | Notes |
|---|---|---|---|
| Audit | Machiels; Dunlop; Fonteyne; Wheeler effective May 2025 | Machiels | Financial experts: Machiels and Wheeler . |
| Compensation | O’Brien; Fonteyne; Machiels; Walbert (Mar 2025) | O’Brien | Six meetings in 2024 . |
| Compliance | Dunlop (to Mar 2025); Fonteyne; Machiels; O’Brien; Walbert (Mar 2025) | Fonteyne | Four meetings in 2024 . |
| Nominating & Gov. | Chan; Dunlop; O’Brien; Walbert (Mar 2025) | Chan | One meeting in 2024 . |
Governance context: Chair independent; CEO/Chair separated; majority independent; independent executive sessions held five times in 2024; all directors ≥75% attendance .
Additional Governance/Interlocks
- Morningside Venture Investments held ~10.2% as of 3/31/25; Board Chair Gerald Chan is co‑founder of Morningside; board independence affirmed per Nasdaq (Francois not independent) .
Investment Implications
- Alignment: 2025 introduction of 50% PSUs tied to relative TSR (with negative‑TSR cap) strengthens pay-for-performance alignment; ownership guidelines and hedging/pledging limits enhance alignment and reduce downside governance risk .
- Retention and supply dynamics: Significant unvested RSUs (~$6.4m at 12/31/24) and scheduled 4‑year vesting create ongoing retention hooks but also potential periodic selling pressure around vest dates; older deep‑in‑the‑money options (≈731k) incentivize long‑term stock price appreciation .
- Downside protection/CIC economics: Double‑trigger CIC with 18 months salary + 150% bonus and full time‑based equity acceleration is market‑standard but meaningful; no 280G gross‑ups and a robust clawback mitigate excess risk .
- Governance balance: CEO is also a director but not Chair; independent Chair and fully independent key committees mitigate dual‑role concerns; strong 2024 say‑on‑pay (89.9%) indicates investor support for current design .
Overall, Francois’s package is increasingly performance‑weighted (2025 PSU overlay), with solid ownership alignment and standard CIC protections; watch calendar‑driven vesting windows for potential insider selling pressure and monitor TSR performance relative to the biotech index to gauge forward PSU realizability .