Stephen Connelly
EquilliumAbout Stephen Connelly
Stephen Connelly, Ph.D., is Equillium’s co‑founder and Chief Scientific Officer, a role he has held since January 2018; he has also served on the Board since March 2017 and is age 43 . He holds a B.S. in Medicinal Chemistry and a Ph.D. in Biological Chemistry (University of Exeter, UK) and an MBA from UC San Diego’s Rady School; he has published 30+ scientific papers and patents . In 2024, the Compensation Committee determined Equillium achieved 100% of its corporate goals, but management and the Committee elected to pay no cash bonuses to conserve cash, signaling cash preservation discipline during the period .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Equillium | Consultant (pre‑hire) | Mar 2017–Jan 2018 | Supported company formation and scientific strategy prior to CSO appointment . |
| BioMed Ventures (owned by BioMed Realty, LP) | Principal | Mar 2016–Mar 2017 | Early‑stage life sciences investing and portfolio support . |
| aTyr Pharma (public) | Director, Business Development & Therapeutic Alliances | Mar 2014–Mar 2016 | Partnering and alliance management for pipeline assets . |
| The Scripps Research Institute | Senior Scientist | Mar 2012–Mar 2014 | Led drug discovery projects across multiple therapeutic areas . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| None disclosed | — | — | No current external public company directorships disclosed for Dr. Connelly in the executive officer section; contrast provided for other executives where applicable . |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 414,000 | 428,490 |
| Target Bonus (% of base) | 40% | 40% |
| Actual Bonus Paid ($) | 157,320 | 0 (bonuses withheld to conserve cash despite 100% goal achievement) |
Compensation committee uses Radford benchmarking to set targets; target bonus percentages were unchanged in 2024 .
Performance Compensation
Annual Incentive (2024 Corporate Goals and Payout Decision)
| Goal | Weight | Achievement Highlights | Achieved? | Payout Outcome |
|---|---|---|---|---|
| Deliver EQUATOR interim data to Ono (100 patients) | 50% | Interim data delivered Aug 2024; DMC recommended continuing as planned | Yes | 0% cash paid (companywide decision to conserve cash) |
| Deliver EQUALISE final data package to Ono | 20% | Package delivered Mar 2024; clinically meaningful responses and favorable safety | Yes | 0% |
| Announce topline data from Alopecia Areata study | 10% | Positive efficacy signal; favorable safety (June 2024) | Yes | 0% |
| Complete EQ302 in vitro/in vivo characterization by Q2 | 5% | Completed on time with positive results | Yes | 0% |
| Identify formulations of EQ302 | 5% | Formulations identified for further development | Yes | 0% |
| Strategic transaction (in‑license/acquire or funded outbound) | 10% | Acquired Ariagen in Q4 2024 | Yes | 0% |
| Total | 100% | 100% of goals achieved | — | 0% companywide cash payout |
Long‑Term Incentives (Stock Options)
- 2024 grant: 175,000 options at $0.7343 strike, granted Jan 2, 2024; vests 25% on first anniversary (Jan 2, 2025), remainder monthly over 36 months; full vesting acceleration for double‑trigger CoC termination .
- 2023 grant: 175,000 options initially at $1.06 strike, repriced Aug 14, 2023 to $0.785 with retention‑period premium if exercised early; standard 4‑year vesting; double‑trigger CoC vesting acceleration .
| Grant Date | Shares Granted (#) | Exercise Price ($) | Vesting | Notes |
|---|---|---|---|---|
| Jan 2, 2024 | 175,000 | 0.7343 | 25% at 1‑yr; then monthly over 36 months | Double‑trigger acceleration within 12 months post‑CoC |
| Jan 3, 2023 | 175,000 | 0.785 (repriced from $1.06) | 25% at 1‑yr; then monthly over 36 months | Premium price applies if exercised before end of retention period |
Insider selling pressure indicator: 2024 grant unlocks 25% (43,750 options) on Jan 2, 2025, then ~3,646 options/month thereafter under standard schedule, increasing potential saleable supply as vesting progresses .
Equity Ownership & Alignment
Beneficial Ownership (as of April 1, 2025)
| Holder | Shares Beneficially Owned (#) | % of Outstanding | Composition |
|---|---|---|---|
| Stephen Connelly, Ph.D. | 1,542,616 | 4.3% | 993,000 shares held + 549,616 options exercisable within 60 days |
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Outstanding option holdings (Dec 31, 2024 snapshot):
Grant Date Exercisable (#) Unexercisable (#) Strike ($) Expiration Feb 13, 2019 90,000 — 0.785 Feb 12, 2029 Dec 10, 2019 52,500 — 0.785 Dec 9, 2029 May 19, 2020 42,534 — 0.785 May 18, 2030 Jan 4, 2021 97,916 2,084 0.785 Jan 3, 2031 Jan 19, 2022 91,145 33,855 0.785 Jan 18, 2032 Jan 3, 2023 83,854 91,146 0.785 Jan 2, 2033 Jan 2, 2024 — 175,000 0.7343 Jan 1, 2034 -
Alignment policies and practices:
- Company prohibits hedging and pledging of company stock; maintains a clawback policy; no excise tax or other gross‑ups .
- Beneficial ownership footnotes list direct holdings and options; no pledges are indicated for Dr. Connelly in these disclosures .
Employment Terms
- At‑will employment governed by an amended and restated offer letter (June 2018) .
- Severance (non‑change‑in‑control): 6 months base salary continuation and 6 months COBRA premiums upon termination without cause, subject to a release .
- Change‑in‑control (double‑trigger within 1 month prior to, or 12 months after CoC/asset sale): 12 months base salary, target annual bonus, and 12 months COBRA premiums; full acceleration of all then‑outstanding options upon qualifying termination; benefits conditioned on a release .
- No single‑trigger CoC benefits and no excise tax or similar gross‑ups per executive compensation practices .
Compensation Structure Analysis
- Mix and risk: Dr. Connelly’s compensation emphasizes equity/options with at‑risk annual cash incentives; 2024 target bonus remained at 40% of base, but payout was 0% despite 100% goal achievement due to cash conservation, shifting realized pay mix further to equity .
- Option repricing (Aug 14, 2023): Repriced significant portions of outstanding options to $0.785 for NEOs, including 585,034 underlying shares for Dr. Connelly; vesting and expirations unchanged; early exercise before end of retention period requires paying a premium equivalent to the original strike (a governance flag increasing near‑term option moneyness) .
- Equity grant cadence: 2024 option grant size maintained at 2023 levels, suggesting consistency in LTI opportunity while managing burn and ownership concentration .
Investment Implications
- Alignment vs liquidity: With 1.54 million beneficial shares (4.3%), including 549,616 options imminently exercisable, Dr. Connelly has substantial skin‑in‑the‑game, aligning incentives with shareholders, but ongoing monthly vesting from 2023–2024 grants increases potential insider sellable supply and could introduce periodic selling pressure post‑vesting unlocks .
- Governance risk marker: The 2023 option repricing materially reduced exercise prices for executive options, a shareholder‑sensitive action; while no share counts increased and retention premiums apply to early exercises, repricing typically draws scrutiny and can be viewed as reducing performance risk for the executive cohort .
- Cash discipline signal: Zero cash bonus for 2024 despite 100% goal achievement underscores management’s capital preservation stance during a development phase—supportive of runway but tilts realized pay toward equity, increasing reliance on future stock appreciation for compensation realization .
- Retention and CoC protections: Standard 6‑month severance and double‑trigger CoC (12 months salary + target bonus + full option acceleration) provide market‑typical downside protection without single‑trigger or gross‑ups, balancing retention with shareholder‑friendly safeguards .