A.J. Kazimi
About A.J. Kazimi
A.J. Kazimi, 67, is Chairman of the Board and Chief Executive Officer of Cumberland Pharmaceuticals; he founded the company in 1999 and has over 30 years of biopharma experience (B.S. Notre Dame; M.B.A. Vanderbilt Owen) . Under his tenure, 2024 total shareholder return (TSR) rose 32.3% year over year while “compensation actually paid” to the CEO increased 2.8%; adjusted diluted EBITDA per share fell 98.0%, and operating results improved 32.7% versus 2023 . He has overseen FDA approvals (e.g., Acetadote sNDA) and product acquisitions, including the Sancuso brand transition, and led funding for growth and the IPO .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Therapeutic Antibodies Inc. | President & COO | 11 years | Helped grow from start-up through IPO and London listing . |
| Brown-Forman Corp. | Management roles | Not disclosed | Early career; progressed through management positions . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Cumberland Emerging Technologies | Chairman & CEO | Not disclosed | Joint initiative with Vanderbilt University and State of Tennessee supporting early-stage life sciences . |
| Gettysburg Foundation | Chairman of the Board | Not disclosed | Partners with National Park Service; civic leadership role . |
| Tennessee Historical Society | Board Member | Not disclosed | Community and historical stewardship . |
| Prior: Nashville Health Care Council; Aegis Sciences Corp. | Director (prior service) | Not disclosed | Industry network and governance experience . |
Fixed Compensation
| Metric (USD) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary | $635,000 | $675,000 | $702,000 |
| Cash Bonus (Actual) | $260,000 | $275,000 | $275,000 |
| Company Deferred Comp Contribution | $20,000 | $20,000 | $0 |
| All Other Compensation | $2,497 | $2,530 | $2,269 |
| CEO Pay Ratio (Disclosure) | 9:1 | 10:1 | 12:1 |
Notes:
- Bonuses are discretionary and tied to corporate/individual objectives; no formulaic target percentage disclosed .
Performance Compensation
Equity grant detail (vesting and strike economics)
| Grant Year | Instrument | Grant Date | Shares/Options | Strike ($/sh) | Grant-date Fair Value | Vesting |
|---|---|---|---|---|---|---|
| 2024 | Incentive Stock Options | 03/25/2024 | 100,000 | $1.88 | $188,000 | Cliff vest 4 years (03/25/2028) per plan/footnote |
| 2023 | Incentive Stock Options | 03/24/2023 | 100,000 | $2.17 | $217,000 | Cliff vest 4 years (03/24/2027) |
| 2022 | Incentive Stock Options | 03/16/2022 | 80,000 | $2.85 | $257,600 | Cliff vest 4 years (03/16/2026) |
| 2022 | Restricted Stock | 03/16/2022 | 20,000 | n/a | $51,800 | 100% vest on 03/16/2026 |
| 2021 | Incentive Stock Options | 03/17/2021 | 88,000 | $3.54 | n/a | 100% vest on 03/17/2025 |
| 2021 | Restricted Stock | 03/17/2021 | 12,000 | n/a | n/a | 100% vest on 03/17/2025 |
Pay-versus-performance snapshot (disclosure metrics)
| Year | CEO Comp Actually Paid | Company TSR | Adjusted Diluted EBITDA/Share |
|---|---|---|---|
| 2024 | $979,269 | 46.02 | $0.01 |
| 2023 | $952,530 | 34.79 | $0.48 |
Notes:
- “Most important performance measures” cited for 2024 include Net Revenue, Cash Flow from Operations, EPS before EBITDA, and Adjusted Earnings (used qualitatively alongside individual goals) .
- No option exercises by the CEO in 2024; stock vestings occurred (74,290 shares; value realized $134,465) .
Equity Ownership & Alignment
Beneficial ownership (as of Feb 28, 2025)
| Holder | Shares Beneficially Owned | % of Outstanding | Notable Inclusions |
|---|---|---|---|
| A.J. Kazimi | 5,790,296 | 41.19% | Includes 32,000 RS vesting and 88,000 ISOs exercisable/vesting within 60 days |
Outstanding CEO equity at FY 2024
| Type | Quantity | Exercise Price | Expiration | Vest/Status at FY-End |
|---|---|---|---|---|
| ISOs (2021 grant) | 88,000 | $3.54 | 03/17/2026 | Vested 03/17/2025 |
| ISOs (2022 grant) | 80,000 | $2.85 | 03/16/2027 | 100% vest 03/16/2026 |
| ISOs (2023 grant) | 100,000 | $2.17 | 03/24/2028 | 100% vest 03/24/2027 |
| ISOs (2024 grant) | 100,000 | $1.88 | 03/25/2029 | 100% vest 03/25/2028 |
| RS (granted 03/17/2021) | 12,000 | n/a | n/a | 100% vested 03/17/2025 |
| RS (granted 03/16/2022) | 20,000 | n/a | n/a | 100% vest 03/16/2026 |
Other alignment considerations
- Pledging: The company states no common stock beneficially owned by any director or NEO is pledged as collateral .
- Hedging: The company currently does not have policies prohibiting hedging of company securities by executive officers or directors (governance risk) .
Deferred compensation (CEO)
| Year | Company Contribution | Aggregate Earnings/(Loss) | Aggregate Balance |
|---|---|---|---|
| 2024 | $0 | $24,463 | $237,579 |
| 2023 | $20,000 | $26,618 | $213,115 |
| 2022 | $20,000 | ($29,295) | $166,497 |
Stock ownership guidelines: Not disclosed; director compensation guidelines and fees apply to non-employee directors only (CEO is not paid director fees) .
Employment Terms
| Term | Disclosure |
|---|---|
| Employment Agreement | Annual at-will agreements; eligible for discretionary bonus; benefits and expense reimbursement; new agreements each year . |
| Severance | No severance on termination for cause; no severance benefits for death or disability; no other severance provisions disclosed . |
| Non-Compete | 1 year post-termination, with possible release by the company; applies to competing with company business . |
| Non-Solicit | 1 year post-termination; covers business and employees . |
| Confidentiality/IP | Confidentiality obligations and company ownership of discoveries . |
| Change-of-Control (CIC) | Under the 2007 LTIP, upon a change of control, all outstanding options become fully exercisable and restrictions on other equity awards generally lapse; performance awards payable per plan terms . |
| Clawback | Not specifically disclosed in the proxy; general Code of Conduct and Insider Trading Policy are referenced . |
| Perquisites | Company generally does not provide perquisites . |
Board Governance
| Attribute | Detail |
|---|---|
| Role | Chairman of the Board and Chief Executive Officer (dual role) . |
| Director Class | Class III; up for election in 2025, re-nominated and elected April 2025 . |
| Independence | Not independent (management director); Board has Lead Independent Director and independent committees . |
| Committee Memberships | None disclosed for CEO; Audit, Compensation, and Governance & Nominating Committees comprised of independent directors . |
| Attendance | Board held three meetings in 2024 with full attendance by every director; committee meetings also fully attended . |
| Lead Independent Director | Role exists; receives additional 4,000 restricted shares per year . |
Director compensation (context): Non-executive directors receive cash retainers plus restricted stock (tenured: $60,000 + 2,500 RS in 2024; $60,000 + 2,500 RS in 2025) .
Performance & Track Record
- 2024 highlights under management include FDA Orphan Drug and Rare Disease designations for ifetroban DMD program, Acetadote sNDA approval for two-bag dosing, Vibativ launch initiatives, Sancuso packaging/manufacturing transition, and cybersecurity enhancements .
- 2023 highlights included positive cash flow from operations, Sancuso brand transition, credit facility expansion, and progress on international submissions .
- CEO-specific contributions cited: IPO/Nasdaq listing, >$100M capital raised, brand acquisitions, patent defense, and organizational development .
Compensation Committee Analysis
- Committee members (independent): Joseph C. Galante (Chair), Caroline R. Young, Gordon R. Bernard; authority to engage consultants .
- Benchmarking relies on the Radford Global Life Sciences Survey across ~800 biopharma companies for pay ranges and equity awards; targets are considered but not formulaic .
- Pay-versus-performance disclosure provided with CEO and NEO “compensation actually paid,” TSR, net income, and Adjusted Diluted EBITDA per share .
Say-On-Pay & Shareholder Feedback
- Triennial say-on-pay; shareholders approved NEO compensation on an advisory basis in 2023; next vote scheduled for 2026 .
- April 22, 2025 annual meeting results: A.J. Kazimi re-elected (approx. 99.6% votes in favor of his nomination) .
Risk Indicators & Red Flags
- Hedging policy: No prohibition on hedging by executives/directors (misalignment risk) .
- Equity plan governance: 2007 LTIP permits option repricing/exchanges at committee discretion (shareholder-unfriendly feature) .
- Late Section 16 filing: CEO filed a late Form 4 covering March 2022 transactions (administrative timing issue) .
- No pledging: No shares pledged by directors/NEOs (positive) .
- Legal proceedings: None material involving directors or officers disclosed .
Investment Implications
- High ownership alignment: Kazimi’s ~41% stake tightly aligns incentives with shareholders, but also concentrates control; liquidity events could occur around option cliff-vest dates (e.g., 2026–2028 tranches) though 2024 showed no option exercises .
- Pay-for-performance: Cash bonuses are discretionary against strategic/financial milestones; equity is primarily time-based options with four-year cliff vesting—limited direct link to quantified performance hurdles (no PSU framework disclosed) .
- Governance watchpoints: Dual Chairman/CEO structure mitigated by a Lead Independent Director and independent committees, but absence of hedging prohibitions and the LTIP’s repricing permission are notable governance risks .
- Retention/transition risk: Employment is at-will with modest restrictive covenants and no cash severance; change-of-control economics are largely equity acceleration under the plan—shareholder-friendly vs. cash-heavy parachutes .
- Trading signals: Upcoming cliff vesting (2026–2028) across multiple option grants (80k–100k per year) could create episodic selling pressure; continued absence of pledging and no 2024 option exercises are modest positives .