William H. Lewis
INSMEDAbout William H. Lewis
William H. Lewis is 56 and has served as INSM’s CEO since September 2012, Chair of the Board since November 2018, and a director since September 2012; he holds a B.A. from Oberlin College and both an M.B.A. and J.D. from Case Western Reserve University . In 2024, INSM’s stock price rose by over 120% and pay-versus-performance TSR translated to $289 on a $100 initial investment; the CEO’s compensation actually paid rose accordingly, reflecting strong equity alignment . INSM’s revenues grew sequentially over FY22–FY24 and ARIKAYCE revenues increased 19% year-over-year in 2024, underpinning compensation outcomes tied to corporate milestones rather than traditional financial metrics, with EBITDA remaining negative given the company’s investment stage .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Insmed Incorporated | Chair and CEO | 2018–present | Led pipeline advancement (ASPEN readout, brensocatib NDA priority review), commercialization of ARIKAYCE, and corporate financing/term loan renegotiation . |
| Insmed Incorporated | President and CEO | 2012–2018 | Oriented company to rare disease strategy; advanced ARIKAYCE to accelerated approval (2018) . |
| Aegerion Pharmaceuticals, Inc. | Co‑founder; President; CFO | 2005–2011 | Re‑oriented strategy to rare disease; enabled successful IPO (2010) . |
| Wells Fargo & Co. | Executive | 2002–2004 | Finance roles contributing to capital markets experience . |
| Robertson Stephens Capital | Executive | 2000–2002 | Investment banking experience . |
| JPMorgan Chase & Co. | Executive | 1995–2000 | Global finance experience . |
| U.S. Government Foreign Service | Foreign Service | 1989–1992 | International systems exposure . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| NewAmsterdam Pharma Company N.V. (Nasdaq: NAMS) | Chair of the Board of Directors | Current | Public company chairmanship indicates external governance experience . |
Fixed Compensation
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $734,850 | $780,000 | $810,000 |
| Target Annual Bonus (% of Salary) | 70% (set for 2022) | 75% | 75% |
| Non‑Equity Incentive Paid ($) | $514,400 | $702,000 | $1,215,000 |
| All Other Compensation ($) | $42,699 | $106,374 | $93,591 |
Performance Compensation
| Equity Award Type | Grant Date | Shares/Units | Exercise Price | Vesting | Notes |
|---|---|---|---|---|---|
| Stock Options | 1/4/2024 | 186,970 | $29.13 | 25% at 1st anniversary; then 12.5% every 6 months until 4 years | Performance‑aligned via stock price appreciation . |
| RSUs | 1/4/2024 | 37,869 | — | 25% annually over 4 years | Time‑vested retention . |
| Stock Options | 5/13/2024 | 209,320 | $25.83 | 25% at 1st anniversary of the first day of the month following grant; then 12.5% every 6 months | Performance‑aligned via stock price appreciation . |
| RSUs | 5/13/2024 | 42,707 | — | 25% annually from first day of month following grant | Time‑vested retention . |
| PSUs (2022 award) | 1/6/2022 | Target units (grant-date high-case value $6,013,135) | — | Vested Feb 2025 upon milestones + service + market TSR; payout at 250% of target based on ≥90th percentile TSR vs Nasdaq Biotech Index | Milestones: ASPEN topline by late Q2’24 and FDA acceptance of brensocatib NDA; TSR modifier up to 2.5x; continuous employment condition . |
| Annual Cash Incentive Metric | Weighting | Target | Actual | Payout Factor | Vesting |
|---|---|---|---|---|---|
| Advancement of Respiratory Franchise | 80% | Not disclosed (commercial sensitivity) | Achieved/Exceeded (ASPEN positive, ENCORE complete; NDA filed; launch readiness; 19% ARIKAYCE rev growth) | 200% corporate multiplier | Cash (annual). |
| Advancement of Research Objectives | 10% | Not disclosed | IND cleared for INS1201 (DMD) | Included in 200% corporate multiplier | Cash (annual). |
| Enhancement of Corporate Operations | 10% | Not disclosed | System implementations; AI exploration; procurement enhancements | Included in 200% corporate multiplier | Cash (annual). |
Notes: For the CEO, annual cash incentive is based solely on corporate goals (no individual component); the Board exercised discretion to lift total corporate performance to 200% in light of transformative achievements and >120% stock price increase in 2024 . CEO’s 2024 cash bonus was $1,215,000 .
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Total Beneficial Ownership | 1,842,613 shares (1.0% of 181,820,010 outstanding) |
| Breakdown – Options (currently exercisable) | 1,036,316 shares held directly; plus 175,530 via the William Lewis Family Legacy Trust; 198,140 via Katie Procter Dynasty Trust |
| Unvested RSUs (as of 12/31/2024) | 218,962 units (market value $15,117,136 at $69.04) |
| Unearned PSUs (as of 12/31/2024; subsequently vested Feb 2025) | 153,710 units (market value $10,612,138 at $69.04; paid at 250% upon vesting in Feb 2025) |
| 2024 Option Exercises | 146,280 shares exercised; $3,848,803 value realized |
| 2024 RSU Vested | 74,210 shares vested; $2,026,376 value realized |
| Ownership Guidelines | CEO: 300% of base salary; compliance achieved for all NEOs as of record date |
| Hedging/Pledging Policy | Hedging prohibited; pledging requires CFO/CLO approval and Compensation Committee approval for executives; no pledges approved in 2024 |
Employment Terms
| Provision | Terms |
|---|---|
| Employment Start | CEO since September 2012; Chair since November 2018; Director since September 2012 . |
| Severance – Change in Control (Double Trigger) | 2x base salary + 2x target bonus + pro‑rata target bonus; full vesting of equity (PSUs per award terms); up to 18 months COBRA . |
| Severance – Non‑CIC (or >2 yrs post‑CIC) | 1.5x base salary + 1x target bonus (paid over 18 months); pro‑rata bonus based on actual performance; full vesting of time‑based equity grants ≥1 year old . |
| Death/Disability | Accrued obligations; pro‑rata bonus (actual performance); full vesting of equity (PSUs per award terms); insurance benefits . |
| Non‑Compete / Non‑Solicit | 12‑month non‑compete, non‑solicit, and client diversion restrictions post‑termination . |
| Golden Parachute Illustrative Value (CIC Termination at 12/31/2024) | Cash severance $2,835,000; pro‑rata bonus $607,500; benefits $370; accelerated equity $66,818,976; total $70,261,846 . |
| Golden Parachute (Non‑CIC termination at 12/31/2024) | Cash severance $1,822,500; pro‑rata bonus $607,500; benefits $370; accelerated equity $34,137,181; total $36,567,551 . |
| Clawback Policy | Nasdaq 10D-compliant no‑fault recovery of excess compensation on restatement; discretionary recovery for fraud/intentional misconduct covering equity (incl. time‑vested), cash incentives, severance; no recoupments in 2024; policy filed as 10‑K exhibit (effective Oct 2, 2023) . |
| Tax Gross‑Ups | No excise tax gross‑ups; payments require termination for CIC benefits . |
Board Governance
- Dual Role: Combined Chair/CEO structure since November 2018 with a Lead Independent Director (David R. Brennan) providing governance counterbalance (executive sessions, agenda input, advisor oversight, committee engagement) . Mr. Lewis is not independent due to employment; eight of nine directors are independent and all committees are fully independent .
- Committee Assignments: Independent directors chair Audit (McGirr), Compensation (Brennan), Nominations & Governance (Anderson), Science & Technology (Desjardins); Lewis is not listed as a member of standing committees .
- Attendance: Board held eight meetings in 2024; all directors attended ≥75% of meetings during their tenure; all directors attended the 2024 annual meeting .
- Director Compensation: Non‑employee directors receive cash retainers and RSUs; Mr. Lewis receives no additional compensation for Board service (as an employee director) .
Compensation Committee Analysis
- Committee Composition: David R. Brennan (Chair), Alfred F. Altomari, Leo Lee – all independent .
- Consultant: WTW retained as independent advisor; $460,000 fees to the Compensation Committee in 2024; separate WTW team retained by management ($345,000) for workforce project; independence affirmed .
- Peer Group: 2024 compensation peer group approved August 2023; includes ACAD, HALO, AGIO, FOLD, PTCT, ARWR, SAGE, SGMO, BLUE, SRPT, BPMC, TVTX, CORT, RARE; Insmed positioned ~43rd–48th percentile market cap and 81st percentile headcount at analysis time .
- Say‑on‑Pay: 94% approval at 2024 Annual Meeting; >95% at 2023 Annual Meeting, signaling investor support for design and operation .
- Risk Review: Committee and WTW concluded incentive design does not encourage excessive risk‑taking; governance safeguards in place .
INSM Financial Context (Performance Baseline)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($) | $245,358,000 | $305,208,000 | $363,707,000 |
| EBITDA ($) | −$465,832,000* | −$672,488,000* | −$777,695,000* |
Values retrieved from S&P Global.*
Additional Signals and Disclosures
- Insider Selling Pressure: CEO exercised 146,280 options in 2024 (value realized $3.85M) and had 74,210 RSUs vest ($2.03M), indicating liquidity events but not necessarily pledging or hedging, which are prohibited absent approvals .
- Option Grant Practices: Annual grants generally in January and May at regular meetings; options expire at 10 years with exercise price equal to grant-date close; vesting schedules disclosed .
- Section 16 Compliance: Executives and directors timely filed all Section 16 reports in 2024 .
- 8‑K Updates: No CEO compensation amendments disclosed; May 2024 shareholder approval of Incentive Plan Amendment; April 2025 CCO resignation with consulting arrangement (equity continues to vest during consulting period) .
Investment Implications
- Pay-for-Performance Alignment: CEO compensation is heavily “at risk” and equity‑based (options, RSUs, PSUs), with 2024 cash incentive tied 100% to corporate goals and Board discretion applied amid transformative pipeline and stock performance; PSUs vested at 250% upon brensocatib NDA acceptance and 90th+ percentile TSR, indicating strong alignment with value creation and timely execution .
- Retention/Severance Economics: Double‑trigger CIC protections (2x salary and bonus, full equity acceleration) and meaningful accelerated equity values ($66.8M as of 12/31/2024) reduce retention risk but imply potential transaction costs; non‑CIC severance (1.5x salary + 1x bonus) and 12‑month non‑compete reinforce retention post‑termination .
- Governance Checks on Dual Role: Combined Chair/CEO structure is mitigated by a Lead Independent Director and fully independent committees; employee director status means no board fees for Lewis, preserving alignment via equity rather than board cash compensation .
- Ownership and Trading Signals: Significant beneficial ownership including exercisable options and unvested RSUs/PSUs; 2024 exercises/vestings provided liquidity but pledging remains restricted with no approvals, reducing leverage‑related risk .
- Shareholder Support: Strong say‑on‑pay outcomes (94% in 2024; >95% in 2023) and independent consultant oversight (WTW) suggest low governance friction around executive pay design, even as financial metrics (EBITDA) remain negative due to pipeline investment stage .
Citations: All bracketed references correspond to the retrieved SEC filings and documents in this analysis.