Paul Mellett
ENANTA PHARMACEUTICALSAbout Paul Mellett
Paul J. Mellett served as Enanta’s Chief Financial and Administrative Officer from January 1, 2024, after being Senior Vice President, Finance & Administration and Chief Financial Officer since September 2003; he was 69 as of December 15, 2024 and holds a B.S. in Business Administration from Boston College . Prior roles include CFO at Essential Therapeutics (2001–2003), CFO & VP Administration at GelTex (acquired by Genzyme in 2000), CFO at Marshall Contractors (1994–1997), and Audit Partner at Deloitte & Touche (promoted 1989) . Enanta’s pay-versus-performance disclosure shows cumulative TSR falling to 23 by FY2024 vs 113 in FY2022 and 124 in FY2021, with continuing net losses and negative compensation “actually paid” tied to stock declines . Paul was placed on medical leave in August 2025 and subsequently passed away in early September 2025, prompting interim finance leadership appointments and an acknowledgment at a September conference .
Company performance (USD):
| Metric | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|
| Revenue ($) | $97,074,000* | $86,160,000* | $79,204,000* | $67,635,000* |
| EBITDA ($) | $(106,239,000)* | $(120,871,000)* | $(134,836,000)* | $(119,355,000)* |
| Values retrieved from S&P Global.* |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Essential Therapeutics (public biotech) | SVP & CFO | Apr 2001–Aug 2003 | Public-company finance leadership during pipeline advancement |
| GelTex Pharmaceuticals (public biotech; acquired by Genzyme) | CFO & VP Administration | Pre–Dec 2000 | Scaled finance/admin through acquisition by Genzyme |
| Marshall Contractors (construction for pharma/biotech/semiconductor) | CFO | 1994–1997 | Managed finance for sector-focused construction firm (acquired by Fluor in 1996) |
| Deloitte & Touche LLP | Audit Partner | Promoted 1989; employed 1977–1994 | Led audits; built technical accounting expertise |
Fixed Compensation
Calendar-year base salary and target bonus:
| Metric | CY 2022 | CY 2023 | CY 2024 |
|---|---|---|---|
| Base Salary ($) | $457,300 | $475,600 | $489,900 |
| Target Bonus (% of salary) | 40% | 40% | 40% |
Fiscal-year cash incentive outcomes and other comp:
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Non-Equity Incentive ($) | $192,803 | $177,537 | $163,277 |
| Other Compensation ($) | $19,211 (401k/insurance) | $19,424 (401k/insurance) | $22,098 (401k/insurance) |
Notes:
- Variable cash weighting: corporate 70%, individual 30% for non-CEO NEOs; company-level performance rating 90% for CY2023 and 75% for CY2024 .
- FY totals reflect Enanta’s proration method (25% prior calendar year + 75% current) .
Performance Compensation
2024 equity grants (award mechanics):
| Award Type | Grant Date | Target / Amount | Price/Terms | Vesting/Performance |
|---|---|---|---|---|
| Stock Options | 11/22/2023 | 83,000 shares | $8.99 strike | 4-year vest, equal quarterly installments; 10-year term |
| rTSRUs | 12/19/2023 | 5,250 target units | Monte Carlo fair value $51,923 target | Pays 0–150% based on NBI-relative TSR; 40th percentile=50%, 60th=100%, 75th=150%; measurement: 60-day windows ending Dec 31, 2023 vs Dec 31, 2025 |
| PSUs | 12/19/2023 | 5,250 target units | Fair value target $48,353 | 0–150% based on R&D milestones across clinical, research, and external value-driving goals over 2 years ending Dec 31, 2025 |
| One-time PSUs | 1/4/2024 | 415 units | $4,997 grant-date FV (milestone already achieved) | Immediate vest per Committee determination (settled with other 2021 PSUs in Feb 2024) |
Historical performance outcomes (two-year periods; payout as % of target):
| Award | 2022–2021 | 2023–2022 | 2024–2023 |
|---|---|---|---|
| PSUs | 100% | 70% | 150% |
| rTSRUs | 127% | 0% | 0% |
| Total (% of target shares earned) | 114% | 35% | 75% |
Context signals:
- 100% of outstanding options were out of the money as of Dec 31, 2024; 68% were >500% OTM; closing price was $5.75, with weighted average option strike at $41.57 and 7.3 years remaining average life—dampening near-term exercise/selling pressure .
Equity Ownership & Alignment
| Ownership Element | Amount | Details |
|---|---|---|
| Total Beneficial Ownership | 255,608 shares (1.20%) | Includes (i) 79,510 common shares and (ii) 176,098 options exercisable within 60 days |
| Unexercisable Options (Sep 30, 2024) | 103,551 shares | Grants with remaining vest: 1,925 (11/20/2020), 8,875 (11/19/2021), 25,313 (11/23/2022), 67,438 (11/22/2023) |
| Unvested RSUs (service-based) | 25,050 shares | RSUs across 2020–2022 grants remaining to vest; market value computed at $10.36/share in table |
| Unvested PSUs (target) | 5,250 (Dec 19, 2023 grant) | 0–150% payout based on 2024–2025 R&D goals |
| Unvested rTSRUs (target) | 5,250 (Dec 19, 2023 grant) | 0–150% payout based on NBI-relative TSR through Dec 31, 2025 |
| Pledging/Hedging | Prohibited | Insider trading policy bans hedging and pledging for employees and directors |
| Option Repricing | Prohibited without stockholder approval | Explicit anti-repricing policy |
2024 realizations:
- Vested/settled stock awards: 12,170 shares realized value $129,622; no options exercised by Paul in FY2024 .
Employment Terms
| Scenario | Cash Severance | Bonus Severance | Benefits | Equity Treatment |
|---|---|---|---|---|
| Without Cause / Good Reason (non-CoC) | 6 months base | None | Up to 6 months | No acceleration |
| Double-trigger Change in Control (CoC + termination within 12 months) | 12 months base | 100% of target bonus | Up to 12 months | All unvested options/RSUs fully vest; PSUs vest at target number of shares |
Estimated payouts (as of Sep 30, 2024):
| Scenario | Salary ($) | Bonus ($) | Benefits ($) | Other ($) | Modified Equity ($) | Total ($) |
|---|---|---|---|---|---|---|
| Non-CoC | $489,900 | — | $9,636 | $39,084 | — | $538,620 |
| CoC + Termination | $489,900 | $195,960 | $19,272 | $39,084 | $451,778 | $1,195,994 |
Other governance policies:
- Compensation clawback (3-year lookback for restatements) effective Oct 2, 2023 .
- No related person transactions since FY2024; Audit Committee oversees related-party policy .
Investment Implications
- Pay-for-performance alignment: Paul’s equity mix emphasized options and 2-year PSUs/rTSRUs; option value impaired by deep OTM status, shifting realized value to PSU achievement. In FY2024 the Committee reduced option value targets toward the 40th percentile and relied on PSUs/rTSRUs to restore to 50th percentile if targets met .
- Selling pressure: With 100% of options OTM at year-end 2024 and weighted average strike far above spot, insider selling via option exercise was structurally limited—reducing near-term dilution/selling signals .
- Retention and succession: Medical leave in Aug 2025 followed by Paul’s passing in Sep 2025 introduced finance leadership transition risk; interim principal financial/accounting officers were designated, mitigating continuity gaps .
- Change-in-control economics: Double-trigger severance and full time-based equity acceleration plus PSUs at target create predictable economics in an M&A event; quantified CoC payouts provide clarity on potential transaction costs .
- Shareholder feedback: 79% say-on-pay support in 2024; Committee responded with more modest equity awards and program adjustments, indicating responsiveness to investors .
- Peer benchmarking: Compensation targets reference ~50th percentile of a biotech peer group with revenues up to $200M and market caps generally $100M–$1B, updated in 2024; Alpine Rewards advises .
Notes and Sources
- Executive biography, compensation tables, grants, ownership, policies, and severance: Enanta DEF 14A filed Jan 27, 2025 .
- Corporate performance ratings and pay-versus-performance metrics: DEF 14A .
- Interim finance leadership and succession: Form 8-K (Aug 27, 2025) and conference transcript remarks (Sep 2025) .
- Company performance (Revenue, EBITDA): Values retrieved from S&P Global.*