Lindsay A. Rosenwald, M.D.

About Lindsay A. Rosenwald, M.D.

Lindsay A. Rosenwald, M.D. (age 70) is Executive Chairman, Chief Executive Officer, and President of Fortress Biotech and has served on the board since October 2009 (CEO since December 2013). He holds a B.S. in finance (Penn State) and an M.D. (Temple University), and is a longtime biotech entrepreneur and investor (former Chairman of Paramount BioCapital, 1991–2008) . During his tenure, Fortress has remained loss-making while shifting toward equity-aligned pay; FY2022–FY2024 results show declining revenue and persistent negative EBITDA and net income (see table), and the company’s Pay vs. Performance table shows depressed TSR over 2021–2023 .

Financial performance (annual):

Pay vs. Performance (company disclosure):

Past Roles

External Roles

Fixed Compensation

Key features: nominal base salary; no reported non-equity incentive payouts for 2023–2024; “All Other” largely cash fees from partner-company directorships.

Notes:

• 2024 “All Other” reflects $50,000 cash fees each from Checkpoint, Mustang, and Journey for board service .
• Company reports Compensation Committee independence and oversight of executive pay programs .

Performance Compensation

Structure: equity-heavy, including restricted stock under the Fortress Long Term Incentive Plan (LTIP) and periodic restricted shares/RSUs/options at partner companies for related board roles.

1. Annual equity awards tied to “performance year”

• For 2024 performance: On January 1, 2025, award of 454,163 restricted Fortress shares (1% of then-outstanding) to Dr. Rosenwald under the LTIP .
• For 2023 performance: On January 1, 2024, award of 216,465 restricted Fortress shares (1% of then-outstanding) .

2. Reported grant-date values and option values (Company + subs) | Year | Stock awards (grant-date FV) | Option awards (grant-date FV) | Notes | |---|---:|---:|---| | 2023 | $805,920 | $104,000 | Includes subsidiary awards tied to board roles . | | 2024 | $1,103,032 | $64,500 | Includes Checkpoint, Journey, Avenue awards from board service . |

3. Performance metrics and vesting

• Fortress LTIP “market-cap plus service” condition: Restricted shares vest only if (a) market cap increases by at least $100M vs a specified reference date and (b) continuous service to July 16, 2025 (2025 framework) or involuntary separation prior; also vests upon change in control .
• Company states executives more recently receive restricted stock/RSUs that vest in installments over several years; subsidiaries also periodically grant equity for service .

4. Detailed metrics table (illustrative) | Metric | Weighting | Target | Actual/Status | Payout/Vesting | |---|---|---|---|---| | Fortress LTIP: Market-cap increase + service | Not disclosed | +$100M vs July 16, 2015 (or July 16, 2025 for post-2025 awards); service through July 16, 2025/2035 or involuntary separation | Not disclosed; condition-based | Vests upon conditions; also vests upon change in control . | | Annual cash bonus | — | Not disclosed | No payouts reported (2023–2024) | $0 reported . |

Equity Ownership & Alignment

Beneficial ownership (common) increased YoY with significant skin-in-the-game; includes warrants/units and substantial director holdings across partner companies.

• 2025 footnote details: includes 1,567,515 currently exercisable warrants; additional shares held through entities; excludes certain family trusts; the 2,332,840 figure includes currently exercisable instruments and unvested units vesting within 60 days .
• Policy: Company cites an Insider Trading Policy prohibiting hedging and speculative trading; no pledging disclosure noted in cited sections .
• Ownership guidelines: not discussed in cited sections.

Key outstanding awards and vesting schedules (as of 12/31/2024):

Employment Terms

• Employment agreements: Company has not entered into employment agreements with Dr. Rosenwald (nor with Mr. Weiss or Mr. Jin) .
• Severance/Change-in-control: No conventional salary+bonus multiples disclosed; however, LTIP restricted shares accelerate on change in control if in service at transaction date (single-trigger acceleration under plan terms cited) .
• Clawback: Policy adopted pursuant to Nasdaq rules; recovers erroneously awarded incentive-based comp paid within last 3 completed fiscal years if a restatement is required .
• Non-compete/Non-solicit/Garden leave: Not discussed in cited sections.
• Equity award timing/policy: Company discloses timing approach and equity plan governance in proxies .

Board Governance

• Role combination: CEO also serves as Chairman; the Board has determined this structure is in shareholders’ best interests at this time .
• Independence: Board determined Dr. Harvey, Messrs. Hoenlein, Klein, Lobell, and Lorenz are independent (as of March 27, 2025) .
• Committees and chairs (2024–2025):
  • Audit: Klein (Chair), Lobell, Harvey; all independent; 4 meetings in 2024 .
  • Compensation: Lobell (Chair), Klein, Harvey; independent; met once in 2024 .
  • Nominating & Corporate Governance: Lobell (Chair), Hoenlein, Klein .

Related-Party Transactions and Interlocks

• Avenue (September 2023) private placement: Avenue sold 767,085 shares (~$550,000 aggregate) to Fortress and Dr. Rosenwald at $0.717 per share (consolidated closing bid), in compliance with Nasdaq rules .
• Employment of immediate family member: Dr. Rosenwald’s son was employed as Director of Strategy; ~ $160,000 compensation in 2023; departed November 2023 .
• Management Services Agreements (MSAs): Fortress has MSAs with partner companies/subsidiaries (e.g., Checkpoint, Mustang, Cyprium, Helocyte, Urica, etc.), typically five-year terms with automatic five-year extensions, fees recorded/eliminated in consolidation; counterparties required to utilize certain designated services at market prices; Fortress and affiliates (including all Fortress directors) are contractually exempted from fiduciary duties to partner companies on corporate opportunities .

Compensation Structure Analysis

• Mix shift toward equity: Larger equity grants (including LTIP restricted stock) and no non-equity incentive payout in 2023–2024 suggest greater reliance on stock-based incentives, aligning compensation with company and market-cap outcomes .
• Annual “1%” restricted stock grants: The LTIP awards of 1% of outstanding shares (for 2023 and 2024 performance) concentrate incentives in share price, capitalization, and service continuity .
• Pay-for-performance signals: The plan’s market-cap trigger (pre-2025 and post-2025 frameworks) introduces a measurable outcome (market cap +$100M vs reference date) before vesting .
• Committee independence: Compensation Committee composed entirely of independent directors .

Performance & Track Record

• Operating performance: FY2022–FY2024 show declining revenue and negative EBITDA and net income (see table above, S&P Global values).
• Disclosed TSR: Fortress’s Pay vs. Performance table shows the value of a $100 investment declining to $6 by 2023, underscoring weak equity performance through that period .
• Strategic developments: Company and partner updates (e.g., Checkpoint’s UNLOXCYT approval and proposed Sun Pharma transaction; Journey’s Emrosi approval) are detailed in the 2024 10-K, but benefits and timing carry execution risk .

Director-Service Economics (Board + Subsidiaries)

• “All Other Compensation” for 2024 includes $50,000 cash fees each from Checkpoint, Mustang, and Journey for board service, evidencing meaningful external board fee income .
• Subsidiary/partner equity grants: Regular awards from partner companies (e.g., Checkpoint, Journey, Avenue) for director roles provide additional alignment but create multi-entity exposure .

Risk Indicators & Red Flags

• Governance concentration: CEO/Chair dual role; no lead independent director disclosed in the cited sections .
• Change-in-control acceleration: LTIP vesting accelerates upon corporate transaction; potential for significant share supply upon triggers .
• Related-party network: MSAs and intercompany transactions, plus contractual corporate-opportunity exemptions for Fortress and directors at partner companies, raise conflict and governance scrutiny risks .
• Hedging prohibited; pledging not discussed: Insider Trading Policy bans hedging/speculative trading; no pledging disclosure in cited sections .

Investment Implications

• Alignment: Low cash salary and large equity awards (including “1%” share grants for 2023/2024 performance) align Rosenwald’s incentives to share price, market cap, and service continuity; beneficial ownership ~20% underscores skin-in-the-game .
• Overhang/vesting catalysts: Multiple Fortress restricted tranches vest on/around July 16, 2025 (LTIP condition date) and on specified dates for partner awards; monitor Form 4s and liquidity around these dates for potential selling pressure .
• Governance risk premium: Dual role (CEO/Chair), extensive related-party ties and corporate-opportunity waivers at partner companies can support a governance discount and require ongoing monitoring of related-party approvals and committee independence .
• Pay vs performance: Despite equity-heavy design, company-reported TSR was severely negative through 2023, suggesting that equity awards tied to market-cap triggers may not pay out without sustained operational and capital market execution .

Appendix: Additional Quantitative Exhibits

1. Summary Compensation Table (Company disclosure) | Metric | 2023 | 2024 | |---|---:|---:| | Salary | $62,665 | $62,665 | | Bonus | — | — | | Stock awards (FV) | $805,920 | $1,103,032 | | Option awards (FV) | $104,000 | $64,500 | | Non-equity incentive plan awards | — | — | | All other compensation | $150,000 | $150,000 | | Total | $1,122,585 | $1,380,197 |

2. Beneficial Ownership (Company disclosure) | Date | Shares Owned | Options/Warrants/RSUs (≤60 days) | Total Beneficial | % | |---|---:|---:|---:|---:| | 3/27/2024 | 2,863,905 | 1,569,181 | 4,433,086 | 23.0% | | 4/17/2025 | 4,111,417 | 2,332,840 | 6,444,257 | 20.2% |

3. Outstanding Equity (as of 12/31/2024) | Item | Detail | |---|---| | Fortress LTIP restricted shares | 348,838 and 216,465 vest 7/16/2025; 81,286 vest on market-cap + service condition by 7/15/2025 . | | Checkpoint restricted shares | 104,295 with vesting across 2025–2027; includes 50,000 vesting in three equal annual installments from 5/14/2024 (3). | | Journey restricted shares | 9,728 vest on 7/8/2025 (9). | | Avenue options | 30,000 @ $2.46 expiring 9/23/2034; other Avenue option tranches noted (8)(5). |

4. LTIP Terms (selected) | Provision | Summary | |---|---| | Market-cap trigger | Vesting if market cap increases by ≥$100M vs reference date and service to milestone date (or involuntary separation) . | | Change in control | Vesting upon corporate transaction/change in control (single-trigger cited in plan disclosures) . | | Plan horizon | LTIP extended from 2025 to 2035; post-2025 awards use July 16, 2025 as new reference date/milestone . |

Citations:

• Executive background, roles, and governance structure .
• Compensation tables and award details .
• Outstanding equity and vesting schedules .
• Beneficial ownership .
• Clawback policy and employment agreement status .
• Insider trading (hedging/speculation ban) .
• MSAs and corporate opportunity exemption .
• Pay vs performance TSR/net income .
• 10-K business updates/risk profile .