Pratik Shah
About Pratik Shah
Pratik Shah, Ph.D., 55, is President, Chief Executive Officer, Chairperson, and the Company’s principal executive and financial officer at Design Therapeutics (since August 2023); he has been on the Board since 2017, previously serving as Executive Chairperson (2017–Aug 2023) . He co‑founded the company; the Board deems him non‑independent and has appointed a Lead Independent Director to balance his combined CEO/Chair role . Dr. Shah holds a B.S. (UC Irvine), a Ph.D. in Biochemistry & Molecular Biology, and an M.B.A. in Finance (both University of Chicago) . The proxy does not disclose TSR, revenue, or EBITDA growth metrics for his tenure; Board met four times in 2024 with all directors at ≥75% attendance .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Design Therapeutics | Executive Chairperson; Director | 2017–Aug 2023 | Guided corporate strategy pre-CEO; continued Board leadership |
| Auspex Pharmaceuticals, Inc. | President, CEO, Chairman | Oct 2013–May 2015 | Led company through sale to Teva Pharmaceutical Industries Ltd. (completed May 2015) |
| Synthorx, Inc. | Chairman | Oct 2018–Jan 2020 | Oversaw company through acquisition by Sanofi S.A. (Jan 2020) |
| Thomas, McNerney & Partners | Partner (VC) | 2004–2014 | Biopharma investing and governance experience |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| ARS Pharmaceuticals, Inc. | Chairperson; Director | Chair; Director since Apr 2016 | Current chair of public company board |
| Marlinspike Group, LLC | President | Since Aug 2018 | Ongoing role; separate consulting relationship with Design noted below |
| Marlinspike Group, Inc. | President | Jun 2015–Oct 2020 | Prior corporate entity leadership |
Fixed Compensation
| Year | Base Salary ($) | Discretionary Cash Bonus ($) | Non‑Equity Incentive (Annual Performance Bonus) ($) | Option Awards Grant‑Date FV ($) | All Other Comp ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2024 | 395,000 | 144,000 | 237,000 (100% of goals) | — | 13,800 (401k match) | 789,800 |
| 2023 | 360,600 | 181,552 | 148,748 | 5,613,680 | 13,200 (401k match) | 6,317,780 |
Notes:
- 2024 base salary increased from $360,600 to $395,000 effective Jan 1, 2024; unchanged for 2025 .
- 2024 annual performance goals were R&D, pipeline, and operating objectives; payout at 100% .
Performance Compensation
Annual Cash Incentive Structure (2024)
| Element | Target | Actual | Basis/Notes |
|---|---|---|---|
| Target bonus % of salary | 60% of base salary (increased from 50%) | 100% achievement; paid $237,000 | Goals set on R&D/pipeline/operating; Board determined 100% achievement in Dec 2024 |
Option Awards and Performance Conditions
| Grant Date | Type | Shares | Exercise Price | Vesting Terms | Performance Conditions |
|---|---|---|---|---|---|
| Jan 2025 | Stock Option | 600,000 | $6.17 | 20% on Jan 1, 2026; then 20% over next 12 months, 30% over next 12 months, 30% over next 12 months (monthly) subject to Continuous Service | Time‑based only |
| Sep 1, 2023 | Stock Option | 525,000 (uneaned) | $2.48 | 25% one year after Aug 25, 2023; remainder monthly over 36 months | Additional vesting condition: Company receives FDA IND clearance for FA program |
| Sep 1, 2023 | Stock Option | 525,000 (uneaned) | $2.48 | 25% one year after Aug 25, 2023; remainder monthly over 36 months | Additional vesting condition: Company initiates Phase 2a clinical trial for FA |
| Sep 1, 2023 | Stock Option | 1,050,000 (350,000 ex./700,000 unex.) | $2.48 | 25% one year after Aug 25, 2023; remainder monthly over 36 months | Time‑based only |
| Feb 1, 2023 | Stock Option | 415,000 (152,166 ex./262,834 unex.) | $7.97 | 20% at 1‑year; then 20%/30%/30% monthly over three successive 12‑month periods | Time‑based |
| Feb 1, 2022 | Stock Option | 475,000 (308,750 ex./166,250 unex.) | $12.77 | 20% at 1‑year; then 20%/30%/30% monthly over three successive 12‑month periods | Time‑based |
Implications:
- 2023 included two milestone‑conditioned grants (FA IND clearance; Phase 2a start) that add explicit pipeline execution gates to vesting—strong pay‑for‑performance linkage around program advancement .
- 2025 grant creates a meaningful time‑based retention hook with a 20% cliff vest on Jan 1, 2026, followed by monthly vesting through 2028, potentially creating periodic liquidity events if trading windows permit .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 1,154,548 shares (≈2.0% of 56,768,678 outstanding as of 3/31/2025) |
| Ownership breakdown | 104,923 held by Pratik Shah Living Trust; 25,000 direct; 1,024,625 shares issuable upon option exercise within 60 days (as of 3/31/2025) |
| Options outstanding (12/31/2024) | Exercisable: 350,000 @ $2.48; 152,166 @ $7.97; 308,750 @ $12.77 . Unexercisable: 700,000 @ $2.48; 262,834 @ $7.97; 166,250 @ $12.77; plus 1,050,000 unearned (performance‑contingent) @ $2.48 |
| Pledging / Hedging | Company policy prohibits pledging, margin, short sales, options, and hedging of Company stock by directors and officers |
| Ownership guidelines | Not disclosed for executives in proxy; director equity program disclosed separately |
Commentary:
- Prohibition on pledging/hedging reduces forced‑sale/pledge risk; beneficial ownership of ~2% aligns incentives with shareholders .
- Upcoming vesting: 20% of 2025 option (120,000 shares) vests on Jan 1, 2026; additional monthly vests thereafter may incrementally add potential selling supply during open windows .
Employment Terms
| Term | Key Provision |
|---|---|
| Employment structure | Offer letter governs; at‑will employment |
| 2024 base and target bonus | Base: $395,000; Target bonus 60% of base (increased from 55%/50% prior) |
| Severance (no CoC) | If terminated without cause or resigns for good reason: 12 months’ base salary + up to 12 months COBRA premiums (subject to release, etc.) |
| Change‑in‑Control economics | Full excise tax gross‑up for golden parachute excise taxes (shareholder‑unfriendly) |
| Equity treatment on CoC/transactions | 2021 Plan: no automatic CoC acceleration; if awards are not assumed/continued/substituted in a corporate transaction, in‑service awards accelerate in full before closing; performance awards typically at 100% of target unless specified |
| Clawback | Dodd‑Frank‑compliant clawback adopted; SOX 304 reimbursement if required |
Board Governance
- Roles: CEO and Chair of the Board; Board determined combined role is appropriate; Lead Independent Director (Dr. Simeon George) appointed in Aug 2023 with authority over agendas, executive sessions, and liaison duties .
- Independence: All directors other than Dr. Shah are independent under Nasdaq rules .
- Committees: Audit, Compensation, Nominating & Corporate Governance, and R&D Committees—all composed of independent directors; Dr. Shah is not a member of any committee .
- Attendance: Board met 4 times in 2024; each director attended ≥75% of applicable meetings .
- Annual Meeting: Dr. Shah attended the 2024 Annual Meeting (noting Board practice to invite directors) .
Dual‑role implications:
- Combining CEO/Chair concentrates power; mitigants include a Lead Independent Director with defined authorities and fully independent committees .
Director Compensation (context)
- Non‑employee director policy includes cash retainers and annual/initial option grants; options vest monthly and fully vest on change‑in‑control; not applicable to Dr. Shah as an employee director .
Compensation Committee Analysis
- Committee members: Chair Dr. Arsani William; members Dr. Simeon George and John Schmid; all independent .
- Process: Typically quarterly; CEO excluded from deliberations on his own comp; uses tally sheets, peer analyses, and consultant input .
- Independent consultant: FW Cook engaged since 2020; independence assessed with no conflicts identified; peer group updated periodically (2022–2024) .
- 2024 meetings: Compensation Committee met 2 times; peer oversight of human capital and incentive risk .
Related Party Transactions (Governance Red Flags)
| Counterparty | Nature | Key Terms |
|---|---|---|
| Marlinspike Group, LLC (Shah is executive officer) | Management/business development consulting | $20,000 per month under consulting agreement initiated Mar 2020 |
| Crossing Holdings, LLC (controlled by Shah and his entities) | HQ and expansion premises leases | ~12,370 sq ft lab/office (commenced Sep 2021; 72‑month term + 3‑year extension option); ~4,900 sq ft expansion (Mar 2022; co‑terminus; initial rent abatement) |
- Company maintains a related‑person transaction policy with Audit Committee oversight .
Performance & Track Record
- Prior value creation: Led Auspex to sale to Teva (2015) and chaired Synthorx through sale to Sanofi (2020), signaling M&A execution capabilities .
- Current disclosure lacks explicit TSR or operating KPIs vs targets; 2024 corporate goals achieved at 100% for annual bonus purposes .
Risk Indicators & Red Flags
- Excise tax gross‑up on change‑in‑control payments (shareholder‑unfriendly structure) .
- Related‑party lease and ongoing consulting arrangement tied to entities controlled by Dr. Shah (conflict potential; mitigated by related‑party policy) .
- Combined CEO/Chair role (mitigated by Lead Independent Director and independent committees) .
- Pledging and hedging prohibited (alignment positive) .
- Clawback policy in place (alignment positive) .
- Board met 4 times; attendance standards met (governance hygiene) .
Equity Ownership & Vesting Detail (as of 12/31/2024 and key forward dates)
| Category | Quantity / Date | Notes |
|---|---|---|
| Beneficial ownership | 1,154,548 shares (2.0%) | Includes 1,024,625 options exercisable within 60 days of 3/31/2025 |
| Options exercisable (12/31/2024) | 350,000 @ $2.48; 152,166 @ $7.97; 308,750 @ $12.77 | From 2023/2022 grants |
| Unexercisable (12/31/2024) | 700,000 @ $2.48; 262,834 @ $7.97; 166,250 @ $12.77; 1,050,000 unearned @ $2.48 | Two 525,000 tranches subject to FA IND and Phase 2a milestones |
| Next large time‑based vest | Jan 1, 2026 | 20% (120,000 shares) of 2025 grant vests; monthly thereafter |
| Transaction acceleration | If awards not assumed in a corporate transaction, in‑service awards accelerate fully pre‑close; performance awards usually at target unless specified |
Employment Terms (Detail)
| Provision | Economics |
|---|---|
| Termination without cause / good reason | 12 months base salary + up to 12 months COBRA (subject to release, etc.) |
| Change‑in‑Control (tax) | Full excise tax gross‑up provision |
| Equity on CoC | No automatic CoC acceleration; transaction‑based acceleration if awards not assumed |
Investment Implications
- Alignment and retention: Significant equity mix, with 2023 milestone‑conditioned options tied to FA program execution and a sizeable 2025 time‑based grant with a 1/1/2026 cliff, support retention and create event‑linked upside if clinical milestones are met . Pledging/hedging prohibitions and a Dodd‑Frank clawback further align incentives .
- Potential selling pressure: Upcoming vesting (notably the Jan 1, 2026 cliff and ongoing monthly vesting) could add incremental insider supply during open windows; however, prohibitions on pledging/margin reduce forced‑sale risk .
- Governance risks: The excise tax gross‑up and related‑party lease/consulting arrangements are notable red flags; the combined CEO/Chair role is mitigated by a Lead Independent Director and fully independent committees, but still concentrates authority .
- Execution track record: Prior leadership of companies through acquisitions (Auspex, Synthorx) suggests strength in value‑realization pathways; current bonus metrics achieved at 100% in 2024 indicate internal execution against stated R&D/pipeline goals, though external performance KPIs (TSR, revenue/EBITDA) are not disclosed in the proxy .