Bryan K. Phillips
SVP, General Counsel, Chief Compliance Officer and Corporate Secretary at INSP
Executive
About Bryan K. Phillips
Senior Vice President, General Counsel, Chief Compliance Officer, and Corporate Secretary at Inspire Medical Systems (INSP) since January 2021; age 53. Background includes Chief Legal Officer at Cerevel Therapeutics (2019–2021), 14 years at Surmodics culminating as SVP Legal & HR/General Counsel/Secretary, patent counsel at Guidant CRM (Boston Scientific), and earlier IP law firm practice; education: B.S. Mechanical Engineering (University of Kansas) and J.D. (University of Minnesota Law) . During his tenure, INSP delivered strong 2024 results: revenue $802.8M (+28% YoY), first full-year profitability with net income $53.5M and diluted EPS $1.75; gross margin 84.7% and operating income $36.1M, while TSR was -8.9% in 2024 but cum. TSR since the 2018 IPO is 642.1% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Cerevel Therapeutics Holdings, Inc. | Chief Legal Officer | 2019–2021 | Led legal function at public biopharma developing CNS therapies |
| Surmodics, Inc. | SVP Legal & Human Resources; General Counsel & Secretary; various roles | 2005–2019 | Senior legal and HR leadership at public medtech company |
| Guidant (Cardiac Rhythm Management Group) | Patent Counsel | 2001–2005 | IP counsel in implantable device therapies (now part of Boston Scientific) |
| Minneapolis-based IP law firm | Attorney | Pre-2001 | Early legal career in intellectual property practice |
External Roles
None disclosed in INSP filings for Bryan K. Phillips .
Fixed Compensation
| Metric | 2024 |
|---|---|
| Base Salary ($) | 431,983 |
| Target Bonus (%) | 60% of base salary under MIP |
| Actual MIP Bonus ($) | 255,043 (98.4% achievement on target) |
| Discretionary Bonus ($) | 50,000 (one-time, approved Dec 2024) |
Stock awards granted in 2024:
| Award Type | Grant Date | Units | Exercise Price | Grant-Date Fair Value ($) | Vesting |
|---|---|---|---|---|---|
| RSUs | 02/09/2024 | 2,694 | — | 524,980 | 1/3 each year over 3 years |
| Stock Options | 02/09/2024 | 4,376 | $194.87 | 512,342 | 25% at 1-year, then monthly over 36 months (4-year total) |
| PSUs (2024–2026) | 02/09/2024 | Target 5,388; Thresh. 2,694; Max 10,776 | — | 1,049,960 (at target) | 3-year cliff; payout 0–200% based on cumulative revenue (75%) and operating income (25%) |
Performance Compensation
Annual cash MIP (2024) – metrics and outcomes:
| Metric | Weight | Threshold | Target | Above-Target | Actual | Payout Contribution |
|---|---|---|---|---|---|---|
| Global Revenue ($MM) | 50% | 770.0 | 820.0 | 861.0 | 802.8 | 45.7% |
| Adjusted Operating Income ($MM) | 15% | 125.0 | 143.4 | 157.9 | 152.1 (36.1 + addback SBC) | 18.2% |
| Global Insurance Reimbursement Approvals (U.S. patients) | 10% | 19,000 | 24,000 | 29,000 | 23,017 | 9.5% |
| Quality/Regulatory/Product Development (objectives met) | 15% | 2 of 4 | 3 of 4 | 4 of 4 | 3 of 4 | 15.0% |
| Operations (Days Inventory On-Hand) | 10% | 45 days | 90 days | 135 days | 90 days | 10.0% |
| Total MIP Achievement | — | — | — | — | — | 98.4% |
PSUs – performance results and vesting:
| PSU Cohort | Performance Period | Metrics | Target/Actual | Payout |
|---|---|---|---|---|
| 2022 Grant | 2022–2024 | Cumulative Revenue (100%) | Target $1,500.0MM; Actual $1,835.5MM | 200% (max) |
| 2023 Grant | 2023–2025 | Revenue & Operating Income | Cumulative not yet above threshold as of 12/31/2024 | Reported at threshold |
| 2024 Grant | 2024–2026 | Revenue (75%) & Operating Income (25%) | In-progress | 0–200% potential |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (Shares) | 30,280 shares; <1% of outstanding |
| Options – Exercisable within 60 days (03/04/2025) | 23,916 shares underlying options |
| Unvested RSUs | 3,262 units; $604,710 market value at $185.38/share (12/31/2024 close) |
| PSUs – 2022 Grant (vested Feb 24, 2025) | 6,152 vested shares at 200% payout |
| PSUs – Unvested (2023, 2024 grants) | 1,519 (2023 threshold) and 2,694 (2024 threshold) units; reported at threshold values |
| 2024 Option Strike Prices vs 12/31/2024 Price | Strikes $194.87, $201.51, $227.53, $263.16 vs $185.38; out-of-the-money at FY-end |
| 2024 Exercises/Vesting | Options exercised: 0; RSUs vested: 569 shares ($123,251) |
| Ownership Guidelines | 1x base salary for executive officers; compliance required within 5 years (effective 7/27/2023). As of 12/31/2024, all executive officers met guidelines except Ban, Weatherby, Mann, Kelly (Phillips meets) |
| Anti-Hedging/Pledging | Hedging and short sales prohibited; pledging prohibited unless pre-approved (Audit Committee for officers/directors). No pledging disclosed for Phillips |
Employment Terms
Named Executive Officer Employment Agreement (Phillips):
- At-will; company notice of 1 month for termination without Cause; NEO resignation notice of 2 weeks (general NEO terms) .
- Non-compete and non-solicit covenants apply for 1 year post-termination .
- 280G cutback (no excise tax gross-ups) if beneficial to after-tax outcome .
Severance and change-of-control economics:
| Scenario (as of 12/31/2024) | Cash | Equity Acceleration | Other Benefits | Total |
|---|---|---|---|---|
| Termination Without Cause (no CoC) | $583,177 (9 months base + pro-rata bonus) | $0 | $21,440 (COBRA subsidies) | $604,617 |
| Change in Control (no termination) | $0 | $2,702,655 (assumes CoC equity treatment at greater of target or actual) | $0 | $2,702,655 |
| Termination Without Cause or For Good Reason in Connection with CoC (double trigger) | $691,173 (12 months base + target bonus) | $3,307,365 (options/RSUs/full acceleration of awards granted on/after agreement date; PSUs per CoC rules) | $28,586 (COBRA subsidies) | $4,027,124 |
Equity treatment under death/disability/retirement (Plan-level provisions):
- Death/Disability: Unvested options and RSUs fully accelerate; PSUs vest pro rata at target if ≥12 months into performance period .
- Qualifying Retirement (≥10 years service and age 60): Options accelerate; RSUs continue vesting on schedule; PSUs remain outstanding and are paid pro rata based on actual performance if ≥12 months into period .
Clawback:
- SEC/NYSE-compliant policy to recover erroneously awarded incentive compensation upon required accounting restatements .
Compensation Structure Analysis
- Strong pay-for-performance: 84% of non-CEO NEO target compensation variable and at-risk in 2024; PSU component emphasizes cumulative revenue (75%) and operating income (25%) to drive profitable growth .
- Equity mix evolution: Added RSUs in 2024 to align with peers and retention objectives; continued use of options and PSUs .
- Annual cash incentives tied to rigorous targets with linear interpolation above target; 2024 revenue target was ~31% above prior-year actuals .
- No excise tax gross-ups; 280G cutback provision .
- Anti-hedging/pledging controls and stock ownership guidelines to align interests; Phillips appears in compliance .
Peer group and say-on-pay:
- Compensation peer group includes medical device/health equipment companies (e.g., Axonics, Insulet, Penumbra, Shockwave, etc.) .
- Market reference: 50th percentile target, with flexibility based on role and performance .
- Say-on-pay approval ~97% at 2024 annual meeting; Board continues investor engagement .
Investment Implications
- Alignment: Phillips’ compensation is tightly linked to revenue and operating income via PSUs and to multi-dimensional operating goals via MIP; stock ownership guidelines and anti-hedging policy reinforce alignment .
- Selling pressure: Options largely out-of-the-money at 12/31/2024 (strikes above $185.38), and Phillips had zero option exercises in 2024; modest RSU vesting suggests limited near-term selling pressure from equity unwind .
- Retention risk: Standard NEO severance (9 months) and double-trigger CoC protections (12 months + equity acceleration) provide retention while avoiding shareholder-unfriendly gross-ups; plan-level retirement/death/disability accelerations add predictability .
- Execution track record: Company-level milestones in 2024 (FDA approval of Inspire V, first profitable year, 28% revenue growth) indicate operational execution during Phillips’ tenure leading legal/compliance, with high say-on-pay support signaling shareholder confidence in incentive design .