Patrick Murphy
iRhythm TechnologiesAbout Patrick Murphy
Patrick Murphy is iRhythm’s Chief Business Officer and Chief Legal Officer, serving as CLO since November 2021 and CBO since April 2023; he is 46, with a J.D. from St. Louis University and a B.S. from Truman State University, and is a member of the State Bar of California . Company performance under the current executive team includes 2024 revenue of $591.8M (+20.1% YoY), a five‑year revenue CAGR “over 22%,” and 2024 adjusted EBITDA of −$7.7M (−1.3% margin) . Pay‑versus‑performance disclosures show cumulative TSR values for a fixed $100 investment of $132.43 in 2024 (vs $157.20 in 2023, $137.57 in 2022), contextualizing stockholder experience during Murphy’s tenure .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| DexCom, Inc. | Executive Vice President & Chief Legal Officer | 2016–2021 | Led legal/compliance at a high-growth medtech; experience in regulation and corporate transactions . |
| Stradling Yocca Carlson & Rauth | Attorney (Corporate finance, M&A, general corporate) | 2003–2016 | Specialized in corporate finance, mergers & acquisitions, and general corporate matters . |
External Roles
| Organization | Role | Years |
|---|---|---|
| State Bar of California | Member | Not stated |
Fixed Compensation
Multi-year compensation for Patrick Murphy (grant-date fair values for equity):
| Metric (USD) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $440,000 | $457,344 | $513,098 |
| Bonus (sign-on/other) | $478,500 | — | — |
| Stock Awards (RSUs/PSUs FV) | $4,057,106 | $4,566,853 | $2,163,546 |
| Non-Equity Incentive Plan (Annual Cash) | $357,200 | $275,730 | $284,002 |
| All Other Compensation | $31,268 | $33,852 | $37,173 |
| Total | $5,364,074 | $5,333,779 | $2,997,819 |
Base salary and target bonus:
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary at Dec 31 | $455,000 | $468,650 |
| Target Bonus % of Salary | 60% | 60% |
| Actual 2024 Bonus Paid | — | $284,002 (101% of target) |
2024 annual equity awards (grant-date):
| Award Type | Target Value | Units Granted | Grant Date |
|---|---|---|---|
| RSUs | $1,000,000 | 8,593 | Feb 28, 2024 |
| PSUs | $1,000,000 | 8,593 (target) | Feb 28, 2024 |
Notes:
- RSUs vest 25% annually over 4 years from a vesting commencement date of March 1, 2025 .
- Company does not currently grant stock options as part of executive programs .
Performance Compensation
2024 Short‑Term Incentive (STI) framework and outcomes:
| Metric | Weighting | Target | Actual | Payout % | Vesting |
|---|---|---|---|---|---|
| Revenue | 75% | $590.0M | $591.8M | 102% | Cash paid 2025 |
| Adjusted EBITDA | 25% | $23.3M | $24.6M (excl. $32.4M IPR&D) | 105% | Cash paid 2025 |
| Corporate Factor | — | — | — | 103% | — |
Individual payout for Murphy: Corporate factor 101%, individual factor 100%, resulting payout 101% of target (2024 bonus $284,002) .
Long‑Term Incentives (PSUs) – 2022–2024 cycle (earned/certified Feb 2025):
| PSU Cycle | Unit Volume CAGR Targets | Actual Unit Volume CAGR | TSR Modifier | Murphy Target PSUs | Murphy Earned PSUs |
|---|---|---|---|---|---|
| 2022–2024 | Threshold 13%; Target 18%; Max 23% | 19.1% (121.4% of target) | 33rd percentile ⇒ 83.3% (applies to CEO cycle) | 25,430 | 30,861 |
Special 2023 Strategic PSU Award (performance period Jul 1, 2023–Jun 30, 2026):
- Three operational goals (each 1/3 weighting): cumulative patient registrations (≥10M), adjusted EBITDA margin >10% over rolling two quarters, new product/service innovations and operational milestones; TSR modifier can adjust ±25% subject to caps; vesting subject to continued employment through determination date .
Equity Ownership & Alignment
Beneficial ownership and alignment metrics:
| Metric | 2024 (as of Mar 1, 2024) | 2025 (as of Mar 3, 2025) |
|---|---|---|
| Beneficial Shares | 9,551 | 29,342 |
| Shares Outstanding | 30,984,010 | 31,600,070 |
| Ownership % | 0.031% (9,551/30,984,010) | 0.093% (29,342/31,600,070) |
Vested vs unvested (as of Dec 31, 2024):
- Unvested RSUs: 8,593 units; $774,831 market value at $90.17/share .
- Unearned PSUs (targets in flight): 2024 grant 8,593; 2023 grant 9,282; Special Strategic PSU 13,589; market values shown in the outstanding awards table .
- 2024 Stock Vested: 8,679 shares; value realized $883,175 (aggregate of all vestings in 2024) .
Ownership policies:
- Stock ownership guidelines: EVP level = 2× annual base salary; all executives are in compliance .
- Hedging/pledging prohibited; margin accounts disallowed unless approved (and company generally prohibits pledging) .
Insider selling pressure indicators:
- Significant scheduled RSU/PSU vesting in 2025+ (e.g., RSUs vest annually; PSUs cliff vest after 3 years), combined with large realized value in 2024 suggests ongoing liquidity events; however, hedging/pledging is barred, and ownership guidelines encourage retention .
Employment Terms
- Employment arrangement: At‑will offer letter; no fixed‑term executive employment agreements .
- Severance policy (Executive CIC Policy; double‑trigger only):
- Change‑of‑Control termination: 15 months base salary; up to 15 months COBRA premiums; 100% of target bonus; full acceleration of unvested equity (performance awards at target unless otherwise specified) .
- Termination outside CoC: 12 months base salary; up to 12 months COBRA premiums .
- Estimated benefits for Murphy (as if event occurred on Dec 31, 2024, share price $90.17):
- Outside CoC: $468,650 severance; $39,280 medical; total $507,930 .
- With CoC: $585,813 severance; $49,100 medical; $281,190 bonus; $6,205,801 accelerated equity; total $7,121,904 .
- Clawbacks: Dodd‑Frank‑compliant recovery policy (restatements) and misconduct clawback policy .
- Retirement vesting program (SVP+): continued vesting eligibility based on age/service thresholds; none of the NEOs currently eligible .
- Non‑compete/non‑solicit/garden leave: not disclosed in proxy .
Performance & Track Record
- 2024 achievements under Murphy’s remit: led PMDA regulatory application resulting in clearance of Zio in Japan; advanced health‑economic analyses across adjacent conditions; identified/evaluated strategic opportunities culminating in BioIntelliSense licensing/investment .
- Company KPIs: 2024 revenue $591.8M (+20.1% YoY), adjusted EBITDA −$7.7M (−1.3% margin), cash/equivalents/marketable securities $535.6M at year‑end .
- TSR context (fixed $100 investment): $132.43 (2024), $157.20 (2023), $137.57 (2022), $172.84 (2021), $348.38 (2020) .
Compensation Structure Analysis
- Mix: 2024 LTI split 50% PSUs / 50% RSUs (market‑leading PSU emphasis for non‑CEO NEOs); no special equity grants in 2024 .
- Shift toward profitability/regulatory remediation: 2025 STI weighting changed to 50% revenue / 40% adjusted EBITDA / 10% strategic FDA remediation objective, adding explicit regulatory milestones to pay‑for‑performance design .
- Special awards history: August 2023 special strategic PSUs to retain and align new leadership team to operational, patient, and innovation goals; stockholders sought tighter disclosures and limits on future special awards; company committed to no one‑time awards absent extraordinary circumstances .
- Governance enhancements: evergreen provision removed from 2016 Equity Incentive Plan (November 2024) to address dilution concerns .
Compensation Peer Group (Benchmarking)
- Selection criteria: sector (public medtech/high tech), market cap $1B–$9B, revenue $200M–$1.8B, headcount 750–7,000 .
- 2024 peer group includes Lantheus, Penumbra, Masimo, Tandem Diabetes Care, among others (full list in proxy) .
- Independent adviser: Aon engaged; peer practices used to calibrate program design and award values .
Say‑on‑Pay & Shareholder Feedback
- 2024 say‑on‑pay: 49% approval; broadened outreach to investors representing ~82% of outstanding shares; board/comp committee participation .
- Actions taken: enhanced STI metric disclosure; added FDA remediation metric; removed evergreen; committed to limit future special awards; increased profitability weighting in STI .
Equity Ownership & Alignment Details
| Policy/Practice | Details |
|---|---|
| Stock Ownership Guidelines | EVPs must hold 2× base salary; all executives in compliance . |
| Hedging/Pledging | Prohibited under Insider Trading Policy; margin/pledging disallowed absent approval (company policy prohibits pledging) . |
| Option Use | Company does not currently grant stock options in executive programs . |
Risk Indicators & Red Flags
- Hedging/pledging of company stock: prohibited (alignment positive) .
- Tax gross‑ups: none for severance/change‑in‑control or perquisites (shareholder‑friendly) .
- Special equity awards: 2023 strategic PSUs exist; company committed to avoid future one‑time awards absent extraordinary circumstances (mitigates pay inflation risk) .
- Say‑on‑pay: 49% approval in 2024 (engagement/improvement actions taken) .
- Related‑party transactions: none above $120,000 (other than standard comp arrangements) .
Investment Implications
- Alignment: Strong equity mix (50% PSUs) with unit‑volume CAGR and TSR linkage, plus explicit FDA remediation metric in 2025 STI, supports performance alignment—though 2023 special awards warrant monitoring for windfall risk if targets are met early .
- Retention/Change‑of‑Control: Double‑trigger CoC with full equity acceleration and 100% target bonus drives retention but creates potential event‑driven payout leverage (~$7.12M modeled for Murphy), which is typical yet material for downside scenarios .
- Selling pressure: Material scheduled vesting (RSUs annually; PSUs cliff) and 2024 realized vesting value ($883k) suggest ongoing liquidity needs; however, hedging/pledging prohibitions and ownership guidelines mitigate misalignment risk .
- Governance signals: Removal of evergreen and enhanced STI disclosures reflect responsiveness to investor feedback following a low 2024 say‑on‑pay vote, reducing dilution and improving transparency .