Mahesh Patel
LipocineAbout Mahesh Patel
Mahesh V. Patel, Ph.D., age 68, is President & CEO of Lipocine and has served on the Board since 1997. He holds a B.Pharm (Karnataka University), M.S. in Physical Pharmacy (University of Cincinnati), and Ph.D. in Pharmaceutics (University of Utah). Lipocine’s pay-versus-performance disclosure shows cumulative TSR index values of $28.96 in 2024 vs $16.56 in 2023 and $40.14 in 2022, with net income of $0.8 million in 2024, -$16.4 million in 2023, and -$10.8 million in 2022, framing recent shareholder returns and profitability during his tenure . Dr. Patel previously led drug delivery R&D at Pharmacia & Upjohn before co-founding Lipocine in 1997 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Lipocine Inc. | President & CEO; Director | 1997–present | Founder-CEO guiding drug delivery pipeline and clinical development |
| Pharmacia & Upjohn | Led drug delivery R&D | Pre-1997 | Built drug delivery capabilities; foundation for Lipocine technology |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Spriaso LLC | Majority owner with affiliates (assignment/license counterparty) | 2013–present | Cough/cold IP assigned from Lipocine; Lipocine retains 20% royalty up to $10M and license-back outside cough/cold |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 525,000 | 565,000 |
| All Other Compensation ($) | 18,759 (life insurance + 401k match) | 19,418 (life insurance + 401k match) |
| Employment Agreement Base (current board-approved) ($/yr) | 565,000 (as of 2024) | 584,775 (updated by Board) |
Performance Compensation
Annual Cash Incentive
| Year | Performance Metrics | Actual Bonus Paid ($) | Notes |
|---|---|---|---|
| 2023 | Committee discretion for performance criteria | 218,768 | Paid under cash bonus plan |
| 2024 | Corporate goals; Committee discretion | 84,750 | Accrued at 12/31/2024; paid 3/31/2025 |
Equity Awards – RSUs (2024 Grants)
| Grant Date | Type | Units | Fair Value / Share | Vesting Terms | Status/Trigger |
|---|---|---|---|---|---|
| 03/08/2024 | Time-based RSU | 4,894 | $3.61 | 33.3% at 1-year; 16.7% semi-annually until fully vested | Time-based |
| 03/08/2024 | Performance RSU (LPCN 1154 NDA) | 4,893 | $3.61 | Vests upon FDA approval of NDA submission for LPCN 1154 | Event-based |
| 03/08/2024 | Performance RSU (Corporate activities) | 4,893 | $3.61 | Vests upon achievement of specified corporate business activities | Event-based |
Equity Awards – Options (Outstanding as of 12/31/2024)
| Grant Date | Exercisable | Unexercisable | Strike ($) | Expiration |
|---|---|---|---|---|
| 01/05/2016 | 8,235 | – | 219.64 | 01/05/2026 |
| 12/07/2016 | 8,235 | – | 61.37 | 12/07/2026 |
| 12/06/2017 | 8,823 | – | 59.84 | 12/06/2027 |
| 12/04/2018 | 8,823 | – | 24.82 | 12/04/2028 |
| 01/28/2020 | 17,647 | – | 7.79 | 01/28/2030 |
| 12/15/2020 | 5,882 | – | 23.29 | 02/15/2030 |
| 01/04/2021 | 16,176 | – | 24.31 | 01/04/2031 |
| 12/07/2021 | 7,352 | – | 19.04 | 12/07/2031 |
| 01/03/2022 | 16,441 | 470 | 18.53 | 01/03/2032 |
| 12/22/2022 | 4,411 | 2,206 | 6.98 | 12/22/2032 |
| 01/03/2023 | 11,274 | 6,373 | 7.03 | 01/03/2033 |
| 12/23/2024 | – | 10,320 | 4.80 | 12/23/2034 |
Option vesting standard: 1/3 cliff at year 1; remaining 2/3 monthly over 24 months; 10-year term .
Equity Ownership & Alignment
| Category | Amount | Detail |
|---|---|---|
| Total Beneficial Ownership (Shares) | 226,187 | 109,048 owned directly/by spouse; 117,139 via options exercisable within 60 days |
| Ownership % of Outstanding | 4.14% | Based on 5,350,356 shares outstanding at 3/31/2025 |
| Vested vs Unvested (near-term) | 117,139 options exercisable within 60 days ; RSUs time/performance unvested (see above) | Event/Time-based RSUs pending |
| Hedging/Pledging | Not disclosed in proxy; Insider Trading Policy in place | No stock ownership guidelines disclosed |
| Clawback Policy | Awards subject to clawback/recoupment | Plan-level clawback applies |
Employment Terms
| Term | Key Provisions |
|---|---|
| Agreement Date | January 7, 2014 |
| Eligibility | Participates in company cash bonus plan |
| Termination – Without Cause / Good Reason | Severance up to 104 weeks base salary; full vesting of all outstanding equity; option exercise extended at least 3 years |
| Base Salary (Board-adjusted) | $584,775 per year (current); previously $565,000 |
| Change-of-Control (Plan) | Committee/Board may accelerate vesting; cash-out at option/SAR value (≥ Black-Scholes); assume/substitute awards; ability to terminate awards with cash bonus for Black-Scholes excess; repricing permitted for underwater options/SARs |
Board Governance
- Board service: Director since 1997; currently serves as executive director; Board separates CEO and Chairman roles; Lead Independent Director and Chairman is Dr. Spyros Papapetropoulos .
- Committee structure: Audit Committee (Fink—Chair, Ono, Jene), 5 meetings in 2024 ; Compensation Committee (Ono—Chair, Fink, Papapetropoulos), 2 meetings related to compensation in 2024 .
- Attendance: Board held 6 meetings in 2024; each incumbent director attended >75% .
- Independence: Majority independent board; CEO is not independent; lead independent structure provides balance .
Director Compensation Context
- Non-employee director retainers: $55,000 annual; +$7,500 Audit; +$7,500 Compensation; Chairs: Audit $16,500; Comp $12,500; Lead Independent Director $30,000; option awards 1,764 shares per director (2024 awards) .
- For 2024, cash and option award totals per director disclosed (e.g., Lead Independent Director total $102,223) .
Compensation Structure Analysis
- Mix shift: 2024 CEO cash bonus dropped to $84,750 from $218,768 in 2023 while RSUs were introduced with both time-based and performance-based tranches, increasing event-driven equity linkage .
- Performance metrics: RSUs tied to FDA NDA approval (LPCN 1154) and specified corporate activities; cash bonuses awarded under committee discretion for achieving performance criteria, but explicit weighting/targets not disclosed .
- Repricing risk: Equity plan explicitly permits repricing of underwater options/SARs—shareholder-unfriendly red flag if utilized .
- Pay vs performance: CAP trajectory and TSR indices show improved CAP alignment with modest TSR in 2024 and positive net income, after losses in 2023 and 2022 .
Say-On-Pay & Shareholder Feedback
| Item | 2025 Annual Meeting Vote Outcome |
|---|---|
| Advisory vote on executive compensation | For: 926,497; Against: 121,032; Abstain: 38,038; Broker non-votes: 1,826,818 |
Related Party Transactions
- Spriaso LLC assignment/license (2013): Lipocine assigned cough/cold IP to Spriaso (majority-owned by Patel, Higuchi, and affiliates); Lipocine retains 20% royalty on net proceeds up to $10 million and exclusive license-back outside cough/cold; services agreement expired 2021; first NDA in 2014 used FDA small business first-time user fee waiver as an affiliated entity—ongoing interlocks warrant monitoring .
Risk Indicators & Red Flags
- Section 16(a) reporting: Late Form 4 by Dr. Patel for a 12/23/2024 transaction (filed 12/30/2024; amended 1/2/2025) .
- Option/SAR repricing permitted under plan .
- Dual role: CEO serves on board; however, separate Chairman and Lead Independent Director mitigates but does not eliminate independence concerns .
- Ownership guidelines/pledging: No explicit stock ownership guidelines or pledging prohibitions disclosed; Insider Trading Policy exists .
Performance & Track Record (Selected Company Metrics)
| Measure | 2022 | 2023 | 2024 |
|---|---|---|---|
| Cumulative TSR index (value of $100) ($) | 40.14 | 16.56 | 28.96 |
| Net Income (USD millions) | -10.8 | -16.4 | 0.8 |
Investment Implications
- Alignment and event-driven upside: 2024 RSU structure links a meaningful portion of CEO equity to FDA NDA approval for LPCN 1154 and corporate milestones, aligning incentives with binary clinical/regulatory catalysts that could drive stock performance and potential insider selling pressure upon vesting .
- Retention protection: CEO agreement provides robust severance (104 weeks) and full equity vesting with extended option exercise upon qualifying termination—reduces personal downside and suggests low near-term retention risk .
- Governance balance but watch repricing: Separation of CEO and Chair with Lead Independent Director is positive, but plan-level repricing authority is a governance risk if utilized, potentially diluting shareholders in downturns .
- Shareholder support: 2025 say-on-pay received favorable votes, indicating current investor acceptance of pay design; however, transparency gaps around quantitative bonus metrics and lack of ownership guidelines merit ongoing engagement .