Kathy Lee-Sepsick
About Kathy Lee-Sepsick
Founder of Femasys Inc., Kathy Lee-Sepsick is 57 and has served as President and Chief Executive Officer since 2004; she has been a director since February 2004 and previously served as Chairperson from 2004–2021 . She holds an MBA and a BS in Biochemistry from Rutgers University and has over 200 patents globally tied to Femasys products and candidates . The 2025 proxy does not disclose TSR, revenue growth, or EBITDA growth attributable to her tenure; the company emphasizes regulatory and product milestones as performance goals within equity awards, including FDA de novo approval for FemaSeed achieved on September 22, 2023, which triggered vesting of 100,000 options .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Novoste Corporation | Senior executive responsibilities at start-up; strategic, operational, executive roles | Not disclosed | Instrumental across product and company life cycle stages |
| SaluMedica | Senior executive responsibilities at start-up; strategic, operational, executive roles | Not disclosed | Instrumental across product and company life cycle stages |
| Terumo Medical Corporation | Product management | Not disclosed | Managed strategic partner Boston Scientific relationship |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Not disclosed in proxy | — | — | No other public company directorships or external committee roles disclosed in 2025 proxy |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $500,000 | $542,000 |
| Bonus ($) | $270,000 | $81,300 |
| Equity Awards (Grant-Date Fair Value, $) | $214,751 | $139,117 |
| All Other Compensation ($) | $34,674 | $37,917 |
| Total ($) | $1,019,425 | $800,334 |
Notes:
- Bonuses are discretionary, performance-based per employment agreement; specific annual bonus metrics/weightings are not disclosed .
Performance Compensation
Annual Incentive (Cash)
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Annual performance bonus (discretionary) | Not disclosed | Not disclosed | Not disclosed | $270,000 (2023) ; $81,300 (2024) | Cash; annual cycle |
Long-Term Equity (Options/Performance Triggers)
| Grant Date | Instrument | Shares | Exercise Price ($) | Performance Metric | Target | Actual/Payout | Vesting Schedule |
|---|---|---|---|---|---|---|---|
| 03/18/2016 | Stock Options | 55,556 | 1.71 | FemBloc IDE approval | IDE approved | 55,556 vest upon IDE approval; status not separately disclosed as achieved | Vests on IDE approval |
| 03/18/2016 | Stock Options (unearned) | 111,111 | 1.71 | FemBloc PMA approval | PMA approved | Unvested until PMA approval | Vests on PMA approval |
| 06/30/2017 | Stock Options | 166,668 | 3.24 | Time-based | 4-year | 25% per year | 25% annually from 06/01/2017 |
| 12/13/2019 | Stock Options | 5,556 | 6.12 | Time-based | 4-year | 25% per year | 25% annually from 11/01/2019 |
| 01/26/2022 | Stock Options | 100,000 | 13.00 | FemaSeed FDA de novo approval | De novo approved | Vested on 09/22/2023 (achievement) | Single-trigger upon approval |
| 07/03/2023 | Stock Options | 270,400 total (67,600 exercisable; 202,800 unexercisable at FY-end) | 0.49 | Time-based | 4-year | 25% per year | 25% annually from 07/03/2023 |
| 07/03/2023 | Stock Options (fully vested) | 271,900 | 0.49 | — | — | 100% vested on grant | Immediate vest |
| 02/01/2024 | Stock Options | 204,900 | 0.80 | Time-based | 4-year | 25% per year | 25% annually from 02/01/2024 |
Plan-level mechanics:
- No automatic acceleration on Change in Control; double-trigger acceleration applies if awards are assumed and employment terminates without cause or due to death/disability within 24 months post-transaction (unvested awards vest; RSUs/PSUs settle within 30 days) .
- Clawback policy applies to incentive-based compensation per Dodd-Frank and Nasdaq standards; filed with 10-K .
Equity Ownership & Alignment
Beneficial Ownership (as of April 8, 2025)
| Component | Shares (#) | % of Outstanding |
|---|---|---|
| Total Beneficial Ownership | 1,188,859 | 4.23% (out of 27,239,885 shares) |
| Directly Owned | 277,778 | — |
| Family Trust (Lee-Sepsick Family Trust) | 72,223 | — |
| Options Exercisable within 60 Days (all vested) | 838,858 | — |
Additional alignment indicators:
- Company has no standalone anti-hedging policy; insiders subject to general insider trading policy; clawback in place .
- Ownership guidelines and pledging disclosures are not provided in the proxy .
Outstanding Options at FY-End (December 31, 2024)
| Grant Date | Exercisable (#) | Unexercisable (#) | Unearned (#) | Exercise Price ($) | Expiration |
|---|---|---|---|---|---|
| 03/18/2016 | 55,556 | — | 111,111 | 1.71 | 03/18/2026 |
| 06/30/2017 | 166,668 | — | — | 3.24 | 06/30/2027 |
| 12/13/2019 | 5,556 | — | — | 6.12 | 12/13/2029 |
| 01/26/2022 | 100,000 | — | — | 13.00 | 01/26/2032 |
| 07/03/2023 | 67,600 | 202,800 | — | 0.49 | 07/03/2033 |
| 07/03/2023 | 271,900 | — | — | 0.49 | 07/03/2033 |
| 02/01/2024 | — | 204,900 | — | 0.80 | 02/01/2034 |
Vesting cadence (indicative upcoming supply):
- 07/03/2023 time-based grant: 202,800 unexercisable at FY-end; 25% annual tranches are scheduled (next tranche ~50,700 on 07/03/2025) .
- 02/01/2024 time-based grant: 204,900 unexercisable at FY-end; 25% annual tranches (~51,225 per year from 02/01/2024) .
Employment Terms
| Term | Detail |
|---|---|
| Agreement | Amended and restated employment agreement dated June 1, 2021 (President & CEO) |
| Base Salary (2024) | $542,000 |
| Bonus Eligibility | Discretionary, performance-based annual bonus |
| Term | Indefinite; terminable for just cause by company; at-will by executive with 30 days’ notice |
| Non-Compete/Non-Solicit | 1-year non-compete and non-solicit post-termination |
| Severance (Non-CoC) | 12 months base salary + prorated annual bonus + 12 months subsidized COBRA |
| Severance (CoC, within 12 months) | 24 months base salary + 2× annual target bonus + 24 months subsidized COBRA + full acceleration of outstanding equity awards granted by company |
| Plan-level CoC Mechanics | If awards are assumed, double-trigger vesting/settlement within 24 months upon qualifying termination; if not assumed or certain conditions apply, the committee may accelerate/settle awards at or prior to transaction |
Board Governance
- Role: Class III Director; Founder, President & CEO; not independent under Nasdaq rules .
- Chair history: Served as Chairperson 2004–2021; current Chair is independent director Charles Larsen, mitigating CEO–Chair dual-role concerns .
- Committees: Audit, Compensation, and Nominating committees comprise independent directors; Kathy is not listed as a member of these committees .
- Board attendance: Board met 5 times in 2024; all directors attended ≥75% of meetings during their service periods; all attended 2024 annual meeting .
- Director compensation: Kathy receives no additional compensation for board service; director pay policy applies to non-employee directors only .
Related Party Transactions and Policies
- Related party employment: Company employs Kathy’s daughter, Kayla Carlton; total compensation and benefits of $190,000 in 2024, stated as consistent with similarly situated employees; not a Section 16 officer .
- Insider trading/hedging: Insiders subject to company insider trading policy; no standalone anti-hedging policy disclosed; clawback policy adopted and filed with 10-K .
Compensation Structure Analysis
- Mix shift: 2024 total compensation declined vs 2023 due to lower annual bonus and reduced grant-date equity awards ($800,334 vs $1,019,425), indicating variability in at-risk pay year-over-year .
- Performance equity: Awards include regulatory milestone triggers (e.g., FemaSeed de novo approval achieved 09/22/2023); product approval milestones are emphasized over pure financial metrics .
- Plan share pool: Proposal to add 3,000,000 shares to 2021 Plan increases authorized to 6,858,597 to sustain equity-based incentives; auto “evergreen” at 4% of outstanding shares each Jan 1 remains in place .
Equity Compensation Plan Capacity (as of Dec 31, 2024)
| Category | Securities to be issued on exercise | Wtd-Avg Exercise Price ($) | Securities remaining for future issuance |
|---|---|---|---|
| 2021 Plan (including ESPP) | 2,489,096 | 1.35 | 1,159,017 |
| 2015 Plan | 485,123 | 2.89 | n/a |
| Inducement awards | 250,000 | 1.89 | n/a |
| Total | 3,224,219 | — | 1,159,017 |
Risk Indicators & Red Flags
- Anti-hedging gap: Absence of standalone anti-hedging policy may weaken alignment and risk controls vs best practice .
- Nepotism optics: Employment of CEO’s family member (with disclosed compensation) can be a governance sensitivity, albeit noted as consistent with peers .
- Supply overhang: Significant low-strike options (e.g., $0.49 and $0.80) with scheduled vesting could create periodic selling pressure upon vesting; next notable tranches from 07/03/2025 and annually on 02/01 for 2024 grant .
- Equity plan dilution: Proposed 3,000,000-share increase to 2021 Plan expands potential dilution and equity grant capacity .
Compensation Peer Group & Say-on-Pay
- Not disclosed: Compensation benchmarking peer group, target percentile, and say-on-pay vote outcomes are not provided in the 2025 proxy .
Expertise & Qualifications
- Education: MBA and BS in Biochemistry, Rutgers University .
- Industry experience: Nearly three decades in medical technologies; senior roles at Novoste and SaluMedica; product management at Terumo; >200 patents .
- Board qualification: Founder/CEO perspective and life sciences background cited by board as qualifications .
Investment Implications
- Alignment: Material vested and near-term vesting equity exposure plus long-duration options create strong equity alignment; however, the lack of a standalone anti-hedging policy is a governance gap investors should monitor .
- Retention/CoC risk: Robust CoC protections (24 months salary + 2× target bonus and full acceleration) reduce turnover risk but elevate potential transaction costs and may influence M&A dynamics .
- Trading signals: Upcoming vest dates (07/03/2025 and annual 02/01 tranches) and low exercise prices imply potential episodic selling pressure; monitoring Form 4 filings around these dates is prudent .
- Dilution: The 3,000,000-share increase proposal to the 2021 Plan supports talent retention but raises dilution risk; approval would lift authorized shares to 6,858,597 .