Charles Sermon
About Charles Sermon
Charles Sermon, age 55, serves as General Counsel and Business Development and has been Mereo’s General Counsel since July 2015; he trained and qualified as a lawyer with Freshfields in London after completing the Law Society’s Final Examination and holds an LL.B. (Hons.) from Hull University . During his tenure, company pay-versus-performance disclosures show total shareholder return value of $466.67 on a fixed $100 investment for 2024 versus $308.00 in 2023, with net losses of $43.3 million in 2024 and $29.5 million in 2023, contextualizing performance backdrop for incentive outcomes . He also serves as Company Secretary (shareholder communications routed to him), reinforcing governance responsibilities .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Mereo BioPharma Group plc | General Counsel; Business Development; Company Secretary | 2015–present | Senior legal and BD leadership; board/AGM governance as Company Secretary |
| Phase4 | Partner | 2010–2015 | Life sciences venture advisory; business development experience |
| Freshfields (London) | Lawyer trainee/qualified | Prior to Phase4 | Top-tier training in corporate/legal practice |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Rainbow Trust Children’s Charity | Director, Board of Trustees | Not disclosed | External nonprofit governance; community profile |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Annual Base Salary ($) | 415,651 | 428,056 |
| Target Bonus Rate (% of base) | 50% | 50% |
| Stretch Bonus Rate (% of base) | 63% | 63% |
| Bonus Achievement (% of base) | 39% | 43% |
| Actual Bonus Paid ($) | 162,104 | 182,994 |
| All Other Compensation ($) | 48,031 | 57,819 |
Performance Compensation
Incentive Design and Outcomes (Cash Bonus)
| Metric | Weighting | Target | Actual | Payout | Vesting/Timing |
|---|---|---|---|---|---|
| Company-wide objectives: pipeline milestones (setrusumab SATURN, Orbit 14-month data), alvelestat Phase 3 protocol readiness; EU orphan designation; U.S. domestic reporting transition; $50M financing; manufacturing supply chain and Ultragenyx agreement; IP milestones | Not disclosed | Not disclosed | Achieved across categories; CEO 50% of base; NEOs 43% of base (Sermon) | 43% of base for Sermon (cash paid in January following year) | Annual, paid post Remuneration Committee approval |
Equity Awards (Grant-Date Fair Value)
| Award Type | 2023 ($) | 2024 ($) | Notes |
|---|---|---|---|
| Stock Options (Option Awards) | 362,923 | 637,624 | Options granted annually; 4-year vesting structure favored for pre-commercial biotech |
| Stock Awards (RSUs/PSUs) | 99,540 | — | 2023 PSUs based on escalating ADS price thresholds over two-year period |
PSU Structure (2023 Awards)
| Metric | Weighting | Target | Actual | Eligible Units | Vesting Rule |
|---|---|---|---|---|---|
| ADS price thresholds (4 escalating hurdles over 2 years) | Not disclosed | Threshold prices (undisclosed) | Not disclosed | 164,000 PSUs eligible; $378,840 MV at 12/31/2023 | Vests only if threshold prices met; could vest at zero if minimum not met |
Equity Ownership & Alignment
| Metric | As of Mar 31, 2024 | As of Apr 1, 2025 |
|---|---|---|
| Beneficial Ownership (shares) | 4,212,374 | 8,987,804 |
| Ownership (% of outstanding) | 0.60% (on 701,349,434 shares) | 1.1% (on 795,001,444 shares) |
| Shares pledged as collateral | Prohibited by policy; none disclosed |
Options Outstanding and Vesting (ADSs; each ADS=5 ordinary shares)
| Grant/Strike | Exercisable (#) | Unexercisable (#) | Exercise Price ($) | Expiration | Vesting Terms |
|---|---|---|---|---|---|
| 9/25/2015 | 154,474 | — | 8.63 | 09/25/2025 | Historical vest completed |
| 5/20/2019 | 27,500 | — | 5.40 | 05/20/2029 | Historical vest completed |
| 7/23/2019 | 27,500 | — | 3.00 | 07/23/2029 | Historical vest completed |
| 2/20/2020 | 85,000 | — | 1.84 | 02/20/2030 | 25% on 2/20/2021; remainder monthly over 3 years |
| 2/01/2021 | 143,750 | 6,250 | 2.72 | 02/01/2031 | 25% on 2/01/2022; remainder monthly over 3 years |
| 1/14/2022 | 200,520 | 74,480 | 1.40 | 01/14/2032 | 25% on 1/14/2023; remainder monthly over 3 years |
| 1/25/2023 | 191,666 | 208,334 | 1.01 | 01/25/2033 | 25% on 1/25/2024; remainder monthly over 3 years |
| 1/25/2024 | — | 245,000 | 3.36 | 01/25/2034 | 25% on 1/25/2025; remainder monthly over 3 years |
- Policy prohibits hedging and pledging; no stock ownership guideline disclosures for executives were identified .
Insider Trading Activity (Form 4s)
- Multiple Form 4 filings by Charles Sermon in 2024–2025, including June 25, 2024, September 11, 2024, and later in 2024; filings reference Rule 10b5-1(c) plan and report sales, indicating programmatic selling rather than discretionary timing .
- Third-party coverage indicates Sermon sold approximately $133,050 worth of shares alongside other executives, corroborating selling activity in 2024 .
Employment Terms
- Contract: Employment agreement dated July 29, 2015, amended September 3, 2021 .
- Pension: Company contribution equal to 10% of base salary to his Self-Invested Personal Pension Scheme if he contributes ≥4%; alternatively, cash-in-lieu equal to 10% of base salary at his request .
- Termination: Either party may terminate with ≥6 months’ notice; company may terminate immediately for cause or by paying basic salary for remaining notice period .
- Restrictive covenants: Non-compete 6 months; non-solicit employees 6 months; non-solicit customers 9 months post-termination .
- Change in control economics: Accelerated vesting of share options; severance equal to 12 months’ base salary plus target annual bonus for a covered termination occurring during the period beginning on change in control and ending 12 months thereafter (double-trigger) .
- Clawback: Company has adopted a mandatory recoupment policy per SEC Rule 10D-1/Nasdaq listing standards (three-year lookback on erroneously received incentive compensation) .
- Hedging/Pledging: Prohibited for officers, directors, and employees under Insider Trading Policy .
Performance & Track Record Context (for incentive calibration)
- 2024 Company achievements used to assess bonuses included: setrusumab SATURN real-world evidence and Orbit 14-month data comparability; alvelestat Phase 3 protocol submission and readiness; EU orphan designation; transition to U.S. domestic reporting; $50 million underwritten registered direct financing extending cash runway into 2027; Phase 3 drug product supply readiness and commercial supply chain with Ultragenyx; IP milestones .
- Company TSR value increased year-over-year (fixed $100 investment to $466.67 in 2024 vs $308.00 in 2023), alongside net losses of $43.3 million in 2024 and $29.5 million in 2023 .
Compensation Structure Analysis
- Cash vs equity mix: For 2024, Sermon’s compensation comprised salary $428,056, cash bonus $182,994, option awards $637,624, and other comp $57,819, indicating a material equity component in line with pre-commercial biotech norms .
- Shift in instruments: 2023 included PSUs with ADS price hurdles; 2024 grants emphasized options with four-year vesting; PSUs can vest at zero if thresholds unmet, increasing performance sensitivity .
- At-risk pay: Bonus outcomes tied to multi-category operational milestones; specific weightings/targets not disclosed due to competitive sensitivity .
- Recoupment and trading policy: Clawback policy and hedging/pledging prohibitions strengthen alignment and governance .
Equity Ownership & Alignment — Additional Detail
| Item | 2023 YE (ADSs unless noted) | Notes |
|---|---|---|
| Unvested Stock Awards (PSUs) | 164,000 | Based on ADS price thresholds; MV $378,840 |
| Unvested RSUs | Not disclosed | No RSUs listed outstanding for Sermon at YE 2024 |
| Options in-the-money value | Not disclosed | Exercise prices span $1.01–$8.63; ITM status depends on ADS price |
| Ownership guideline | Not disclosed | No executive ownership guideline disclosure identified |
Board Governance (relevant roles)
- Company Secretary: Sermon is designated Company Secretary, serving as contact for shareholder communications and nomination process correspondence .
- Committee oversight: Remuneration Committee sets performance measures/targets and approves incentive payouts; independent consultant Compensia supports peer group and design .
Investment Implications
- Alignment: Significant equity exposure via multi-year options and prior PSUs, with clawback and hedging/pledging bans, supports long-term alignment; lack of executive ownership guidelines is a minor gap .
- Retention and change-in-control: Six-month notice and double-trigger change-in-control severance (12 months salary + target bonus) with option acceleration provide retention stability but create potential event-driven costs; covenants (6–9 months) modestly mitigate post-departure risk .
- Selling pressure: Documented Form 4 sales in 2024 under a Rule 10b5-1 plan suggest programmatic selling; monitor future filings around major clinical/regulatory milestones to gauge incremental pressure .
- Performance sensitivity: Bonus framework ties to execution across pipeline, financing, and manufacturing milestones; 2024 payout at 43% of base indicates meaningful performance delivery, while future outcomes remain contingent on Phase 3 initiation/approval pathways and commercial readiness .
- Context: Company performance shows improved TSR metrics despite continued net losses; equity-heavy pay structure appropriately reflects pre-commercial risk profile, but sustained insider sales warrant observation for signaling and liquidity effects .
Note: Company financial metrics referenced from S&P Global via GetFinancials where no document citations are present: FY2024 EBITDA -$45.1mm*, FY2023 EBITDA -$26.6mm*; FY2023 revenues $10.0mm , FY2024 revenues not available*. Values retrieved from S&P Global.