Matthew Kowalsky
ENANTA PHARMACEUTICALSAbout Matthew Kowalsky
Matthew P. Kowalsky, J.D., is Chief Legal Officer and Corporate Secretary of Enanta Pharmaceuticals (ENTA) since April 29, 2024 (age 52 as of Dec 15, 2024). He previously held senior legal and operational roles at Sigilon Therapeutics (Chief of Staff and Chief Legal/Administrative Officer; joined 2019 as General Counsel/Corporate Secretary), Proteon Therapeutics (VP Legal; 2016–2019), and earlier roles at Sanofi Genzyme, Cubist, ARIAD, and Lantheus; he began his legal career at Choate, Hall & Stewart and served as a U.S. Navy surface warfare officer. Enanta’s TSR (indexed to $100 at 9/30/2021) was $23 in FY2024 vs $24 in FY2023, $113 in FY2022, and $124 in FY2021; FY2024 net loss was $116.0M, underscoring a challenging equity backdrop during his initial tenure .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Sigilon Therapeutics | Chief of Staff; Chief Legal & Administrative Officer; General Counsel & Corporate Secretary | 2019–2023 | Senior legal and operational leadership through acquisition by Eli Lilly (2023) |
| Proteon Therapeutics | Vice President of Legal; Corporate Secretary | 2016–2019 | Public company legal leadership during late-stage biotech operations |
| Sanofi Genzyme | Senior Corporate Counsel (BD/alliances/marketed products) | N/A | Supported BD and rare disease alliances and marketed products |
| Cubist, ARIAD, Lantheus | Legal roles | N/A | Progressive biopharma legal responsibilities |
| Choate, Hall & Stewart LLP | Associate (Corporate and IP) | N/A | Foundational corporate/IP practice experience |
| U.S. Navy | Surface Warfare Officer | N/A | Leadership and operations experience |
External Roles
- No public company directorships disclosed for Mr. Kowalsky in the proxy .
Fixed Compensation
| Metric | FY 2024 | Source |
|---|---|---|
| Salary paid (FY) | $195,342 | |
| Base salary rate (Calendar 2024) | $460,000 | |
| Target bonus % (design) | 40% | |
| “Non-Equity Incentive Plan Compensation” paid (FY) | $111,780 |
Notes:
- ENTA administers variable cash on a calendar-year cycle; for FY2024 reporting, the non-equity incentive reflects the program mechanics for the year; Mr. Kowalsky joined in April 2024 .
Performance Compensation
Annual Cash Incentive (design and outcomes)
| Component | Weighting | FY2024 Target | FY2024 Actual Achievement | FY2024 Payout (FY basis) |
|---|---|---|---|---|
| Corporate performance | 70% | Part of 40% of salary target design | 75% company rating (2024 objectives) | Included in $111,780 FY non-equity incentive |
| Individual performance | 30% | Part of 40% of salary target design | Not detailed for 2024 in proxy for Kowalsky | Included in $111,780 FY non-equity incentive |
Sources: design (weights/target) ; corporate achievement 75% for 2024 ; payout (FY) .
Long-Term Equity (granted in FY2024; performance periods and vesting)
| Award Type | Grant Date | Units/Options | Exercise Price | Grant-Date Fair Value | Performance Metric | Vesting/Measurement |
|---|---|---|---|---|---|---|
| Stock Options (Inducement Plan) | 4/29/2024 | 150,000 | $7.27 | $1,090,560 | Time-based | 10-year term; vests over 4 years (equal quarterly installments) |
| rTSRUs (target/threshold/max) | 4/29/2024 | 4,395 / 2,198 / 6,593 | N/A | $74,276 | Relative TSR vs Nasdaq Biotech Index; 0–150% payout; threshold 40th percentile | 2-year measurement: 12/31/2023 to 12/31/2025; settle Feb 2026 |
| PSUs (target/threshold/max) | 4/29/2024 | 4,395 / 659 / 6,593 | N/A | — (not probable at grant) | Two-year R&D/BD milestones across clinical, research, and external value drivers; 0–150% payout | Performance period ends 12/31/2025; settle Feb 2026 |
- Performance frameworks: PSUs emphasize clinical progress, research milestones, and potential external (in/out-licensing) transactions; rTSRUs require ≥40th percentile TSR for 50% payout, 60th for 100%, 75th for 150% .
Equity Ownership & Alignment
| Item (as of dates indicated) | Value |
|---|---|
| Beneficial ownership (12/16/2024) | 0 shares; 0.00% of outstanding |
| Options outstanding (9/30/2024) | 150,000 unexercised options (grant 4/29/2024) |
| Option exercise price (OEA table) | $13.25 (as of 9/30/2024 OEA table) |
| PSUs (target) outstanding (9/30/2024) | 4,395 units |
| rTSRUs (target) outstanding (9/30/2024) | 4,395 units |
| Hedging/Pledging policy | Prohibited for all employees and directors |
Sources: beneficial ownership table ; outstanding equity awards table (counts/prices/targets) ; anti-hedging/anti-pledging policy . Note: ENTA disclosed all outstanding options were out-of-the-money as of Dec 31, 2024, highlighting limited near-term monetization; broader option pool weighted average exercise price $41.57 with all options OTM at $5.75 stock price (12/31/2024) .
Employment Terms
| Provision | Without Change in Control | With Change in Control (Double Trigger within 12 months) |
|---|---|---|
| Cash severance | 6 months base salary | 12 months base salary |
| Bonus | — | 100% of target annual bonus |
| Benefits continuation | Up to 6 months | Up to 12 months |
| Equity acceleration | None | All unvested options/RSUs vest; PSUs vest at target |
| Illustrative payout (as of 9/30/2024) | Total: $475,627 (Salary $460,000; Benefits $13,878; Accrued vacation $1,749) | Total: $764,569 (Salary $460,000; Bonus $184,000; Benefits $27,756; Accrued vacation $1,749; Modified equity $91,064) |
Sources: severance and CIC mechanics ; potential payments tables (values as of 9/30/2024) .
Compensation Structure Analysis
- Mix and design: For FY2024, ENTA shifted executive time-based equity entirely to options (no time-based RSUs), with performance units sized at ~20% of “50th percentile” market value to reach median only if targets achieved; new-hire awards (including Kowalsky’s) granted under the 2024 Inducement Plan .
- Performance metrics: Annual cash incentive tied 70% to corporate R&D/clinical objectives and 30% to individual goals; 2024 corporate performance was assessed at 75% (down from 90% in 2023) .
- Option economics: As of year-end 2024, all outstanding options were out-of-the-money; ENTA highlighted retention risk and reliance on performance units to restore incentive value relative to peers .
Compensation Peer Group and Say-on-Pay
- Peer group: ENTA utilizes a biotech peer set adjusted annually for stage, market cap ($100M–$1B for 2024 review), revenue (≤$200M), and R&D intensity; 2024 additions included Allogene, Altimmune, Editas, Inovio, Nektar, Puma, Rigel, SAGE, Sutro; removals included Agios, Allovir, BioCryst, Deciphera, FibroGen, Intercept, Ligand, Supernus, Xencor .
- Say-on-pay results: 79% support at 2024 meeting; 2025 support rose to ~93% (For: 14,516,861; Against: 1,039,888; Abstain: 2,126) .
Investment Implications
- Alignment and selling pressure: Zero beneficial ownership and all options currently OTM reduce near-term selling pressure but also dampen realized alignment; retention is anchored in multi-year cliff and quarterly-vesting options plus two-year PSU/rTSRU cycles that can deliver value only on R&D and/or relative TSR execution .
- Retention risk vs. incentive potency: The 2024 shift to options and smaller performance awards (20% of median value) amid depressed share price makes equity upside highly contingent on clinical catalysts and relative TSR over 2024–2025; CIC terms (double-trigger) ensure adequate protection but avoid single-trigger windfalls .
- Governance safeguards: Prohibitions on hedging/pledging and option repricing without shareholder approval, plus clawback adoption, mitigate governance red flags and curb misaligned risk-taking .
- Shareholder temperature: Rising say-on-pay support in 2025 suggests investor acceptance of recalibrated pay design; however, value realization remains tied to achieving PSU milestones and outperforming biotech peers on TSR through the end of 2025 .