Robert Etherington

About Robert Etherington

Robert Etherington is President, Chief Executive Officer, and Director of Clene Inc. (Class III director), roles he has held since April 2013; he is 58 years old and has over 30 years of biopharma commercialization experience . He holds a B.S. in business with a pharmaceutical emphasis and an MBA from Brigham Young University, and completed the General Management Program at Harvard University . Pay-versus-performance disclosures show a value of initial fixed $100 investment (TSR proxy) of $6.48 in 2024, $7.23 in 2023, and $24.39 in 2022, alongside net losses of $39.4 million (2024), $49.5 million (2023), and $29.9 million (2022), framing the operating backdrop during his tenure .

Past Roles

External Roles

Fixed Compensation

Employment Agreement (Feb 1, 2022): base salary initially $560,000; annual incentive bonus targeted at 50% of base, determined by Board/Compensation Committee .

Performance Compensation

Annual Incentive (Cash)

• Structure: Target bonus 50% of base salary; specific performance objectives set annually by Board/Comp Committee (metrics not itemized in proxy) .
• 2024/2023 outcome: Bonuses earned ($314,580 in 2024; $368,000 in 2023) but not paid due to cost-saving initiatives; payment subject to ability to raise funding .

Long-Term Incentive (Equity) – Outstanding Option Awards (as of 12/31/2024)

• General vesting standard for options (unless otherwise noted): 25% on first anniversary, remaining in 36 equal monthly installments; options typically 10-year term .
• Acceleration: Unexercised options subject to acceleration per severance agreements (see Employment Terms) .

Pay Versus Performance (Context)

Equity Ownership & Alignment

• Hedging/Pledging: Company policy strongly discourages directors and executive officers from hedging transactions; option transfer restrictions in Stock Plan prohibit pledging/hypothecation of options in certain circumstances under Rule 12h-1(f) conditions .

Employment Terms

Board Governance and Service

• Role: President, CEO, and Director; Class III director continuing in office until 2026 annual meeting; Director since 2013; not independent .
• Board leadership: Independent non-employee director serves as Chairman of the Board; committee memberships comprised solely of independent directors . Chairman is David J. Matlin (Class II; Chair of Nominating & Corporate Governance Committee) .
• Committee participation: Etherington is not listed as a member of Audit, Compensation, or Nominating committees (all independent) .
• Board activity: Board met nine times in 2024; all directors serving in 2024 attended or participated in ≥75% of meetings; eight directors attended 2024 annual meeting .

Director Compensation (Policy context for non-employee directors)

Compensation Structure Analysis

• Mix and at-risk pay: CEO compensation relies heavily on stock options, including performance-conditioned tranches tied to FDA NDA acceptance/approval and $100m revenue, aligning upside to value-creation milestones . Cash bonuses for 2023–2024 were earned but withheld pending financing, indicating liquidity discipline but potential retention pressure from deferred cash comp .
• Equity program intensity: Three-year average burn rate 10.19% with 2024 burn 14.03%; potential overhang estimated at 23.0% (28.1% if plan amendment approved), reflecting heavy option-based incentives to retain talent through regulatory milestones .
• Governance safeguards: Independent chair and all-independent committees; external consultant FW Cook retained by Compensation Committee; no compensation committee interlocks .

Risk Indicators & Red Flags

• Deferred cash bonuses (earned but unpaid) increase near-term retention risk and could influence executive liquidity needs around vest dates .
• High equity overhang and large performance-based grants amplify dilution risk for shareholders but concentrate management incentives on regulatory and commercial inflection points .
• Hedging strongly discouraged; option pledging restricted under plan conditions, reducing misalignment risk from derivatives/pledging, though explicit executive stock pledging disclosures are not provided in the proxy .

Say-on-Pay & Shareholder Feedback

• Advisory vote on executive compensation proposed for 2025 meeting; majority of votes cast required; Board recommends “FOR” approval; historical approval percentages not disclosed in this proxy .

Equity Grant Detail – Potential Milestone Levers

• 6/7/2024 performance option (112,500 shares at $7.40): vests one-third upon NDA acceptance, one-third upon NDA approval, and one-third upon achieving $100m in revenues from approved drug sales, creating clear regulatory/commercial alignment .

Investment Implications

• Pay-for-performance alignment is strongest around clinical and commercial catalysts: the June 2024 performance options explicitly tie vesting to NDA acceptance/approval and $100m revenue, suggesting meaningful management incentive to achieve near- to mid-term value inflections .
• Retention risk is non-trivial given unpaid but earned cash bonuses for 2023–2024 and a compensation mix skewed to options; however, single-trigger equity acceleration is included in severance and double-trigger 2x base + target bonus in change-of-control scenarios may stabilize leadership through strategic events .
• Governance structure mitigates dual-role concerns: Etherington is CEO and director but not Chairman, with an independent chair and fully independent committees overseeing compensation and audit, lowering independence and oversight risk .
• Ownership alignment exists but is modest by percentage (2.1% including options/warrants within 60 days), with no disclosed pledging; heavy reliance on milestone-based equity creates high sensitivity to FDA and initial commercialization outcomes for CNM-Au8 .