Hervé Hoppenot
INCYTEAbout Hervé Hoppenot
Hervé Hoppenot is Chair of the Board and President & CEO of Incyte, age 65, serving as director since 2014 and appointed Chair in May 2015; he previously led Novartis Oncology and held senior commercial roles at Novartis and Aventis/RPR . Incyte’s executive pay emphasizes performance: CEO equity awards are 60% performance shares tied to relative TSR, 20% stock options, 20% RSUs, with clawbacks and strict anti-hedging/pledging policies; most important performance measures include total product revenues, pipeline progression, and TSR .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Novartis Pharmaceuticals (Novartis Oncology) | President | 2010–2014 | Led global oncology business; commercial leadership and strategy |
| Novartis Pharmaceuticals | EVP, Chief Commercial Officer (Oncology); Head of Global Product Strategy & Scientific Development | 2006–2010 | Drove global product strategy and commercialization |
| Novartis Pharmaceuticals (Oncology) | SVP, Head of Global Marketing | 2003–2006 | Led global oncology marketing |
| Aventis Pharmaceuticals (formerly Rhône-Poulenc) | VP Oncology US | 2000–2003 | Ran US oncology operations |
| Rhone-Poulenc Rorer Pharmaceuticals | VP US Oncology Operations | 1998–2000 | Managed US oncology business |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Other Outside Public Boards | None | — | No outside public board service disclosed |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 1,227,151 | 1,291,929 | 1,344,707 |
| Non-Equity Incentive (Annual Cash Bonus) ($) | 1,602,926 | 1,554,703 | 2,202,829 |
| All Other Compensation ($) | 56,142 | 53,187 | 53,298 |
| Total Compensation ($) | 16,669,368 | 16,659,526 | 17,459,546 |
| 2025 Base Salary Setting | Value |
|---|---|
| 2024 Base Salary ($) | 1,348,533 |
| 2025 Increase (%) | 3.5% |
| 2025 Base Salary ($) | 1,395,731 |
| 2024 All Other Compensation Detail | Amount ($) |
|---|---|
| Life Insurance Premiums | 7,524 |
| Financial Planning Services (incl. tax gross-up $8,061) | 23,061 |
| Statutory Fee (Director of EU Subsidiary) | 4,400 |
| 401(k) Matching Contributions | 18,313 |
Performance Compensation
Annual Incentive Plan (2024)
| Metric | Threshold ($) | Target ($) | Maximum ($) | Actual Payout ($) | Notes |
|---|---|---|---|---|---|
| Annual Cash Incentive | 1,112,540 | 1,483,386 | 2,818,434 | 2,202,829 | Plan varies with performance; most important measures include total product revenues, pipeline, TSR |
2024 Equity Grants (Design and Awards)
| Instrument | Grant Date | Quantity / Targets | Exercise/Base Price ($) | Grant Date Fair Value ($) | Vesting / Performance |
|---|---|---|---|---|---|
| Stock Options | 01/18/2024 | 97,566 (footnote (5)) | 61.18 | 1,996,144 | Options vest per schedules described; typical 7–10 year terms and multi-year vesting |
| Stock Options | 07/15/2024 | 61,189 (footnote (6)) | 64.25 | 1,319,079 | Options vest per schedules described |
| Performance Shares (Relative TSR) | 07/15/2024 | Threshold 61,538; Target 123,076; Max 246,152 | — | 7,907,633 | 3-year cliff vest; multiplier 50%–200% based on discrete percentile rank; threshold at 25th percentile; target at 50th; 90th percentile max; cap at 100% if absolute TSR negative |
| RSUs | 07/15/2024 | 41,025 (footnote (4)) | — | 2,635,856 | Vests per RSU schedule; generally equal installments over 4 years |
| 2024 CEO Equity Mix | Weighting |
|---|---|
| Performance Shares | 60% of equity grant value |
| Stock Options | 20% of equity grant value |
| RSUs | 20% of equity grant value |
Earned Performance Shares (Prior Cycles and Vesting)
| Award Cohort | Earned (%) | Vesting Date |
|---|---|---|
| Performance shares granted July 2022 (US executives) | 110.7% | Third anniversary of Jul 2, 2022 grant (Jul 2, 2025), subject to continued service |
| Performance shares granted Dec 2022 (Opzelura goals) | 123.0% | Nov 30, 2025, subject to continued service |
PSU Design (Relative TSR)
| Metric | Weighting | Threshold | Target | Maximum | Special Cap |
|---|---|---|---|---|---|
| Relative TSR vs fixed NBI-based peer group | 100% of PSUs for 2024–2025 | 25th percentile (50% multiplier) | 50th percentile (100% multiplier) | 90th percentile (200% multiplier) | If absolute TSR is negative, cap at 100% even if >50th percentile |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (Apr 15, 2025) | 1,662,988 shares; less than 1% of outstanding |
| 2024 Stock Vested | 101,591 shares; value realized $6,052,364; 46,684 shares withheld for taxes |
| 2024 Option Exercises | None |
| CEO Ownership Guideline | 6x annual base salary; CEO has met requirement |
| Hedging/Pledging | Prohibited by insider trading policy (no short-term trading, margin, short sales, options, pledging, hedging/monetization) |
Employment Terms
| Provision | Key Terms |
|---|---|
| Initial RSU make-whole grant | 400,000 RSUs in Jan 2014; vesting one-sixth annually 2014–2019 |
| Life & Disability Insurance (legacy) | Company paid premiums for six years starting 2014 for $15 million benefit; tax gross-ups removed in Apr 2015; premiums stopped in 2019 at CEO’s suggestion |
| Post-Retirement Vesting | For awards granted after Jul 15, 2019 and before Dec 31, 2024, continued vesting after retirement (post-Dec 31, 2024) subject to covenant compliance; options exercisable for remainder of term |
| Covenants | Non-solicitation/non-hiring and non-disparagement for 2 years post-termination; breach triggers forfeiture of unvested equity and recovery of gains in prior 24 months |
| Termination without cause or for good reason (not in CoC) | Cash severance equal to 1.5x annual base salary plus greater of target or prior-year actual bonus; pro-rata current-year bonus; equity: options/RSUs vest as if employed 18 more months; options exercisable 180 days; COBRA premiums up to 12 months; outplacement up to 12 months; other accrued amounts |
| CoC termination without cause or for good reason (double trigger) | Cash severance equal to 3x current annual base salary plus greater of target or prior-year actual bonus; full vesting of unvested RSUs and options; performance shares vest at target and settle; options exercisable 12 months; benefits continued up to 36 months; outplacement up to 12 months; other accrued amounts |
| Termination without good reason during CoC period | Pro-rata target bonus; salary/deferrals/vacation through termination |
| Potential Payments upon CoC Termination (as of Dec 31, 2024) | Cash $10,136,041; Medical/Insurance $76,448; Equity acceleration $29,720,081; Other $623,127; Total $40,555,697 |
Board Governance
- Board Service: Director since 2014; Chair since May 2015; no committee memberships; not independent as CEO .
- Dual-role implications: Board combines Chair/CEO with robust Lead Independent Director (Julian C. Baker) representing Baker Funds (~16% ownership) to mitigate independence concerns; duties include agenda, information approval, liaison, and presiding over executive sessions .
- Majority voting policy and independence focus disclosed; Board maintains annual review of leadership structure .
Compensation Committee Analysis
- Committee composition: all independent directors; uses independent consultant Compensia; conducts peer benchmarking; annual say-on-pay .
- Equity mix remains performance-heavy; CEO 2024 grant date target value $12.4M; planned 2025 target $14.0M; PSUs cliff vest over three years; stock options 10-year life and multi-year vest align with long development cycles; double-trigger CoC equity vesting .
Risk Indicators & Red Flags
- Anti-hedging/pledging; no option repricing; no excise tax gross-ups for golden parachutes; robust clawback policy compliant with SEC/Nasdaq plus legacy restatement clawback .
- Perquisite tax gross-ups appear for certain benefits (e.g., financial planning services), albeit small in magnitude .
- Large potential CoC payout and full acceleration of equity could create event-driven selling pressure if a transaction occurs .
Equity Ownership & Beneficial Owners (Context)
| Holder | Shares | % of Outstanding |
|---|---|---|
| Baker Bros. Advisors LP & affiliates | 30,866,714 | 15.9% |
| Julian C. Baker | 31,224,792 (overlapping structure) | 16.1% |
| Vanguard | 22,519,381 | 11.6% |
Investment Implications
- Retention risk appears low given post-retirement vesting protections on grants through 2024, strong equity ownership compliance, and long equity vesting tails; covenants and clawbacks add retention leverage .
- Near-term vesting events (Jul 2, 2025 and Nov 30, 2025) for previously earned performance shares are potential supply catalysts from tax withholding or 10b5-1 plan sales; monitoring Form 4s and preset plans is warranted .
- Pay-for-performance alignment is solid: majority at-risk equity, relative TSR-only PSUs for 2024–2025 with appropriate caps; annual incentive targets/payouts indicate above-target operating execution in 2024, supporting confidence in pipeline/commercial priorities .
- Governance: CEO/Chair dual role is mitigated by an empowered Lead Independent Director representing a 16% shareholder, reducing independence concerns; however, event-driven CoC economics (~$40.6M total potential) and full equity acceleration merit attention in deal scenarios .