Leif Pedersen

About Leif Pedersen

Leif E. Pedersen, 61, is Certara’s President and Chief Commercial Officer (since August 2023), after serving as President of Software from September 2020 to August 2023; his employment agreement became effective July 30, 2020 and includes standard confidentiality, non-compete (1 year), and non-solicit (2 years) covenants . Certara’s 2024 performance underpins his pay-for-performance design: revenue grew 9% to $385.1 million versus $354.3 million in 2023, and company-wide adjusted EBITDA achievement exceeded 90% of target, driving AIB funding, with AIB metrics weighted 80% adjusted EBITDA and 20% revenue and PSUs tied to revenue and EBITDA with an rTSR modifier in newer grants . Certara prohibits executive hedging and pledging without pre-clearance, adopted a Dodd‑Frank-compliant clawback policy in 2023, and requires NEOs to hold equity equal to 2x base salary; all NEOs were in compliance as of February 1, 2025 .

Past Roles

External Roles

Fixed Compensation

Performance Compensation

Annual Incentive Bonus (AIB)

• Structure: For Pedersen, AIB multiplier derived 80% from division adjusted EBITDA and 20% from division revenue, blended with 20% company-wide adjusted financial metrics; multiplier scale 50–200% for adjusted EBITDA and 50–150% for revenue . 2024 company-wide adjusted EBITDA achievement exceeded 90% of target; division and corporate scores mostly ≥74% multipliers, with one division at 63% yielding a 65.2% multiplier after company-wide factor .
• Historical payouts:
  • 2023: Target bonus 55%; AIB multiplier 69%; paid $162,120 .
  • 2022: Target bonus 50%; AIB multiplier 103%; paid $209,528 .

Long-Term Equity (PSUs and RSUs)

• Design evolution:
  • 2022 grants: 50% RSUs, 50% PSUs; PSUs split equally into annual revenue growth and unlevered free cash flow growth tranches with 0–135% weighting; linear interpolation; three-year performance period (2022–2024) . Final payout factor for 2022 PSUs was 27.3% based on exceeding revenue and ULCF thresholds in year 1 but missing thresholds in years 2 and 3; distribution on April 1, 2025 .
  • 2023 grants: 40% RSUs, 60% PSUs; PSUs split into annual revenue and adjusted EBITDA tranches across 2023–2025 with 0–200% weighting and rTSR modifier (+20% at ≥75th percentile, −20% at ≤25th percentile); forfeiture if average adjusted EBITDA margin <20% over first two years .
  • 2024 grants: Similar 3-year PSUs with revenue and adjusted EBITDA metrics; estimates as of year-end 2024 used to gauge current earned PSUs .

RSU Vesting Schedules (selected grants)

• April 1, 2022 RSUs: Three-year annual vesting; completed April 1, 2025 .
• April 1, 2023 RSUs: Three equal annual tranches vest on April 1, 2024, 2025, 2026 .
• April 1, 2024 RSUs: Three equal annual tranches vest on April 1, 2025, 2026, 2027 .

Equity Ownership & Alignment

• Hedging and pledging: Hedging prohibited; pledging requires prior approval by General Counsel and is generally restricted; margin purchases and pledging require pre-clearance .
• Ownership guidelines: NEOs required to hold equity equal to 2x base salary; compliance assessed annually; all NEOs in compliance as of Feb 1, 2025; non-compliant individuals must retain 100% of net shares until next compliance date .
• Clawback: Dodd‑Frank/Rule 10D‑1/Nasdaq-compliant policy adopted in 2023; incentive compensation tied to financial reporting may be recovered for 3 completed fiscal years preceding a restatement .
• Perquisites and gross-ups: No significant perquisites; no excise tax gross-ups .

Employment Terms

Change-in-Control Economics (Illustrative)

Vesting Activity and Potential Selling Pressure

• Forward vesting catalysts: Final tranche of pre‑IPO restricted stock (51,224 shares) scheduled to vest September 9, 2025; RSUs from 2023 and 2024 grants continue vesting annually on April 1, 2025–2027 . PSUs from 2023 and 2024 grants will settle after their respective three-year performance periods, subject to revenue/EBITDA outcomes and rTSR modifier .

Compensation Committee and Peer Benchmarking

• Consultant: Korn Ferry engaged as independent consultant for peer benchmarking and incentive design; Compensation Committee assessed independence and no conflicts .
• Peer group: 15 companies across software, life sciences tools/services, and healthcare technology selected based on market cap, revenue, EBITDA, employees; used to calibrate target compensation competitiveness .

Investment Implications

• Pay-for-performance alignment: Pedersen’s variable pay is driven chiefly by adjusted EBITDA and revenue (80/20) and long-term PSUs tied to revenue/EBITDA with rTSR modifiers; 2022 PSU payout was only 27.3% (7,082 shares) indicating disciplined linkage to performance when thresholds aren’t met .
• Near-term supply overhang manageable: 2024 vesting totaled 91,207 shares; the remaining pre‑IPO restricted stock final tranche (51,224 shares) vests Sep 9, 2025, and annual RSU tranches in 2025–2027 represent predictable supply; hedging is prohibited and pledging requires GC approval, reducing forced‑sale risk .
• Ownership and alignment: Beneficial ownership is 133,412 shares (<1%), but NEO ownership guidelines require 2x salary and all NEOs are compliant, with retention requirements on net shares until compliance—supportive of alignment .
• Retention risk mitigants: Severance equal to six months’ salary and single‑trigger CIC acceleration on equity provide downside protection and transaction continuity; non‑compete/non‑solicit provisions further discourage immediate competitive exits .
• Performance execution signals: 2024 revenue growth (9%) and adjusted EBITDA achievement >90% of target drove AIB funding; monitor rTSR outcomes on 2023–2025 PSUs and 2024–2026 PSUs for incremental upside/downside to realized equity .