Denise Scots-Knight
About Denise Scots-Knight
Dr. Denise Scots-Knight is Chief Executive Officer (CEO) of Mereo BioPharma and a director, age 65, serving as CEO since July 2015 and on the Board since the company’s formation; she holds a B.Sc. (Hons.) and Ph.D. from Birmingham University and was a Fulbright scholar at the University of California, Berkeley . She also currently serves on the Board of Elanco Animal Health (NYSE: ELAN) . Pay-versus-performance disclosures show two-year positive TSR progression and increasing CAP, with net losses reflecting a pre-commercial biotech investment profile .
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Value of $100 investment (TSR) ($) | 308.00 | 466.67 |
| Net Loss ($000s) | 29,466 | 43,253 |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Phase4 Partners Ltd. | Managing Partner | 2010–2015 | Global life sciences venture investing; board/observer roles in portfolio companies |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Elanco Animal Health (NYSE: ELAN) | Director | Current | Cross-industry insights; potential network benefits for BD/commercial planning |
Board Service & Governance
- Role and tenure: CEO since July 2015; Director since formation .
- Independence: The Board is majority independent (9 of 10); Dr. Scots-Knight is not independent due to her CEO role .
- Leadership separation: Chairman is non-executive; CEO and Chair roles are separated, enhancing oversight .
- Committees: Audit and Risk; Remuneration; Nomination and Corporate Governance; and R&D Committees are populated by independent directors; Dr. Scots-Knight is not listed as a member of these committees .
- Board activity: In 2024 there were 5 Board meetings; all directors attended at least 75% of Board and committee meetings .
- Director compensation: Dr. Scots-Knight received no compensation for Board service (CEO pay disclosed separately) .
Dual-role implications: Separation of Chair and CEO mitigates concentration of power; independence of committees and clawback/hedging prohibitions further support governance integrity .
Fixed Compensation
| Component | FY 2023 ($) | FY 2024 ($) | Notes |
|---|---|---|---|
| Base Salary | 565,107 | 581,865 | 4.5% increase YoY (GBP-based policy) |
| Target Bonus (% of Base) | 60% | 60% | CEO bonus calibrated to company-wide objectives |
| Actual Bonus Paid | 254,298 | 290,205 | 50% of base achieved in 2024 |
| All Other Compensation | 71,157 | 78,877 | Health/life benefits and pension contributions |
Performance Compensation
| Incentive Type | Metric(s) | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|---|
| Annual Cash Bonus (2024) | Company-wide objectives: pipeline/milestones (setrusumab, alvelestat), manufacturing/supply, financing/Nasdaq reporting, IP | Not disclosed | 60% of base; stretch 75% | Achieved 50% of base | $290,205 | Cash (paid following approval) |
| Stock Options (Jan 25, 2024 grant) | Time-based only; no performance conditions | N/A | 850,000 ADS options @ $3.36 | Granted | Grant-date FV $2,212,164 | 25% on 1/25/2025; remainder monthly over 3 years |
Outstanding equity awards (selected CEO grants and terms):
| Grant/Tranche | Exercisable (#) | Unexercisable (#) | Exercise Price ($) | Expiration | Vesting Schedule |
|---|---|---|---|---|---|
| Legacy option | 308,949 | — | 8.63 | 09/25/2025 | Historical vesting complete |
| 05/20/2029 | 87,500 | — | 5.40 | 05/20/2029 | Historical vesting complete |
| 07/23/2029 | 87,500 | — | 3.00 | 07/23/2029 | Historical vesting complete |
| 02/20/2030 | 175,000 | — | 1.84 | 02/20/2030 | Historical vesting complete |
| 02/01/2031 | 498,333 | 21,667 | 2.72 | 02/01/2031 | 25% on 2/1/2022; remainder monthly over 3 years |
| 01/14/2032 | 802,083 | 297,917 | 1.40 | 01/14/2032 | 25% on 1/14/2023; remainder monthly over 3 years |
| 01/25/2033 | 551,041 | 598,959 | 1.01 | 01/25/2033 | 25% on 1/25/2024; remainder monthly over 3 years |
| 01/25/2034 | — | 850,000 | 3.36 | 01/25/2034 | 25% on 1/25/2025; remainder monthly over 3 years |
Compensation program governance:
- Independent consultant: Compensia engaged since May 2021; US peer alignment despite UK domicile .
- Clawback: SEC/Nasdaq 10D-1 compliant policy; recovery of erroneously received incentive comp over prior 3 years .
- Hedging/pledging: Prohibited for officers/directors/employees under Insider Trading Policy .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 19,293,514 ordinary shares |
| Ownership % of Shares Outstanding | 2.4% (base: 795,001,444 ordinary shares) |
| Components (footnote) | Includes 808,921 ADSs; 4 ordinary shares; and 3,049,781 ADSs underlying share awards exercisable within 60 days of April 1, 2025 |
| Options — Exercisable vs Unexercisable | See table above for per-grant breakdown |
| Pledging/Hedging | Prohibited by company policy |
| Director Stock Compensation | No Board compensation to Dr. Scots-Knight; CEO compensation disclosed separately |
Employment Terms
| Term | Provision |
|---|---|
| Employment Agreement | July 29, 2015; amended Sept 3, 2021 |
| Notice Period | 12 months; company may pay salary in lieu of notice; immediate termination for cause |
| Bonus Eligibility | Annual discretionary performance-based bonus per plan |
| Pension/Benefits | Company contributes up to 10% of base salary to SIPP (with 4%+ employee contribution) or pays cash in lieu; health, life, disability benefits |
| Restrictive Covenants | Non-compete 6 months post-termination; non-solicit employees 6 months; non-solicit customers 9 months |
| Change-of-Control Economics | Accelerated vesting of options; cash severance equal to 18 months’ base salary + target annual bonus upon covered termination during the period commencing at change in control and ending 12 months after (double-trigger) |
| Clawback | Mandatory recovery of incentive comp per SEC/Nasdaq standards |
Related Party & Governance Context
- Cooperation Agreement with Rubric Capital (largest shareholder) dated Oct 28, 2022; added four directors and requires at least one Rubric nominee on each Board committee; standstill limiting Rubric beneficial ownership to ≤20%; extended through conclusion of 2025 AGM .
- Directors’ and Officers’ insurance and indemnities provided per UK Companies Act .
Investment Implications
- Pay-for-performance: CEO target bonus tied solely to company-wide milestones; 2024 payout at 50% indicates disciplined calibration to operational achievements (pipeline, manufacturing, financing/exchange compliance) . Equity compensation is heavily option-based with four-year vesting, aligning incentives with long-term TSR but without explicit financial metric PSUs/TSR hurdles, which is common in pre-commercial biotech .
- Retention and overhang: Significant unvested options across 2022–2024 grants and a new 2024 grant (850,000 options) create retention hooks; near-term expiry of legacy options in 2025 presents tactical exercise decisions but not necessarily selling pressure absent Form 4 activity . Prohibitions on hedging/pledging and a clawback framework reduce alignment risk .
- Change-of-control protection: Double-trigger severance (18 months’ salary + target bonus) and accelerated vesting provide management continuity during strategic transactions; investors should factor potential dilution/option acceleration in M&A scenarios .
- Governance quality: Separation of Chair/CEO, independent committees, and robust attendance mitigate dual-role concerns; CEO receives no director pay, avoiding overlapping compensation . The Rubric cooperation agreement and committee representation shape governance dynamics and may influence strategic direction while maintaining standstill provisions .
- Performance profile: TSR improved year over year; net losses consistent with the stage of development; compensation actually paid (CAP) tracks equity valuations, underscoring sensitivity to data/milestone readouts and financing conditions .