James Karrels
MACROGENICSAbout James Karrels
James Karrels is Senior Vice President, Chief Financial Officer and Corporate Secretary of MacroGenics, Inc., a role he has held since joining the company in May 2008. He is 58 years old and holds an MBA from Stanford University and a B.B.A. from the University of Notre Dame; prior roles include Executive Director of Finance at Jazz Pharmaceuticals and Director in Merrill Lynch’s Global Healthcare Investment Banking group, reflecting deep capital markets and life-sciences finance expertise . Company-level performance under his tenure shows volatile TSR and operating results typical of clinical-stage biopharma: revenues rose sharply in FY2024 vs FY2023 while EBITDA loss narrowed; TSR fell in 2024 after a strong 2023 rebound . His compensation program ties 80% of his annual incentive to corporate objectives (pipeline, BD, and corporate stewardship) and 20% to individual goals, with significant equity in time-vested options and RSUs to promote retention and alignment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Jazz Pharmaceuticals | Executive Director of Finance | — | Led FP&A and Investor Relations during a commercial-stage growth phase |
| Merrill Lynch | Director, Global Healthcare Investment Banking | — | Executed financing and strategic transactions across life sciences |
External Roles
No public company directorships or external roles disclosed for Mr. Karrels .
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $471,106 | $491,077 |
| Target Bonus (%) | 40% | 40% |
| Target Bonus ($) | $188,000 | $197,600 |
| Actual Bonus Paid ($) | $209,000 | $158,554 |
Performance Compensation
Annual Incentive Plan – Structure and 2024 Outcomes
| Component | Weighting | Target | Actual (2024) | Payout Basis | Notes |
|---|---|---|---|---|---|
| Corporate Objectives (Clinical pipeline) | 50% of corporate | Milestones per plan | Partially met | Contributes to 77.3% corporate achievement | Focus on advancing ongoing trials |
| Corporate Objectives (Pre-Clinical) | 20% of corporate | Molecule ID & testing | Partially met | Contributes to 77.3% corporate achievement | Pre-clinical progression |
| Corporate Objectives (Business Development) | 15% of corporate | Collaboration thresholds | Partially met | Contributes to 77.3% corporate achievement | Near-term consideration targets |
| Corporate Objectives (Corporate) | 15% of corporate | Cash stewardship, compliance, engagement | Partially met | Contributes to 77.3% corporate achievement | Budget vs plan and HCM metrics |
| Corporate Achievement (Aggregate) | 80% of NEO bonus | 100% | 77.3% | Drives corporate portion of bonus | Set by HCMC discretion |
| Individual Performance | 20% of NEO bonus | 100% (cap 150%) | Included | Combined achievement = 80% | CFO’s combined result for 2024 |
| Resulting Cash Bonus ($) | — | — | $158,554 | Paid Q1 2025 | CFO payout for 2024 performance |
2024 Equity Awards (Time-Vested)
| Award Type | Grant Date | Quantity | Grant-Date Fair Value ($) | Vesting | Exercise Price / Expiration |
|---|---|---|---|---|---|
| RSUs | 02/08/2024 | 30,000 | $549,000 (total stock awards for 2024) | Annually over 3 years | N/A |
| Stock Options | 02/08/2024 | 80,000 | $1,153,112 (total option awards for 2024) | 12.5% at 6 months; balance in 14 quarterly installments | $18.30 / 02/08/2034 |
Equity mix favors time-vested options and RSUs; MacroGenics did not disclose PSUs for NEOs in 2024. Option exercise prices are set at grant-date fair market value; RSUs settle in stock upon vesting .
Equity Ownership & Alignment
Beneficial Ownership (as of March 24, 2025)
| Holder | Shares Owned | Shares Issuable within 60 Days | Total Beneficial | % Outstanding |
|---|---|---|---|---|
| James Karrels | 186,801 | 680,000 | 866,801 | 1.4% |
Outstanding Equity Awards (as of December 31, 2024)
| Grant Date | Options Exercisable (#) | Options Unexercisable (#) | Exercise Price ($) | Expiration | Unvested RSUs (#) | RSU Market Value ($) |
|---|---|---|---|---|---|---|
| 12/18/2015 | 45,000 | — | 31.43 | 12/18/2025 | — | — |
| 02/15/2017 | 55,000 | — | 20.53 | 02/15/2027 | — | — |
| 03/02/2018 | 70,000 | — | 28.94 | 03/02/2028 | — | — |
| 02/21/2019 | 85,000 | — | 21.88 | 02/21/2029 | — | — |
| 02/20/2020 | 90,000 | — | 11.50 | 02/20/2030 | — | — |
| 02/22/2021 | 89,062 | 5,938 | 19.18 | 02/22/2031 | — | — |
| 02/22/2022 | 96,250 | 43,750 | 10.15 | 02/22/2032 | — | — |
| 02/15/2023 | 78,750 | 101,250 | 4.82 | 02/15/2033 | 29,997 | $97,490 |
| 02/08/2024 | 15,000 | 65,000 | 18.30 | 02/08/2034 | 30,000 | $97,500 |
- Ownership guidelines: Section 16 officers must own stock equal to at least 1x base salary within five years; board members 3x annual retainer; CEO 3x base salary .
- Anti-hedging/anti-pledging: Pledging and hedging transactions (e.g., collars, swaps, margin accounts) are prohibited for all directors, officers, and employees .
- Clawback: Incentive compensation is subject to recoupment per Nasdaq/SEC clawback rules (adopted Nov 2023); applies to current/former executive officers over a three-year lookback in the event of restatement . Equity plan awards are also subject to recoupment under company policy .
Employment Terms
| Provision | Terms |
|---|---|
| Agreement | Employment agreement dated Oct 2013; amended Jan 1, 2025 |
| Non-compete | 18 months post-termination or during severance period |
| Non-solicit | 2 years (customers/employees; hiring prohibition) |
| Confidentiality/IP | Standard confidentiality and invention assignment obligations |
| Severance (no CoC) | 12 months base salary; up to 12 months health benefit continuation; 50% acceleration of unvested equity |
| Severance (within 2 years post-CoC; double trigger) | 12 months base + target bonus; up to 12 months health benefit continuation; 100% acceleration of unvested equity |
Potential Payments (as of Dec 31, 2024)
| Scenario | Cash Payment ($) | Health Benefits ($) | Accelerated Unvested Equity ($) | Total ($) |
|---|---|---|---|---|
| Termination without cause (no CoC) | $494,000 | — | $97,495 | $591,495 |
| Termination within 2 years post-CoC | $691,600 | — | $194,990 | $886,590 |
CoC accelerations valued using $3.25 closing price on 12/31/2024 as disclosed; amounts reflect options and RSUs subject to acceleration net of strike prices where applicable .
Performance & Track Record
Company Performance (MacroGenics)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($) | 151,941,000 [*] | 58,749,000 [*] | 149,962,000 [*] |
| EBITDA ($) | -109,553,000* | -158,599,000* | -103,038,000* |
Values retrieved from S&P Global.
[*] Revenue citations are included in the data service output; EBITDA values lack document citations and are marked with an asterisk.
| Pay vs Performance Indicator | 2022 | 2023 | 2024 |
|---|---|---|---|
| TSR – $100 initial investment (value) | $29.35 | $42.08 | $14.22 |
| Net Income (Loss) ($000s) | (119,758) | (9,058) | (66,966) |
- Say-on-Pay support: 95.7% approval at 2024 annual meeting; committee retained program features for 2024 in response to shareholder feedback .
- 2024 corporate performance achievement: 77.3% vs plan across clinical, pre-clinical, BD and corporate objectives; CFO’s combined achievement used for bonus payout was 80% .
Compensation Structure Analysis
- Mix shift and risk: 2024 awards comprised time-vested options and RSUs; absence of PSUs reduces direct linkage to external performance metrics (e.g., TSR, revenue milestones) but preserves retention and alignment through vesting and option strike value realization .
- Target setting and discretion: Annual cash bonus split (80% corporate/20% individual for NEOs) with committee discretion; 2024 outcomes reflected partial achievement across categories, producing sub-target payouts for CFO .
- Governance protections: No option repricing without shareholder approval; no single-trigger vesting upon change in control; dividends prohibited on unvested awards; clawback and insider trading controls (pre-clearance, blackout periods) are in place .
Related Party Transactions and Risk Indicators
- Related party transactions: None >$120,000 since Jan 1, 2023, other than standard compensation arrangements .
- Hedging/pledging: Prohibited, reducing misalignment risk .
- Litigation/governance: No disclosed personal legal proceedings; CFO provides SOX certifications and serves as primary investor contact, indicating control environment engagement .
Compensation Committee Analysis
- Committee composition (2025): William Heiden (Chair), Meenu Chhabra Karson, Jay Siegel, M.D., Federica O’Brien; independent per Nasdaq/SEC rules; uses independent consultants (Compensia; Alpine Rewards) and peer benchmarking to set pay .
Investment Implications
- Alignment and retention: Karrels’ 1.4% beneficial ownership and significant unvested equity indicate strong retention incentives; anti-hedging/pledging and stock ownership guidelines support alignment with shareholders .
- Selling pressure risk: Many outstanding options carry exercise prices well above $10 (e.g., 2015–2021 grants) vs the $3.25 year-end 2024 share price used in severance valuation, suggesting limited in-the-money optionality and near-term selling pressure from option exercises unless the stock appreciates materially; RSUs vest over time and may create predictable supply near vest dates .
- Change-of-control economics: Double-trigger structure with 100% acceleration and 12 months salary + target bonus may incentivize retention through potential strategic events; investors should monitor M&A signals and Board’s CEO search process for potential leadership transitions .
- Performance linkage: Annual bonus tied chiefly to pipeline and BD execution (77.3% corporate achievement in 2024) underscores that value creation hinges on clinical milestones and partnering; equity awards are time-based, so incremental performance sensitivity remains primarily through future option moneyness rather than PSU metric attainment .
Overall: Governance safeguards are robust; compensation emphasizes retention and long-term equity participation over strict performance-conditioned equity. Near-term trading signals are more likely driven by RSU vesting cadence than option exercises given strike levels. Sustainable upside depends on clinical/BD execution reflected in corporate objectives and future TSR recovery .