Walter Klemp

About Walter Klemp

Walter V. Klemp is co-founder, Chairman, President and Chief Executive Officer of Moleculin Biotech (MBRX), serving as CEO since July 2015; he was 65 years old as of August 26, 2024 . Prior to MBRX, he was CEO of Soliton (2011–2018) and Executive Chairman (2018–2021) until its sale to AbbVie, CEO of Zeno Corporation (2004–2011), and CEO/Chairman of Drypers (1987–2000) . Recent pay-versus-performance disclosure shows Moleculin’s TSR proxy index value declined from 38.89 (2021) to 17.95 (2023), while net loss was $29.8M in 2023, contextualizing a challenging value-creation backdrop during which compensation “actually paid” to the CEO tracked lower than Summary Compensation totals .

Past Roles

External Roles

Fixed Compensation

Notes:

• 2023 target bonus remained 66% of salary; bonuses are based on corporate and individual goals, with “stretch” up to 120% of target . Salaries were flat from 2022 to 2023 .

Performance Compensation

• Annual bonus framework: Target 66% of salary; payout based on corporate goals (clinical progress, internal controls, funding) and individual goals. For the 2022/2023 compensation year, the committee approved payout at 78% of potential for Mr. Klemp . For 2023/2024, goals included clinical progress, business development, systems improvements, and balance sheet strength .

Equity awards (2023 grants and outstanding as of Dec 31, 2023):

Additional context: An earlier 8-K disclosed PSUs on Dec 29, 2023 of 653,846 units that vest on the same performance conditions; later proxy reflects adjusted unit amounts (likely share adjustments) at 43,590 PSUs .

Equity Ownership & Alignment

Beneficial ownership snapshots (shares and % of class):

Outstanding awards (CEO) at 12/31/2023 (vested vs unvested detail):

Policies:

• Anti-hedging: company prohibits hedging transactions in company stock absent approval .
• Pledging: no pledging of shares by Mr. Klemp is disclosed in the proxy’s ownership notes; no pledging policy language identified beyond anti-hedging .

Employment Terms

Key terms of Mr. Klemp’s Amended & Restated Employment Agreement dated Jan 4, 2024:

• Base salary: $565,000; target annual bonus: 66% of salary; annual option grant per plan and committee discretion; 1-year term with automatic 1-year renewals .
• Severance: if terminated without cause or for good reason, 12 months base salary plus 75% of target annual bonus, paid over 12 months, subject to release; COBRA premium support up to 12 months .
• Change in Control protection: if such a termination occurs within 6 months before or 12 months after a Change in Control, additional 12 months base salary and additional 25% of target annual bonus (total 24 months base and full 100% of target bonus aggregate, split 75% + 25%) .
• Non-compete and non-solicit: 12 months post-termination .
• Clawback: subject to company recoupment policy .
• Note on equity upon Change in Control: under the 2024 Stock Plan, the committee has discretion to accelerate vesting, deem performance goals satisfied, redeem, or cash out awards in connection with a Change in Control (not automatic single-trigger acceleration) .

Board Governance

• Dual role: Mr. Klemp serves as both CEO and Chairman; the board has no policy mandating separation of roles and maintains a Lead Independent Director (John Climaco) who leads executive sessions, acts as liaison, and approves agendas .
• Independence: all directors except Mr. Klemp are independent under Nasdaq rules .
• Committees (independent members only): Audit (Chair Robert George), Compensation (Chair Michael Cannon), Nominating & Corporate Governance (Chair Robert George) .
• Board/committee activity and attendance: 8 board meetings and 17 committee meetings in 2023; each incumbent director attended >75% of applicable meetings .
• Director compensation: Mr. Klemp receives no additional pay for board service; non-employee director cash retainers and small option grants are disclosed separately .

Insider Activity and Vesting/Selling Pressure

• Insider buying: Mr. Klemp purchased shares on Dec 26, 2023 at $0.69/share (pre subsequent capital actions), signaling alignment at that time .
• 2024 Form 4 activity consistent with equity vesting/tax events: entries in June–July 2024 include option exercises and “F” (sell-to-cover taxes) transactions for Mr. Klemp (e.g., June 21 and July 2, 2024) .
• 2025: Additional Form 4s were filed (e.g., Nov 12, 2025), indicating ongoing equity activity as the Phase 3 program advanced .

Performance & Track Record

Pay-versus-performance context and operating milestones:

• TSR and Net Loss (SEC “Pay vs Performance”):

• Program achievements (2025):
  • Dosed first EU patient in pivotal MIRACLE Phase 3 AML trial .
  • Reported 60% of first 45 subjects in MIRACLE enrolled, with recruitment acceleration updates .
  • Expanded IP with Australian patent allowance for Annamycin; progressed investigator-initiated studies .

Compensation Committee Analysis

• Independent oversight: Compensation Committee comprised solely of independent directors; retains Pay Governance LLC as independent consultant since April 2018 for peer benchmarking and program design .
• Clawback: Dodd-Frank restatement recoupment policy adopted effective Oct 2, 2023 .
• Equity plan safeguards: 2024 Stock Plan prohibits repricing without shareholder approval; sets director pay cap; no evergreen; 10-year term .

Say-on-Pay & Shareholder Feedback

• 2024 Annual Meeting outcomes (Oct 24, 2024):
  • Say-on-Pay (advisory) passed: For 538,730; Against 246,066; Abstain 7,761; Broker non-votes 752,486 .
  • 2024 Stock Plan approved (For 559,463; Against 230,943; Abstain 2,151; Broker non-votes 752,486) .
  • Nasdaq warrant proposal approved (enabling exercise/repricing per August 2024 financing) .

Director Compensation (for completeness)

• Non-employee director program: $40,000 annual cash retainer; committee chair/membership stipends; Lead Independent Director stipend; small option grants at appointment/annual meeting. Mr. Klemp did not receive additional director compensation .

Related Party Transactions

• Disclosed related-party items involve another co-founder (Dr. Priebe) and WPD/Animal Lifesciences agreements; no related-party transactions involving Mr. Klemp were disclosed in the proxy .

Investment Implications

• Alignment: Meaningful insider ownership with increased holdings by Aug 2025 (819,446 shares, 2.2%), use of performance-conditioned PSUs tied to value-creating events (NDA, ≥$150M licensing, or Change in Control), anti-hedging policy, and an adopted clawback support pay-for-performance alignment .
• Retention/Cost of Change: Severance equals 12 months base + 75% of target bonus, with CoC-related termination raising total to 24 months base + 100% target bonus equivalent (75% + 25%), a moderate-to-high package for a micro-cap biotech that could influence M&A dynamics; equity acceleration under plan is discretionary (not automatic) .
• Governance risk: CEO/Chair dual role is mitigated by a Lead Independent Director and fully independent committees, but remains a governance consideration for some investors .
• Trading signals: Historical insider purchase (Dec 2023) and subsequent Form 4s tied to vesting/withholding suggest ordinary course activity rather than persistent opportunistic selling; continued monitoring is warranted into key Phase 3 milestones .

Appendix: Detailed Bonus Metrics (Narrative)