David Watson

About David Watson

David Watson is General Counsel and Secretary at Apellis Pharmaceuticals (APLS), serving since January 2014; he is 52 years old and holds an A.B. from Harvard College, a J.D. from Vanderbilt Law School, and an M.A. in Mathematics from the University of Kentucky . Watson’s annual cash bonus for 2024 paid out at 90.74% of target based on pre-set corporate goals spanning product revenues, regulatory objectives, clinical results, candidate advancement, and operational effectiveness . In 2025, Apellis shifted executive long-term incentives to a 50/50 mix of PSUs and RSUs, with PSUs tied to relative TSR percentiles versus NASDAQ biotech peers over 1-, 2-, and 3-year windows (payouts at 50%/100%/200% of target at 25th/55th/90th percentiles; capped at 100% for negative TSR), aligning pay directly with shareholder outcomes . The proxy discloses no material legal proceedings involving Watson .

Past Roles

External Roles

No external public-company board memberships or committee roles for David Watson are disclosed in the proxy .

Fixed Compensation

Multi-year compensation (Summary Compensation Table):

Annual cash incentive details:

Key program terms and benefits/perqs:

• All other compensation includes life insurance premiums and 401(k) contributions; Apellis provides broad-based benefits and does not offer defined benefit pension or nonqualified deferred compensation arrangements .
• Perquisites for named executive officers were below $10,000 in 2024; 401(k) company matching equals 50% of the first 10% of eligible contributions .

Performance Compensation

2024 equity awards and vesting:

Option exercises and stock vested in 2024:

2025 long-term incentive design (approved January 2025):

2025 approved equity awards for Watson:

Corporate performance metrics linked to 2024 cash incentive:

• Metrics covered: net product revenues for EMPAVELI and SYFOVRE; regulatory milestones; positive Phase 3 (C3G/IC-MPGN); advancement of candidates including APL-3007; operational efficiency and scalability .
• Payout determination: Corporate performance factor set at 90.74%; committee did not make individual adjustments .

Equity Ownership & Alignment

Beneficial ownership (as of March 31, 2025; total shares outstanding 125,659,426):

Outstanding equity awards (as of December 31, 2024):

• RSUs (unvested) and market value
  • 23,748 units granted 1/16/2024; market value $757,799
  • 40,092 units granted 1/12/2023; market value $1,279,336
  • 17,969 units granted 1/21/2022; market value $573,391
  • 1,875 units granted 1/28/2021; market value $59,831
• Stock options (selected grants; vesting 25% after 1 year then monthly to year 4; 10-year term)

  Grant Date	Exercisable (#)	Unexercisable (#)	Exercise Price	Expiration
  1/16/2024	—	34,533	$66.30	1/15/2034
  1/12/2023	18,068	19,640	$52.66	1/11/2033
  1/21/2022	37,166	13,808	$35.46	1/20/2032
  1/28/2021	44,062	938	$44.90	1/27/2031
  2/10/2020	38,250	—	$44.33	2/9/2030
  2/16/2018	14,888	—	$14.95	2/15/2028

Alignment policies:

• Stock ownership guidelines: CEO 6x salary; other executives 1–3x salary by title; compliance required within five years; all directors and executive officers met criteria at implementation and as of Dec 31, 2024 .
• Hedging/pledging restrictions; Audit Committee may grant pledge exceptions only if the individual demonstrates capacity to repay without resort to pledged securities .
• 10b5-1 trading plans may be used; trades may also occur outside of plans when not in possession of MNPI .

Employment Terms

Severance (Separation Benefits Plan):

Contract terms and restrictive covenants:

• No individual employment agreement disclosed for Watson; covered by company-wide separation benefits plan .
• Confidentiality, inventions, non-solicitation, and non-competition agreements: one-year non-compete and non-solicit post-termination; protection of confidential information; assignment of related IP to the company .
• Clawback policy enables recovery of excess incentive-based compensation from accounting restatements or activity causing serious financial/reputational damage .

Investment Implications

• Pay-for-performance alignment: 2025 shift to 50% PSUs tied to relative TSR introduces stronger linkage to shareholder returns and provides multi-horizon performance measurement; RSUs balance retention over four years . This reduces windfalls from stock-only appreciation and could temper dilution by conditioning half the LTI on TSR ranks .
• Retention and separation economics: Double-trigger acceleration and 12 months base + 100% target bonus on CoC are competitive but not excessive; standard not-for-cause terms are nine months base and COBRA, suggesting manageable retention risk without outsized golden parachutes .
• Insider selling pressure: 2024 vesting of 25,817 shares ($1.74M) and modest option exercises (3,762 shares; $177k value) indicate ongoing liquidity events; presence of 10b5-1 plans can systematize sales but does not eliminate supply risk around vest dates .
• Skin-in-the-game: Beneficial ownership of 296,700 shares, including 174,120 options exercisable within 60 days, is less than 1% of outstanding shares; adherence to stock ownership guidelines is positive for alignment, and pledging is restricted with limited exceptions .
• Execution context: 2024 bonuses paid at 90.74% reflect mixed outcomes (revenue threshold achieved; EMA non-approval for SYFOVRE; strong Phase 3 data; program advancement and operational objectives met), indicating incentive calibration to balanced scorecards rather than single metrics .