Gerard Michel
About Gerard Michel
Gerard Michel, 61, has served as Chief Executive Officer (CEO) and Director of Delcath Systems, Inc. since October 1, 2020, bringing 30+ years of pharma/medtech experience including CFO roles at Vericel, Biodel and NPS Pharmaceuticals, and earlier roles at Booz Allen, Lederle and Wyeth. He holds an M.S. in Microbiology (University of Rochester School of Medicine), an MBA (Simon School of Business), and dual B.S. degrees in Biology and Geology (University of Rochester) . Under his tenure, Delcath secured FDA approval (Aug 2023) and launched HEPZATO KIT in Jan 2024, supported by a permanent J‑code (J9248) effective Apr 1, 2024 and NTAP status effective Oct 1, 2024; as of Dec 31, 2024, 22 centers were accepting referrals (14 active) .
Performance context during tenure:
- First U.S. commercial launch of HEPZATO KIT in 2024; U.S. commercialization infrastructure, REMS and site activation progressed (22 referral sites; 14 active by year-end) .
- Reimbursement milestones: CMS J‑code J9248 (effective Apr 1, 2024) and NTAP for inpatient cases (effective Oct 1, 2024) .
- European pathway sustained with MDR certification and broader reimbursement pursuit (e.g., NHS England application Jan 2025) .
Financial and market outcomes:
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($) | — | $2,065,000* | $37,205,000* |
| Value of $100 TSR | $45.69 | $52.79 | $152.79 |
| Net Income (Loss) ($) | $(36,508,000) | $(47,678,000) | $(26,386,000) |
* Values retrieved from S&P Global.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Vericel Corporation | Chief Financial Officer | 2014–2020 | Key member integrating transformative acquisition; pivoted model to profitable commercial business . |
| Biodel, Inc. | CFO & VP Corporate Development | 2007–2014 | Finance and BD leadership during clinical-stage operations . |
| NPS Pharmaceuticals | CFO & VP Corporate Development | 2002–2007 | Finance and corporate development leadership . |
| Booz Allen | Principal | — | Strategic consulting across healthcare; commercial/funding insight . |
| Lederle Labs; Wyeth Labs | Commercial roles | — | Early commercial and operating experience . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Not disclosed | — | — | No current outside public company directorships disclosed in 2025 proxy/10‑K. |
Fixed Compensation
| Component | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $542,538 | $564,240 |
| Target Annual Bonus (% of Salary) | 65% | 65% |
- 2024 actual cash bonus: $366,756 (100% of target) reflecting 100% corporate goal achievement .
Performance Compensation
Annual Incentive Plan (AIP) design and outcomes:
| Performance Metric Area | Weighting | Target | Actual | Payout |
|---|---|---|---|---|
| Clinical Trials | Not disclosed | Corporate plan | Achieved | 100% (overall AIP) |
| Regulatory | Not disclosed | Corporate plan | Achieved | |
| Commercial | Not disclosed | Corporate plan | Achieved | |
| Manufacturing | Not disclosed | Corporate plan | Achieved | |
| Finance | Not disclosed | Corporate plan | Achieved |
Long-term equity (stock options):
| Grant Date | Instrument | Shares | Exercise Price | Vesting | Notes |
|---|---|---|---|---|---|
| 2/12/2024 | Stock Option | 301,500 | $4.78 | Equal monthly over 3 years (first vesting at grant) | Annual LTI grant . |
| 2/8/2023 | Stock Option | 140,400 | $4.67 | Portion monthly; see awards table | Outstanding detail below . |
| 6/12/2023 | Stock Option | 168,887 | $7.25 | Portion monthly; see awards table | Outstanding detail below . |
| 2/8/2022 | Stock Option | 116,137 | $7.14 | Portion monthly; see awards table | Outstanding detail below . |
| 8/5/2021 | Stock Option | 125,000 | $10.16 | 4/36 vested at grant; remainder monthly | Special vesting tranche . |
| 10/1/2020 | Inducement Options | 498,000 | $11.67/$17.51/$23.34 tranches | 36-month ratable; fully vested by 10/1/2023 | Three strike tranches; fully vested . |
Outstanding equity awards at FYE 2024 (selected CEO lines):
| Grant | Exercisable (#) | Unexercisable (#) | Exercise Price | Expiry |
|---|---|---|---|---|
| 2/12/2024 | 92,125 | 209,375 | $4.78 | 2/12/2034 |
| 6/12/2023 | 89,148 | 79,739 | $7.25 | 6/12/2033 |
| 2/8/2023 | 89,700 | 50,700 | $4.67 | 2/8/2033 |
| 2/8/2022 | 112,910 | 3,227 | $7.14 | 2/8/2032 |
| 8/5/2021 | 125,000 | — | $10.16 | 8/5/2031 |
| 10/1/2020 (3 tranches) | 396,000 / 51,000 / 51,000 | — | $11.67 / $17.51 / $23.34 | 10/1/2030 |
Clawbacks and repricing safeguards:
- Company-wide clawback policy compliant with Dodd‑Frank/Nasdaq; equity and cash incentives subject to recoupment; plan includes 1‑year post‑vesting recovery in certain misconduct scenarios .
- Equity plan prohibits repricing of options/SARs without stockholder approval .
Equity Ownership & Alignment
| Beneficial Ownership (as of 3/20/2025) | Shares | % of Common | Notes |
|---|---|---|---|
| Total beneficial ownership | 1,457,615 | 4.22% | Includes direct and option holdings |
| Directly held (common) | 319,334 | — | Footnote breakdown |
| Options exercisable within 60 days | 1,138,281 | — | Footnote breakdown |
Policy alignment:
- Anti‑hedging and anti‑pledging: directors and executive officers are prohibited from hedging or pledging company securities .
- Ownership guidelines: not disclosed in 2025 proxy/10‑K.
Insider purchases (recent):
- Mar 29, 2023: Purchased 19,646 common and 47,776 warrants (~$100,000) .
- Mar 19, 2024: Purchased 40,323 common ($150,001.56) .
Employment Terms
Key provisions of CEO Employment Agreement (effective July 16, 2024):
| Term | Without Cause / Good Reason | Change-in-Control (3 months before to 12 months after) |
|---|---|---|
| Cash Severance | 15 months base salary + pro‑rated earned annual bonus (discretionary determination) | 18 months base salary + pro‑rated earned annual bonus |
| COBRA | Company-paid differential up to 15 months (earlier if eligible elsewhere) | Up to 18 months (earlier if eligible elsewhere) |
| Equity Acceleration | — | Full vesting of all unvested stock options upon qualifying termination |
| Restrictive Covenants | Confidentiality; 12‑month non‑solicitation of certain customers/employees; non‑disparagement | |
| Dispute Resolution | Arbitration; New York law; jury trial waiver |
Good Reason includes material salary reduction (broad-based exceptions), material diminution of duties, material work location change, or material company breach (with notice/cure) .
Board Governance
- Board service: Class I Director since 2020; nominated for re‑election in 2025 to a term expiring at the 2028 annual meeting .
- Independence: CEO is not independent; five of six directors are independent under Nasdaq rules .
- Board leadership: Independent Non‑Executive Chairman (John R. Sylvester) since Feb 2023; the company separates Chair and CEO roles to mitigate concentration of authority .
- Committees (CEO not a member): Audit (Chair: Czerepak; members Salamon, Martell; all financial experts); Compensation (Chair: Sylvester; member Aharon); Nominating/Governance (Chair: Salamon; members Martell, Sylvester) .
- 2024 cadence: Board met 8 times; all directors met 75%+ attendance; annual meeting attendance customary .
Non‑employee director compensation (context; does not apply to CEO):
- Annual retainers: Board $50,000; Chair $25,000; Committee Chairs/Members per schedule; annual option grant vests monthly .
Compensation Structure Analysis
- Cash vs equity mix: 2024 total CEO comp $2,157,414 (salary $560,622; bonus $366,756; option grant-date FV $1,230,036) vs 2023 $2,520,314 (higher option FV $1,792,348, lower bonus) — shift toward cash in 2024 as equity grant FV declined .
- AIP construct: 2024 bonus at 100% of target (65% of salary) based on Company-wide goals (Clinical, Regulatory, Commercial, Manufacturing, Finance) — emphasizes corporate outcomes rather than individual discretion .
- Equity design: Time-vested options with monthly vesting; no PSUs disclosed; 2020 inducement award fully vested by Oct 2023; plan prohibits repricing and embeds recoupment mechanisms .
- Pay vs Performance perspective: “Compensation Actually Paid” to PEO rose alongside 2024 TSR improvement and commercial launch milestone; net income remained negative as launch investments continued .
Related Party Transactions
- March 2023 PIPE: Michel purchased common/warrants (~$100k) alongside investors .
- March 2024 private placement: Michel purchased 40,323 shares (~$150k) .
Compensation Peer Group & Say‑on‑Pay
- Compensation consultant: FW Cook engaged in 2024; the plan amendment analysis noted overhang and share-reserve context .
- Peer group and target percentile: not disclosed in the proxy.
- Say‑on‑Pay: Advisory vote included on 2025 ballot; Board considers stockholder feedback in compensation design .
Director Service Addendum (Roles/Committees/Independence Implications)
- Dual-role considerations: Michel is CEO and Director; separation of Chair and CEO roles and an independent chair mitigate typical CEO/Chair concentration concerns; the CEO does not serve on standing committees (audit/comp/nom‑gov) preserving independence of oversight .
Multi‑Year Compensation and Ownership Tables
CEO compensation (selected elements):
| Year | Salary ($) | Cash Bonus ($) | Option Awards (Grant-Date FV $) | Total ($) |
|---|---|---|---|---|
| 2023 | 538,078 | 189,888 | 1,792,348 | 2,520,314 |
| 2024 | 560,622 | 366,756 | 1,230,036 | 2,157,414 |
AIP targets and payouts (2024):
| Executive | Target Bonus % | Target ($) | Actual % | Actual ($) |
|---|---|---|---|---|
| Gerard Michel (CEO) | 65% | 366,756 | 100% | 366,756 |
Beneficial ownership (as of March 20, 2025):
| Holder | Common Shares | % of Class | Notes |
|---|---|---|---|
| Gerard Michel | 1,457,615 | 4.22% | Includes 1,138,281 options exercisable within 60 days; 319,334 shares held outright . |
Risk Indicators & Red Flags
- Equity plan overhang/dilution: 2025 proposal increased 2020 Plan reserve by 2.2M shares (to 9.325M total); Board/consultant analysis noted total common equivalents ~38.17M (including in-the-money warrants and convertibles), with proposed increase <6% of common equivalents; expected burn-rate ~6% if options are primary vehicle .
- Hedging/pledging prohibited for insiders (alignment safeguard) .
- Repricing prohibition and robust clawbacks embedded (shareholder-friendly structure) .
- Liquidity/profitability: FY2024 net loss $(26.4)M reflecting launch-stage investment needs; continued execution risk on commercialization and manufacturing/supply (e.g., melphalan sourcing) .
Investment Implications
- Alignment: 4.22% beneficial ownership, recurring open-market/PIPE purchases, option-heavy LTI, anti‑pledge/hedge, and clawbacks indicate meaningful alignment with equity holders .
- Retention risk: Moderate; severance of 15 months (18 months upon CIC) plus full option acceleration on double-trigger CIC is competitive but not excessive; non‑solicit applies for 12 months .
- Pay‑for‑performance: 2024 AIP hit 100% on company-wide objectives; equity remains time‑based options; no disclosed formulaic TSR/financial metrics in LTI, though PEO Compensation Actually Paid improved as TSR rose in 2024 .
- Dilution watch: 2025 equity plan increase (<6% of common equivalents) supports hiring/retention amid scaling; monitor ongoing burn/overhang and future grants as commercial hiring expands .
- Execution focus: Key levers are HEPZATO U.S. adoption (site activation, reimbursement), supply robustness (melphalan), and label expansion trials (mCRC, breast) to sustain revenue and reduce losses .