Derek J. Maetzold
About Derek J. Maetzold
Founder, President & CEO of Castle Biosciences since inception (September 2007); age 63; B.S. in Biology from George Mason University. Castle delivered 2024 revenue of $332.1M (+51% YoY) and 96,071 test reports (+36% YoY), exceeding guidance; pay-versus-performance shows 2024 company TSR at 77.54 (vs 62.79 in 2023) and net income of $18.2M, alongside revenue of $332.1M . He is a co‑inventor on technologies at Castle and Encysive and has co-authored multiple publications .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Encysive Pharmaceuticals | Leadership roles | Not disclosed | Biopharma commercialization experience |
| Schering‑Plough (now Merck) | Leadership roles | Not disclosed | Large-cap pharma commercial execution |
| Integrated Communications | Leadership roles | Not disclosed | Life sciences communications |
| Amylin Pharmaceuticals | Leadership roles | Not disclosed | Endocrinology commercialization |
| Sandoz (Novartis) | Leadership roles | Not disclosed | Global pharma operating experience |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| PreludeDx | Director | Not disclosed | Industry board service |
| Coalition for 21st Century Medicine | Director | Not disclosed | Advocacy/industry policy |
| IMPACT Melanoma | Director | Not disclosed | Patient advocacy |
Fixed Compensation
| Metric (USD) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary | $660,000 | $686,400 | $715,572 |
| Target Bonus % of Salary | Not disclosed | 95% target pre‑2024 | 100% target (increased from 95%) |
| Actual Annual Bonus Paid | $771,375 | $893,350 | $921,657 |
| All Other Compensation | $18,300 (401k match, etc.) | $26,234 | $20,250 (incl. $19,800 401k match; $100 wellness; $350 gift) |
Notes: 2024 CEO base was $715,572; target bonus increased to 100% of base; actual payout 128.8% of target reflecting corporate performance .
Performance Compensation
- 2024 short‑term incentive outcomes (CEO bonus solely corporate; no individual modifier):
- Corporate goals: revenue and long‑term initiatives (validation study, e‑ordering metrics, SCC reimbursement). Corporate achievement certified at 128.8% of target; CEO payout 128.8% of target .
| 2024 STI Design | Weight | Target | Actual | Payout Factor |
|---|---|---|---|---|
| Revenue | 75% | $305.0M | $332.1M | 108.8% weight contribution |
| Long‑term initiatives (validation, e‑ordering, SCC reimbursement) | 25% | Specified thresholds | Achieved (10% + 5% + 5%) | 20.0% weight contribution |
| Total Corporate Factor | 100% | — | — | 128.8% |
- Long‑term incentives (LTI) structure and metrics:
- 2024: CEO LTI mix 50% PSUs / 50% time‑based RSUs; PSUs on 3‑year performance period with metrics: revenue, successful launch of a new commercial test, and achieving positive EBITDA by end of 2026; RSUs vest over 4 annual installments .
- No executive options granted since 2021 (shift to RSUs/PSUs) .
- 2022 PSU tranche: cumulative revenue goal achieved; 50% vested Aug 2024; remaining 50% scheduled to vest Aug 8, 2025 (time‑based) .
| 2024 LTI Grants (3/4/2024) | Shares/Units | Grant‑Date Fair Value |
|---|---|---|
| Time‑based RSUs | 124,437 | $2,641,798 |
| PSUs (3‑yr; revenue, test launch, positive EBITDA) | 124,437 target | $2,641,798 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 900,885 shares; 3.1% of outstanding (based on 28,839,188 shares as of Mar 21, 2025) |
| Components (illustrative) | Includes 78,335 held directly; multiple family/trust holdings; and 530,322 options exercisable within 60 days |
| Outstanding CEO Equity at 12/31/2024 | Unvested RSUs include 124,437 (3/4/2024), 66,991 (12/9/2022), 66,991 (12/23/2022), 15,424 (12/10/2021); Unvested PSUs include 124,437 (3/4/2024) |
| Option Inventory | Multiple tranches; example: 170,000 @ $29.50 (12/13/2019); 87,100 @ $59.16 (12/10/2020); 79,782/26,594 @ $40.52 (12/10/2021, w/ 26,594 unexercisable) |
| 2024 Vest/Exercises | 121,274 shares vested (RSUs/PSUs) with $3,448,649 value; 10,686 options exercised, $198,653 value realized |
| Ownership Guidelines | CEO guideline 3x base salary; all directors and executive officers meet guidelines as of Mar 21, 2025 |
| Hedging/Pledging | Prohibited for directors and officers (no hedging, short sales, margin, or pledging) |
Vesting calendar insight (potential selling pressure): remaining 50% of the 2022 PSU awards are scheduled to vest on Aug 8, 2025 (time‑based) following certification in Aug 2024, a notable date for incremental free‑trading supply if shares are not otherwise retained .
Employment Terms
- Employment Agreement: Original June 2008; amended/restated Sept 2012; amended Feb 2017 and June 2019; 2024 base $715,572 and target bonus 100% .
- Severance and Change‑in‑Control (Severance Plan):
- Non‑CIC covered termination: 18 months base salary; 150% of higher of most recent target or actual annual bonus (paid over 18 months); up to 18 months COBRA; 18 months acceleration of time‑vesting equity; pro‑rata PSUs based on service with final PSU shares per actual performance .
- CIC double‑trigger (3 mo. before to 12 mo. after CIC): lump sum 36 months base salary; 300% of target bonus; up to 3 years COBRA; full vesting of time‑based equity and PSUs at 100% of target; if awards not assumed at CIC and he remains to closing, all unvested awards vest (PSUs at target or based on actual, if greater) .
- Voluntary resignation without good reason: 12 months continued base salary .
- Retirement Policy: Eligible executives (including Mr. Maetzold) may receive accelerated vesting of time‑based equity scheduled within 24 months post‑retirement (and certain performance awards if already earned), supporting orderly transitions and succession planning .
- Clawback: SEC/Nasdaq‑compliant; mandatory recovery of incentive comp upon financial restatement (3‑year lookback) .
- Perquisites/Tax: Limited perqs; no post‑employment tax gross‑ups; no single‑trigger equity acceleration on CIC .
Board Governance (and dual‑role implications)
- Position on Board: Director since 2007; not independent; no committee memberships .
- Structure: Independent, non‑employee Chair (Daniel M. Bradbury); separation of Chair/CEO intended to enhance independent oversight .
- Board Independence and Activity: 7 of 8 directors independent; board met 8 times in 2024; all directors attended ≥75% of meetings .
- Director Pay for CEO: Employee directors receive no additional director compensation (Mr. Maetzold: none) .
Dual‑role assessment: While he is CEO and director, the presence of an independent Chair and fully independent key committees (Audit/Comp/Nominating) tempers concentration of power and supports governance balance .
Director Compensation (for context; CEO receives none)
- Non‑employee director policy: Annual cash retainer $47,500; annual equity grant ~$200,000 in RSUs; new director initial RSU ~$350,000; committee retainers and chair premiums detailed; awards vest on standard schedules .
- 2024 Say‑on‑Pay: 97% support (improved after prior years’ low support), following investor outreach to holders representing ~60% of outstanding shares .
Compensation Structure Analysis
- Mix and trend: Significant shift from options to RSUs/PSUs since 2021; 2024 CEO LTI 50% performance‑based; overall 51% of CEO 2024 reported pay “at‑risk” (cash incentives + PSUs) .
- Metric evolution: To reduce overlap with annual plan, 2024 PSUs added two 3‑year metrics—new commercial test launch and achieving positive EBITDA by end of 2026—alongside multi‑year revenue; PSU performance horizon moved from 2 to 3 years .
- Grant timing change: Annual equity shifted to Q1 of following year (no grants in 2023; resumption in Q1 2024) to align with results and goal‑setting; explains YoY “spike” in 2024 stock award values .
- Governance practices: Double‑trigger CIC acceleration; clawback; stock ownership guidelines; prohibition on hedging/pledging; no guaranteed bonuses or excessive perqs; independent compensation consultant (Aon) with no identified conflicts .
Compensation Peer Group (benchmarking)
- Peer group construction considers life sciences diagnostics/tools/biotech, revenue 0.75x–5x projected, market cap 0.5x–4x; 2024 peer group includes 17 companies (e.g., ADPT, ADMA, GH, NTRA, NEO, VCYT, TWST) .
- Positioning: Committee uses benchmarking without a fixed percentile target; at selection time, Castle was ~13th percentile for market cap, ~28th percentile for revenue, ~79th percentile for growth vs peers .
Say‑on‑Pay & Shareholder Feedback
- 2024 SoP approval ~97%; outreach led by Comp Committee Chair with CEO participation; feedback informed metric separation in LTI, adoption of clawback and ownership guidelines, and expanded disclosures .
Related‑Party Transactions and Other Risk Indicators
- Family employment: Son (John), daughter (Emily), son (Peter), and brother‑in‑law (Greg Holzapfel) employed in non‑officer roles; 2024 total comp $897,469, $346,423, $336,851, and $493,498 respectively; approved under related‑party policy .
- AltheaDx acquisition (2022): Mr. Maetzold (then a director/security holder of AltheaDx) received $1,347,172 in initial consideration; milestone earn‑outs ultimately zero; this was disclosed and closed; no remaining obligations .
- Policies: Prohibition on hedging/pledging; clawback; double‑trigger CIC; independent chair; 7/8 independent directors; all mitigate certain governance risks .
Performance & Track Record (company context)
- 2024 highlights: Revenue $332.1M (+51% YoY), test reports 96,071 (+36% YoY), exceeded revenue guidance; cash and marketable securities of ~$293M at YE 2024 (proxy summary) .
- Pay‑versus‑performance: PEO “compensation actually paid” and TSR presented; TSR improved in 2024 vs 2023, while revenue grew materially and net income was positive in 2024 .
Investment Implications
- Alignment and retention: 3.1% beneficial ownership with prohibitions on hedging/pledging and a 3x salary ownership guideline (met) align incentives; robust double‑trigger CIC package and retirement policy reduce flight risk but increase potential CIC costs/dilution on acceleration .
- Incentive quality: Increased use of 3‑year PSUs with revenue, pipeline launch, and positive EBITDA gating improves pay‑for‑performance calibration; grant‑timing change ties awards to actual results and budget setting .
- Near‑term flow dynamics: Scheduled vesting of remaining 2022 PSUs on Aug 8, 2025 (time‑based) could add incremental supply depending on disposition, while annual RSU tranches continue to vest; monitor Form 4s around these dates for potential selling pressure .
- Governance watch‑items: Multiple family members employed and the prior AltheaDx related‑party transaction merit continued monitoring, though mitigated by formal related‑party review processes, independent board/committees, and strong 2024 say‑on‑pay support .