Thomas McCourt
IRONWOOD PHARMACEUTICALSAbout Thomas McCourt
Thomas McCourt, 67, is Chief Executive Officer (since June 2021) and a director of Ironwood Pharmaceuticals (IRWD). He joined Ironwood in 2009, serving as SVP/Chief Commercial Officer, President (2019–2021), Interim CEO (Mar 12–Jun 2, 2021), then CEO; he holds a B.S. in Pharmacy from the University of Wisconsin . 2024 pay design emphasized equity (c.73% of NEO total comp) with PSUs tied 50/50 to absolute TSR (aTSR) and relative TSR (rTSR), and the annual bonus calibrated to corporate performance (70% factor for 2024) . Shareholder support for say‑on‑pay was ~94% in 2024, indicating strong investor alignment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Ironwood Pharmaceuticals | Chief Executive Officer; Director | 2021–present | Led LINZESS commercialization with AbbVie; pivot to GI/rare; drove equity-heavy pay-for-performance design . |
| Ironwood Pharmaceuticals | President; Interim CEO | 2019–2021 | Oversaw commercial execution; stewarded CEO transition in 2021 . |
| Ironwood Pharmaceuticals | SVP Marketing & Sales; Chief Commercial Officer | 2009–2019 | Built U.S. commercial platform; launched and achieved blockbuster status for LINZESS . |
| Amgen | Led U.S. brand team for denosumab | 2008–2009 | Pre‑launch leadership for major biologic . |
| Novartis | Directed ZELNORM launch/growth; VP Strategic Marketing & Operations | 2001–2008 | IBS-C/CIC category experience; GI franchise leadership . |
| Astra‑Merck | Founding team; led medical affairs/science liaisons; Brand Manager PRILOSEC/NEXIUM | — | Early commercial and medical affairs leadership in GI . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Pliant Therapeutics (Nasdaq: PLRX) | Director; Compensation Committee member | Current | Public company board service . |
| American Society of Gastrointestinal Endoscopy (ASGE) | Board of Trustees | Current | Non‑profit governance in GI . |
| Acceleron Pharma (acquired) | Director; Audit Committee member; Chair, Nominating & Governance | Prior | Public board/committee experience . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 806,000 | 834,210 | 867,568 |
| Target Bonus (% of base) | 75% | 75% | 75% |
| Actual Annual Cash Bonus ($) | 453,375 | 750,780 | 455,473 |
Performance Compensation
- Annual Cash Incentive Program structure: CEO payout equals company performance factor; 2024 factor 70%; 2023 factor 120%; 2022 factor 75% .
| Year | Corporate Performance Factor | CEO Individual Factor | Payout vs Target | Actual Bonus ($) |
|---|---|---|---|---|
| 2022 | 75% | 75% | 75% | 453,375 |
| 2023 | 120% | 120% | 120% | 750,780 |
| 2024 | 70% | 70% | 70% | 455,473 |
- Long‑term equity (2024): equal mix RSUs and PSUs; PSUs split 50% aTSR and 50% rTSR; 3‑year performance period Mar 1, 2024–Feb 28, 2027 .
| 2024 Grant (CEO) | Grant Date | Target/Units | Grant‑date Fair Value ($) |
|---|---|---|---|
| RSUs | 3/5/2024 | 264,876 | 2,468,644 |
| rTSR PSUs (target) | 3/5/2024 | 132,438 | 1,137,642 |
| aTSR PSUs (target) | 3/5/2024 | 132,438 | 1,116,446 |
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2024 PSU Metrics (performance period to 2/28/2027) :
- aTSR stock-price hurdles (30‑day avg): 50% at $16.38; 100% at $17.09; 200% at $19.22; 400% at $21.36 .
- rTSR vs peer group: 50% at 25th percentile; 100% at 50th; 200% at 75th; capped at 100% if negative TSR .
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2023 PSU Metrics (performance period to 2/28/2026) :
- aTSR: 50%/100%/200%/400% vesting at specified 30‑day stock‑price targets; threshold and target already certified met for portions in 2024 .
- rTSR: 50%/100%/200% at 25th/50th/75th percentile .
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2022 rTSR PSU Outcome: rTSR percentile 30% → 59% attainment (3‑year period ended 12/31/2024) .
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Vesting notes: 2023 RSUs for the CEO vest 33.3% annually on each approx. anniversary; 2024 PSU performance period as above; RSU timing for 2024 awards per plan footnotes (time‑based) .
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Realized equity activity (liquidity/overhang signals):
- 2024: 574,911 shares vested (RSUs/PSUs), value realized $7,356,332 .
- 2023: exercised 110,962 options (near expiration), value realized $46,816; 242,469 shares vested, $2,688,303 value .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 1,759,798 shares (1.1% of outstanding as of 3/31/2025) . |
| Components | Includes 918,164 options exercisable within 60 days of 3/31/2025 and 26,172 RSUs vesting 5/14/2025 . |
| Outstanding Options Detail | Multiple tranches (e.g., 97,500 @ $13.91 exp 3/16/2025; 179,056 @ $9.12 exp 3/1/2026; 166,018 @ $14.93 exp 2/27/2027; 142,404 @ $12.95 exp 2/21/2028; 384,982 @ $11.49 exp 1/29/2029; 45,704 @ $11.78 exp 5/1/2029) . |
| Stock Ownership Guidelines (Execs) | CEO must hold ≥4x base salary; others ≥1x; excludes vested in‑the‑money options and unearned PSUs; measured annually; retention requirement if below threshold . |
| Hedging/Pledging | Hedging prohibited; generally prohibits holding in margin accounts or pledging as collateral . |
Employment Terms
| Provision | Involuntary Termination (no CoC) | Change‑of‑Control Termination (Double‑Trigger) |
|---|---|---|
| Cash Severance (Base) | 18 months (CEO) | 24 months (CEO) |
| Bonus | Pro‑rated target for year; prior‑year actual if unpaid; plus full target x1.5 (CEO) | Pro‑rated target for year; prior‑year actual if unpaid; plus full target x2.0 (CEO) |
| COBRA Subsidy | Up to 18 months (CEO) | 24 months (CEO) |
| Time‑based Equity | Vesting credit for 18 months plus next vest date pro‑rata; remaining awards stay outstanding for potential CoC treatment | Full acceleration of time‑based equity at termination/change date |
| PSUs | Remain outstanding; eligible to vest per performance (pro‑rated) through period (aTSR up to 12 months; rTSR through performance period) | Earned at target (or higher for rTSR if CoC stock performance lifts percentile) then vest quarterly over remaining period; on double‑trigger, earned but unvested PSUs vest in full |
| Options | Vested option exercise window extended up to 24 months (subject to CoC timing) | Vested option exercise window extended up to 24 months (or 3 months post‑CoC if later) |
| Non‑Compete/Other | Proprietary information, IP and non‑compete agreements in place; if company enforces non‑compete, certain vested NQSO exercise periods extend by one year . | |
| Clawback/Tax Gross‑Ups | Dodd‑Frank/Nasdaq‑compliant clawback adopted Oct 2023; no tax gross‑ups; double‑trigger CoC required . |
- Estimated CEO benefits if triggered on 12/31/2024 (stock close $4.43):
- Involuntary (no CoC): Cash severance $1,301,352; NEIP $1,626,690; RSU acceleration $2,462,057; Other benefits $75,787; Total $5,465,886 .
- CoC Termination: Cash severance $1,735,136; NEIP $1,952,028; RSUs $2,712,427; PSUs $2,222,101; Other benefits $81,049; Total $8,702,741 .
Board Governance
- Board service: Director since 2021; not independent due to employment .
- Leadership structure: Separate independent Chair (Julie McHugh); board rotates chair approximately every five years to enhance oversight independence .
- Committees: McCourt serves on no board committees; all committees fully independent .
- Attendance: In 2024, each incumbent director attended at least 75% of board and applicable committee meetings; eight directors attended the 2024 AGM .
- Say‑on‑Pay: ~94% approval in 2024 .
Director Service Details (Committees)
| Director | Audit | Governance & Nominating | Compensation & HR |
|---|---|---|---|
| Thomas McCourt (CEO) | — | — | — |
| Committee Chairs (for reference) | Audit: C. Moukheibir | Gov/Nom: A. Denner | Comp & HR: A. Dreyfus |
Performance & Track Record
- Commercial leadership: LINZESS is the #1 prescribed branded treatment in the U.S. for adults with IBS‑C and CIC (IQVIA 2024) .
- 2024 results/context: $340.4M U.S. collaborative revenue from LINZESS (down YoY on net price and reserve adjustments); $103.5M cash from operations; ended 2024 with $88.6M cash/equivalents .
- Pipeline execution: Positive Phase 3 STARS data for apraglutide in SBS‑IF; rolling NDA initiated Jan 2025 .
- Strategic resets: Ended recruitment in IW‑3300 IC/BPS Phase 2 to reassess; exited apraglutide aGvHD; 50% workforce reduction (primarily field sales) approved Jan 17, 2025 to streamline around pipeline .
- Leadership transitions: CFO and CBO resignations in late 2024; CFO seat filled Jan 27, 2025 (Gregory Martini) after interim designation by CEO as PFO .
Compensation Peer Group (Benchmarking)
- The Compensation & HR Committee leverages competitive assessments by its independent consultant (Alpine) and peer group analysis in setting pay .
- 2023 disclosed peer set included ACAD, ADMA, ALKS, FOLD, APLS, RCUS, ARWR, CDMO, BCRX, BPMC, CPRX, CHRS, CORT, CYTK, DCPH, DNLI, EXAS, EXEL, FGEN, HALO, INSM, ICPT, IONS, KNSA, LGND, MYGN, NTRA, NVAX, ORGO, PCRX, PTCT, RGNX, SUPN, SNDX, TVTX, VNDA, VCYT, VCEL, VIR, XNCR .
Equity Vesting & Potential Insider Selling Pressure
- Significant vesting flow: 574,911 shares vested for McCourt in 2024 (RSUs/PSUs), value realized $7.36M, which may create periodic liquidity/selling needs for tax or diversification .
- Option activity near expiry: 110,962 options exercised in 2023 with de minimis value realized; footnote indicates exercise and sale as options were expiring .
Risk Indicators & Red Flags
- No hedging/pledging permitted for executives/directors (limits leverage/hedge misalignment risk) .
- No tax gross‑ups; double‑trigger CoC; robust clawback adopted (shareholder‑friendly) .
- Organizational risk: Large workforce reduction and late‑2024 senior departures elevate near‑term execution and retention risk despite severance protections .
Employment & Contract Features (Retention/Transition)
- Executive severance agreements with clear non‑compete/non‑solicit, double‑trigger CoC terms, equity continuation mechanics (PSUs prorated/earned), and extended option exercise if non‑compete enforced .
- Change in control window for double‑trigger spans from six months pre‑announcement/definitive agreement through 24 months post‑close for the CEO .
Investment Implications
- Pay‑for‑performance alignment is strong: heavy weighting to PSUs with explicit aTSR/rTSR metrics and annually calibrated cash bonus tied to corporate factors; governance guardrails (no gross‑ups, clawback, no hedging/pledging) reduce risk of shareholder‑unfriendly outcomes .
- Retention risk is moderate near‑term given 2024 exec departures and 2025 restructuring; however, CEO protections (18–24 months severance/benefits, prorated and continued equity mechanics) and ownership stake (1.1%) support continuity incentives through key milestones (e.g., apraglutide NDA) .
- Potential selling pressure around vest dates exists (large RSU/PSU settlements), but policy limits hedging/pledging and ownership guidelines enforce long‑term alignment; monitor Form 4s around quarterly vesting cadences and approaching option expirations .
- Strategy execution is the main driver: maintaining LINZESS cash flows under IRA headwinds (Medicare price negotiation effective 2027 for LINZESS) while advancing apraglutide are key; CEO’s GI commercialization background is a positive, but pricing, payer and pipeline risks remain elevated in 2025–2027 .