Joseph Payne
About Joseph Payne
Joseph E. Payne is President and Chief Executive Officer of Arcturus Therapeutics Holdings Inc., serving since March 2013; he is 53 years old, holds a B.S. in Chemistry (magna cum laude) from Brigham Young University, an M.S. in Synthetic Organic Chemistry from the University of Calgary, and Executive Training Certification from MIT Sloan School of Management . He brings 20+ years of drug discovery experience across Merck Research Labs, DuPont Pharmaceuticals, Bristol-Myers Squibb, Kalypsys, and Nitto Denko, with 40+ publications/patents and several IND candidates . Company pay-versus-performance disclosures show cumulative TSR values of $399.08 (2020), $340.48 (2021), $156.03 (2022), $290.06 (2023), and $156.12 (2024) per $100 initial investment and Net Income of $(72.1)M (2020), $(203.7)M (2021), $9.3M (2022), $(29.7)M (2023), and $(80.9)M (2024) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Merck Research Labs | Drug discovery/leadership roles | Not disclosed | Discovery experience contributed to RNA medicines and lipid-mediated delivery capabilities |
| DuPont Pharmaceuticals | Drug discovery | Not disclosed | Contributed to portfolio of development efforts and IND candidates |
| Bristol-Myers Squibb | Drug discovery | Not disclosed | Advanced therapeutics development expertise |
| Kalypsys | Drug discovery | Not disclosed | Added small-molecule discovery depth |
| Nitto Denko | Drug delivery leadership (Group Leader/Chief Scientist) | Not disclosed | Led polymeric RNAi research; strengthened nanoparticle delivery technology |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Vallon Pharmaceuticals Inc. | Director | Until April 2023 | Governance oversight for CNS-focused public clinical-stage company |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 630,000 | 698,000 | 695,000 |
| Target Bonus (% of Salary) | 60% | 60% | 60% |
| Actual Cash Bonus ($) | 504,000 | 208,500 | 367,000 |
| Total Compensation ($) | 5,594,000 | 4,892,500 | 3,697,000 |
Performance Compensation
- Short-term incentives: CEO target set at 60% of base salary ($417,000 for 2024), with payout determined qualitatively against annual corporate objectives; 2024 payout was 88% of target for Mr. Payne .
- Program design: Corporate objectives included pipeline milestones for ARCT-810 and ARCT-032, partnered vaccine progress (KOSTAIVE approvals/data, seasonal and pandemic flu milestones), collaboration/operations execution, and non-dilutive funding targets; objectives were not formally weighted and payouts used judgment-based assessments .
- Long-term incentives: Stock options only (no RSUs), multi-year vesting; options inherently performance-based and deliver value only if stock price increases; equity grant values were set below peer median in 2024 .
| Incentive Component | Metric | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Annual Cash Bonus (2024) | Company objectives (pipeline, vaccines, funding, operations) | 60% of salary | Achieved with multiple milestones (e.g., KOSTAIVE JP/EU approvals; CF/OTC progress) | 88% of target | N/A (cash) |
| Option Grant (Dec-2024) | Time-based vesting | 196,000 options @ $16.24 | Grant made 12/16/2024 | Fair value $2,635,000 (ASC 718) | 25% at 1-year, then 36 monthly installments |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 2,297,597 shares; 8.2% of outstanding |
| Shares Outstanding (Record Date) | 27,120,603 (April 14, 2025) |
| Vested/Exercisable Options | 817,500 shares exercisable within 60 days of April 8, 2025 |
| Unvested/Unexercisable Options | 433,500 shares subject to vesting (excluded from beneficial ownership count) |
| Pledging/Hedging | Company policy prohibits hedging and pledging; short sales banned |
| Ownership Guidelines | Not disclosed for executives in proxy |
Outstanding Options (Joseph Payne as of 12/31/2024)
| Exercisable (#) | Unexercisable (#) | Strike ($) | Expiration |
|---|---|---|---|
| 120,000 | — | 8.00 | 8/24/2028 |
| 60,000 | — | 4.99 | 2/7/2029 |
| 100,000 | — | 14.12 | 2/18/2030 |
| 175,000 | — | 99.29 | 12/18/2030 |
| 112,500 | 37,500 | 34.57 | 12/10/2031 |
| 125,000 | 125,000 | 16.92 | 12/9/2032 |
| 50,000 | 150,000 | 28.88 | 12/15/2033 |
| — | 196,000 | 16.24 | 12/16/2034 |
| Note: Unexercisable options vest 25% at 1-year from grant, then monthly over 36 months . No option exercises by NEOs in 2024 . |
Employment Terms
| Term | CEO (Joseph Payne) |
|---|---|
| Employment Agreement | Dated June 13, 2019 |
| Base Salary | $695,000 (bi-monthly) |
| Target Bonus | Up to 60% of base salary (Board/Comp Committee determined) |
| Severance (no CoC) | 18 months of base salary; pro rata annual bonus (as determined); up to 18 months COBRA |
| Change-of-Control (double trigger) | Lump sum: 18 months base; target annual bonus; pro rata target bonus; up to 18 months COBRA; full acceleration of unvested time-based equity upon qualifying termination |
| Severance Policy | Company-wide Severance Policy adopted Apr/May 2021, double-trigger equity acceleration within 18 months post-CoC |
| Clawback | Nasdaq-compliant compensation recovery policy tied to accounting restatements (3-year lookback) |
| Non-compete / Non-solicit | Severance Policy requires non-solicitation and non-disparagement covenants as condition to severance |
Potential Payments (as of 12/31/2024)
| Scenario | Cash Severance ($) | Health & Welfare ($) | Equity Acceleration ($) |
|---|---|---|---|
| Involuntary termination without cause / resignation for good reason (no CoC) | 1,409,500 | 13,700 | — |
| Involuntary termination without cause / resignation for good reason with CoC | 1,409,500 | 13,700 | 7,356,495 |
Board Governance
- Role: President, CEO, and Director since March 2013; not independent due to executive role .
- Committees: Not listed as a member of the Audit, Compensation, or Nominating & Corporate Governance committees; those committees are comprised of independent directors .
- Leadership Structure: Board chair role is separate from CEO; Chair transitions from Dr. Peter Farrell to Dr. Moncef Slaoui effective July 1, 2025, maintaining separation of chair/CEO roles and mitigating dual-role concerns .
- Attendance: Board held six meetings in 2024; each director attended at least 75% of applicable meetings/committees .
Compensation Committee Analysis
- Committee: Dr. Magda Marquet (Chair), Dr. Jing L. Marantz, James Barlow; all independent, non-employee directors .
- Consultant: Uses independent compensation consultant (F.W. Cook), with independence assessed and no other services provided .
- Peer Groups: Reviewed 2024 peer set including ACADIA, Blueprint, Dynavax, Insmed, Ironwood, Novavax, PTC, Travere, Ultragenyx, Vanda, Vir, etc.; decisions not targeted to a specific percentile .
- Practices: No option repricing without shareholder approval; double-trigger CoC; modest perquisites; no guaranteed future comp; no pension/SERP; hedging/pledging prohibited .
Say-on-Pay & Shareholder Feedback
- 2024 Say-on-Pay approval: approximately 94.9% support; committee reaffirmed program design .
Related Party Transactions and Risk Indicators
- Related party transactions: None >$120,000 in 2024 beyond standard compensation arrangements .
- Option repricing: Prohibited under equity plans .
- Hedging/pledging: Prohibited by policy .
- Clawback: Adopted and disclosed .
- Section 16 compliance: All officers/directors/10% holders complied in 2024 .
- Insider selling: No NEO option exercises in 2024 (reduces near-term technical selling supply from exercise-driven liquidity) .
Performance & Track Record
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Company TSR (Value per $100 start) | 399.08 | 340.48 | 156.03 | 290.06 | 156.12 |
| Peer Group TSR (Value per $100 start) | 125.69 | 124.89 | 111.27 | 115.42 | 113.84 |
| Net Income ($ Millions) | (72.1) | (203.7) | 9.3 | (29.7) | (80.9) |
Highlights tied to compensation context:
- First commercial sales of KOSTAIVE in Japan (Oct 2024) and EU approval (Feb 2025), validating platform; multiple clinical initiations in influenza (seasonal/pandemic), CF (ARCT-032) and OTC deficiency (ARCT-810) .
- 2024 NEO bonuses reflected qualitative achievement against corporate objectives (e.g., vaccine approvals/data, clinical progress, non-dilutive funding/operations discipline) .
Director Compensation (Context for dual role)
- Non-employee directors receive cash retainers ($50,000 Board; $10,000 Audit; $10,000 Comp; $5,000 Nominating; Chair premiums) and annual options (15,000 shares; monthly vesting over one year); inaugural grants 15,000 options vest monthly over two years . As an employee-director, Mr. Payne’s compensation is captured in NEO tables; no separate non-employee director fees are disclosed for him .
Expertise & Qualifications
- Education: B.S. Chemistry (BYU), M.S. Synthetic Organic Chemistry (University of Calgary), Executive Training Certification (MIT Sloan) .
- Technical/industry expertise: RNA therapeutics and lipid-mediated delivery; nanoparticle technology via team leadership at Nitto Denko; extensive publications/patents and IND history .
Equity Grants Detail (Recent)
| Grant Date | Options (#) | Exercise Price ($) | Fair Value ($) |
|---|---|---|---|
| 12/16/2024 | 196,000 | 16.24 | 2,635,000 |
Investment Implications
- Alignment: High beneficial ownership (8.2%) and all-equity long-term incentives via options foster alignment; hedging/pledging bans further reduce misalignment risk .
- Retention vs. sale pressure: Multi-year option vesting schedules and no 2024 option exercises suggest limited near-term selling pressure from exercises; however, sizable unvested grants create potential acceleration value under change-of-control, which can be a catalyst-sensitive factor ($7.36M equity acceleration estimate) .
- Pay-for-performance discipline: 2024 total comp down year-over-year and below peer median amid stock decline; incentives remain primarily performance-oriented (options) with qualitative bonus tied to execution milestones, which supports capital efficiency and reduces guaranteed pay .
- Governance: CEO-director but not chair, with independent committees and strong say-on-pay support (94.9%); separation of chair/CEO remains in place, with Chair transition to Dr. Slaoui, mitigating dual-role concerns .