Thomas S. McHugh
About Thomas S. McHugh
Thomas S. McHugh, age 60, has served as Chief Financial Officer of Avadel Pharmaceuticals since December 2019. He previously was SVP, Finance at Ironshore Pharmaceuticals (Nov 2018–Nov 2019). He holds a B.S. in Finance (Bentley University) and an M.S. in Accounting (Northeastern University) . During his tenure, Avadel reported FY2024 Net Product Revenue of $169.1M vs $28.0M in FY2023, and the company’s total shareholder return (value of $100 invested at 12/31/2019) stood at $145.17 at 12/31/2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Ironshore Pharmaceuticals | Senior Vice President, Finance | Nov 2018 – Nov 2019 | — |
Fixed Compensation
| Year | Base Salary ($) | Target Bonus (% of Base) | Target Bonus ($) | Actual Bonus Paid ($) |
|---|---|---|---|---|
| 2024 | 465,372 | 45% | 209,417 | 52,354 |
| 2023 | 437,997 | 45% | — | 212,867 |
Performance Compensation
- 2024 corporate goals: LUMRYZ launch revenue and patient demand; execution of financial strategy and organizational plan; portfolio and pipeline expansion .
- Compensation Committee assessed 2024 corporate performance at 50% .
| Metric / Plan | Weighting | Target | Actual/Payout | Vesting / Notes |
|---|---|---|---|---|
| Annual Cash Incentive (CFO) | — | $209,417 | $52,354 | Payout informed by 2024 corporate performance score of 50% |
| 2023 PSUs (companywide program) | — | — | 1/3 tied to H2’23 forfeited (Feb 2024); 2/3 tied to 2024 forfeited (Feb 2025) | Indicates performance conditions were not met |
Equity Ownership & Alignment
| Holder | Total Beneficial Ownership (sh) | % of Class | Breakdown |
|---|---|---|---|
| Thomas S. McHugh | 864,675 | <1% (asterisked by company) | Includes 776,875 options exercisable within 60 days and 87,800 shares owned directly |
- Shares outstanding (record date): 96,900,485 (for % calc context) .
- Hedging and pledging: Executive officers are prohibited from hedging and pledging company securities .
- Ownership guidelines: Disclosed for non-employee directors (3x retainer); no executive officer ownership guidelines disclosed .
Equity Detail (Vesting Schedules and Potential Selling Pressure)
Unless otherwise noted, options vest in four equal annual installments following grant .
| Grant Date | Options (#) | Exercise Price ($) | Vesting Detail | Expiration |
|---|---|---|---|---|
| 10/22/2019 | 250,000 | 3.45 | Standard 4-year vesting | 10/22/2029 |
| 12/08/2020 | 200,000 | 6.79 | Standard 4-year vesting | 12/08/2030 |
| 12/07/2021 | 150,000 (112,500 ex., 37,500 unex.) | 8.20 | Remaining 37,500 vests 12/07/2025 | 12/07/2031 |
| 08/04/2022 | 175,000 | 4.69 | Standard 4-year vesting | 08/04/2032 |
| 02/20/2024 | 157,500 | 13.57 | 39,375 vest on 2/20/2025, 2026, 2027, 2028 | 02/20/2034 |
- Intrinsic value of unvested options that would accelerate on a qualifying CoC termination (based on $10.51 share price at 12/31/2024): $86,625 (CFO) .
Employment Terms
| Provision | CFO (Thomas S. McHugh) |
|---|---|
| Base role/appointment | CFO since December 2019 |
| Severance (no CoC) | 1.0x base salary paid over 12 months; up to 12 months COBRA premiums |
| Severance (CoC + qualifying termination during CoC period) | 1.0x base salary; up to 12 months COBRA; 100% acceleration of unvested equity; vested options exercisable up to 18 months (not beyond original term) |
| Triggers | “Good Reason” (material diminution, relocation >60 miles, material breach) and “Cause” defined; CoC and CoC period defined |
| Clawback | Dodd-Frank compliant policy adopted Oct 2023; recoups incentive-based comp paid within 3 years preceding a required restatement |
| Hedging/Pledging | Prohibited for executive officers and directors |
| Retirement/Deferred | 401(k) with company contributions; CFO employer 401(k) contribution of $12,393 in 2024 |
Compensation Structure Observations
- Mix shift and pay-for-performance: 2024 cash incentive for CFO was materially below target ($52,354 vs $209,417 target), aligning with a 50% corporate performance score .
- Equity-heavy incentives: Significant 2024 option grant (157,500 @ $13.57) vests through 2028; encourages retention and share price alignment but is out-of-the-money at 12/31/2024 reference price used in CoC table .
- PSU outcomes: 2023 PSU tranches tied to H2’23 and 2024 performance were forfeited, signaling rigorous performance hurdles or underperformance versus PSU targets .
- Shareholder posture: Say-on-Pay support was ~90% at the 2024 AGM, indicating broad investor acceptance of NEO pay programs .
Say-on-Pay & Shareholder Feedback
| Year | Say-on-Pay Result | Frequency |
|---|---|---|
| 2024 AGM | ~90% approval of NEO compensation | Biennial say-on-pay; next vote in 2026 |
Investment Implications
- Alignment and retention: Low 2024 cash bonus vs target and sizable unvested options through 2028 suggest retention hooks remain strong; double-trigger CoC equity acceleration reduces windfall risk from non-terminating CoC events .
- Selling pressure: McHugh holds 776,875 options exercisable within 60 days and 87,800 shares outright; anti-hedging/pledging rules mitigate leverage-driven or hedged-selling risk. Upcoming annual vest dates (Feb 20 each year 2025–2028; Dec 7, 2025) are the key potential liquidity dates to monitor for Form 4 activity .
- Pay-for-performance rigor: Forfeiture of 2023 PSU tranches indicates stretch targets; 2024 corporate performance score at 50% with reduced bonus payout reinforces a measured committee posture on payout calibration .
- Shareholder support baseline: Strong 2024 Say-on-Pay result gives governance cover for the current incentive design while the clawback and anti-pledging policies align with investor-friendly practices .
All information is sourced from Avadel Pharmaceuticals plc’s 2025 DEF 14A Proxy Statement dated June 18, 2025. Citations are provided inline in [doc_id:chunk] format.