Reshma Shetty
About Reshma Shetty
Reshma Shetty is Co‑Founder, President and Chief Operating Officer of Ginkgo Bioworks (DNA) and has served on the Board since 2008; she holds a Ph.D. in Biological Engineering from MIT and a B.S. in Computer Science from the University of Utah . She is age 44 and is designated as a Class B Director nominee, elected by holders of Class B common stock, with no board committee memberships; she serves on the Board due to her founder status and deep knowledge of the business . Pay‑versus‑performance disclosures show company TSR of $2.02 from a $100 initial investment in 2024 versus peer group TSR of $67.96, and net loss of $547 million, framing recent performance context for compensation alignment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Ginkgo Bioworks Holdings, Inc. | President, Chief Operating Officer, Founder; Director | 2008–present | Founder; Board believes founders are qualified due to knowledge of company and business |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| — | — | — | Other current public company boards: None |
Fixed Compensation
| Year | Base Salary ($) | Target Bonus (%) | Actual Bonus ($) | All Other Compensation ($) | Notes |
|---|---|---|---|---|---|
| 2022 | 250,000 | — | — | 12,500 | 401(k) non‑elective contribution; no executive perks policy |
| 2023 | 250,000 | — | — | 12,019 | 401(k) non‑elective contribution corrected from prior proxy |
| 2024 | 250,000 | — | — | — | Company has no annual cash bonus program |
Performance Compensation
| Grant/Program | Instrument | Grant Date | Units/Target | Exercise/Strike ($) | Grant-Date FV ($) | Performance Metric | Weighting | Target | Actual/Payout | Vesting |
|---|---|---|---|---|---|---|---|---|---|---|
| 2024 Founder Compensation Program | Stock Options | 4/25/2024 | 125,000 | 100.00 | 981,000 | 90‑day avg stock price hurdles (post reverse split): $200, $300, $400, $500 | 10%, 10%, 20%, 60% | Achieve each hurdle within 5 years | Not achieved as of 12/31/2024; exercise price > $9.82 close → no value in severance calc | If hurdles are met, vests at 5‑year anniversary; 10‑year term to 4/25/2034 |
| Earnout Awards (from 2021 Business Combination) | Restricted Stock (earnout) | 8/18/2021 | 9,726; 48,279 unearned | — | $95,509; $474,100 market values at $9.82 | Stock price thresholds: $600, $700, $800 (any 20 of 30 trading days within 5 years) | — | Meet threshold; service requirement met 10/1/2022 | Performance not met as of 12/31/2024 | Service‑based vested; performance‑based vest contingent |
Notes:
- Company does not run an annual cash bonus plan; equity is primary incentive .
- Founder options were approved by a Special Committee with independent advisors; designed to pay only for sustained and substantial appreciation .
Equity Ownership & Alignment
| Holder | Class A Shares | Class A % | Class B Shares | Class B % | Total Voting Power % | Vested vs Unvested | Options (Exercisable vs Unexercisable) |
|---|---|---|---|---|---|---|---|
| Reshma Shetty | 618,726 | 1.3% | 4,097,358 | 44.6% | 30.2% | Unvested earnout shares: 9,726; 48,279 | Founder Options: 125,000 performance‑based unearned; exercise price $100; expire 4/25/2034 |
Alignment policies and risks:
- Insider Trading Compliance Policy prohibits hedging; pledging is prohibited unless an exception is approved by the Board .
- Clawback policy adopted October 2, 2023 for erroneously‑awarded incentive comp upon restatements; no clawbacks in 2024 .
- No excise tax gross‑ups in existing agreements .
Employment Terms
| Provision | Details |
|---|---|
| Employment agreement | Founding NEOs (including Shetty) have no employment or severance agreement . |
| Severance | None for Shetty; no guaranteed compensation upon termination . |
| Change‑of‑Control | Founder options: if assumed, remain outstanding and eligible to vest; if not assumed, any portion that satisfied performance criteria vests at closing . |
| Termination Accelerations | Death/disability or termination without cause: any portion of Founder options that has satisfied performance vesting criteria accelerates; pro‑rata vesting if 90‑day average price lies between hurdles at termination . |
| Post‑termination share holding | If options exercised pre‑vesting, resulting shares must be held for one year post‑termination (exceptions for death/disability/termination without cause or change‑of‑control) . |
| Non‑compete / non‑solicit | Not disclosed for founders; CFO has non‑compete and non‑solicit covenants for one year post‑service . |
| Clawback / Hedging / Pledging | Clawback policy (Oct 2, 2023); hedging prohibited; pledging prohibited unless Board‑approved exception . |
| Ownership guidelines | Corporate Governance Guidelines include director stock ownership policies; details on website . |
Board Governance
- Board service: Director since 2008; Class B Director nominee; Board committees: None .
- Independence: She is an executive officer; founders are not permitted to serve on the Compensation Committee under the charter .
- Committee landscape (context): Compensation Committee consists of Shyam Sankar (Chair), Ross Fubini, Christian Henry; independent under NYSE . Audit Committee currently chaired by Christian Henry; members include Harry E. Sloan; independence affirmed . Nominating & Corporate Governance chaired by Shyam Sankar; membership changes noted post‑meeting .
- Annual meeting attendance: All nine directors then serving attended the 2024 Annual Meeting .
Director Compensation (context; Shetty is an employee director)
- Non‑employee director program (2024): $50,000 annual cash retainer plus committee fees; equity grants of $200,000 RSUs and $200,000 options annually; initial grants of $400,000 and $200,000 options plus $200,000 RSUs; vesting schedules as disclosed .
- Program updates (2025): Cash retainer reduced to $45,000; equity option grants set to $500,000 initial and $275,000 annual with minimum $8.00 FMV used for share count calculation; three‑year vesting for options .
Company Performance Context
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Total Revenue ($000) | 477,706 | 251,455 | 227,043 |
| Cell Engineering Revenue ($000) | 143,666 | 143,531 | 173,972 |
| Biosecurity Revenue – Service ($000) | 298,585 | 78,975 | 53,071 |
| Biosecurity Revenue – Product ($000) | 35,455 | 28,949 | — |
| EBITDA ($000) | — | (879,557) | (523,006) |
| Adjusted EBITDA ($000) | — | (364,965) | (293,311) |
| Net Loss ($000) | (2,106,372) | (892,869) | (547,029) |
Pay‑Versus‑Performance TSR and Net Income
| Year | Company TSR ($ from $100) | Peer Group TSR ($) | Net Income (Loss) ($000) |
|---|---|---|---|
| 2021 | 68.23 | 84.19 | (1,830) |
| 2022 | 13.88 | 62.62 | (2,105) |
| 2023 | 13.88 | 67.48 | (893) |
| 2024 | 2.02 | 67.96 | (547) |
Compensation Governance and Peer Groups
- Compensation consultants: Sequoia Consulting Group (until May 2024), then PwC US Tax LLP; PwC advised on peer group updates and attended meetings .
- 2024 peer group included 19 bioscience/biotech and related companies; 2025 peer group updated to 18 companies with additions to align with industry, revenue, and complexity .
- Anti‑hedging and pledging policy; clawback policy effective October 2, 2023 .
Compensation Structure Analysis
- Shift to high at‑risk equity: Founders received performance‑based stock options in 2024 after no founder equity grants since 2021; options vest only upon meeting multi‑tier stock price hurdles over five years and then on the five‑year anniversary, aligning pay with sustained stock appreciation .
- No annual cash bonuses: Company does not operate a cash bonus program; founder base salaries remain below market by peer group measures, reinforcing equity emphasis .
- No severance or gross‑ups: Founders have no severance or accelerated vesting of unearned equity; no excise tax gross‑ups; accelerations are limited to portions that have met performance criteria .
- Equity overhang and dilution monitored: Compensation Committee states commitment to responsible use of equity and realizable compensation perspective .
Vesting Schedules and Insider Selling Pressure
- Founder options: 125,000 options at $100 strike; 10%, 10%, 20%, 60% tranches vest upon 90‑day average price hurdles of $200, $300, $400, $500 respectively within five years; awards vest at five‑year anniversary if hurdles achieved; 10‑year term to 4/25/2034 .
- Earnout restricted stock: Three tranches vest upon $600, $700, $800 price thresholds achieved on 20 out of 30 consecutive trading days within five years post‑closing; Shetty’s service‑based vesting met October 1, 2022; performance vesting outstanding .
- Post‑termination holding: If founder options are exercised pre‑vesting, resulting shares must be held one year post‑termination, reducing immediate selling pressure upon departure (subject to exceptions) .
- Hedging/pledging constraints: Policy prohibits hedging and pledging unless Board‑approved exception, mitigating alignment risks .
Risk Indicators & Red Flags
- Founders’ control features: Class B shares carry 10 votes per share; Shetty’s holdings translate to 30.2% total voting power—heightened governance consideration with dual executive‑director role .
- Compensation linkage to stock price: High reliance on stock price hurdles concentrates incentives on market performance; absence of operational financial metrics in 2024 goal‑setting acknowledged in proxy .
- Management transitions: CFO transition announced May 2025; new CFO received 2025 PSU award tied to company‑wide planned cash flow objectives .
Investment Implications
- Strong equity alignment but near‑term retention risk is low: Shetty’s compensation is predominantly equity‑linked with high hurdles and no severance, plus post‑termination share holding requirements, reducing immediate exit optionality and likely moderating selling pressure .
- Governance considerations: Dual founder/COO/director role coupled with significant Class B voting power and charter restrictions that keep founders off the Compensation Committee enhances checks on self‑setting pay but concentrates control; monitor say‑on‑pay outcomes and committee independence over time .
- Performance‑driven upside optionality: Founder options heavily back‑ended to the highest price hurdle (60% at $500 post split), creating trading sensitivity to sustained stock re‑rating; however, TSR and losses in recent years highlight execution risk and the challenge of achieving hurdles without operational inflection .
- Policy frameworks mitigate alignment concerns: Anti‑hedging/pledging and clawback policies, plus no gross‑ups or perks and below‑market base salary, are shareholder‑friendly features that align realized compensation with performance .