Matthew Rabinowitz
NateraAbout Matthew Rabinowitz
Matthew Rabinowitz, Ph.D., is Natera’s co‑founder and Executive Chairman (director since 2005; Executive Chairman since January 2019). He holds B.S. in Engineering & Physics, M.S. in Electrical Engineering, and Ph.D. in Electrical Engineering from Stanford; he has authored 100+ patents/publications in signal processing, ML, bioinformatics, and high‑throughput genetic testing, with multiple industry awards. Under Natera’s leadership in 2024: total revenue grew 56.7% to $1,696.9M; product gross margin reached 60.3%; and the company delivered ~$86M positive cash flow; Natera’s five‑year TSR (2020–2024) was ~369.87% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Rosum Corporation | CEO; then CTO | CEO: 2000–2003; CTO: 2003–2007 | Led location-services technology development; executive operating experience prior to founding Natera |
| Stanford University | Consulting Professor | 2004–2012 | Academic leadership in genetics/bioengineering; contributed to technology/science foundation |
| Harvard University (Genetics Dept.) | Visiting Faculty | 2018–2019 | Engagement with leading academic genetics research |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| MyOme, Inc. | Chairman & Founder | Ongoing | Natera has a strategic collaboration; independent board committee oversees related‑party transactions |
| Various private technology companies | Board/advisory roles | Ongoing | Multiple private boards/advisory positions |
Fixed Compensation
| Year | Base Salary ($) | Notes |
|---|---|---|
| 2022 | 300,921 | Per Summary Compensation Table |
| 2023 | 401,484 | Employment agreement amended; option awards emphasized in 2023 |
| 2024 | 401,484 | Executive Chairman; salary set by agreement |
Performance Compensation
Annual Cash Incentive (2024)
| Metric | Weight | Threshold | Target | Max | Actual 2024 | Payout vs Target |
|---|---|---|---|---|---|---|
| Revenue | 55% | $1,103.47M | $1,298.2M | $1,142.93M (payout scale ref) | $1,969.6M | 120.0% |
| Product Gross Margin | 35% | 41.0% | 51.3% | 61.6% | 60.3% | 117.5% |
| Operating Cash Flow | 10% | $(126.1)M | $(100.9)M | $(75.7)M | $86.5M | 120.0% |
| Weighted Company Achievement | — | — | — | — | — | 119.1% |
| Rabinowitz Actual Bonus | — | — | $340,000 | — | — | $405,066 (119.14% of target) |
Long‑Term Equity Awards and Vesting
| Award | Grant Date | Metric | Target/Payout Curve | Key Vesting/Status |
|---|---|---|---|---|
| PSUs | 01/26/2024 | 2024–2026 cumulative revenue | Threshold 95%=50%; Target 100%=100%; Max 105%=200% | Vests upon certification; 68,976 target units granted; mirror RSUs of 68,976 time‑based |
| PSOs (market cap milestone) | 01/22/2021 (and 2022/2023 tranches) | $13B market valuation | 50% vests at achievement; 25% at 9 months; 25% at 15 months (if $13B maintained) | $13B certified on 06/28/2024; subsequent 25% vested on 03/28/2025; final 25% eligible on 09/28/2025 if $13B maintained |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 3,652,447 shares; 2.69% of outstanding as of 03/15/2025 |
| Stock Ownership Guidelines | Executives subject to guidelines; CEO 5x salary; other execs 1x; directors 5x annual cash retainer (amended Jan 2025); all NEOs/directors were compliant in 2024 |
| Hedging/Pledging | Company policy prohibits hedging and pledging; insider trading policy filed with 10-K |
| Outstanding Awards (illustrative) | 68,976 PSUs (2024 target); multiple PSOs tied to $13B milestone; numerous options/RSUs detailed in Outstanding Awards table |
| Potential Insider Selling Pressure | Large PSO/PSU vesting tranches in 2025 (Sept 28 milestone) may create timing‑related sell/withhold needs for tax; policy allows 10b5‑1 trading plans and prohibits hedging/pledging |
Employment Terms
| Term | Summary |
|---|---|
| Role & Pay Linkage | Executive Chairman; base salary equals 50% of CEO base; annual cash bonus target 85% of base; annual equity awards valued at 80% of CEO grants (same mix of performance/time-based) |
| Severance (non‑CIC) | 12 months base; 12 months COBRA; accelerated vesting of time-based awards equal to greater of 50% of unvested or 12 months forward vesting; performance-based awards (granted post‑11/01/2024) accelerated based on actual achievement × max(50%, pro‑rata incl. 12 months forward service). Pre‑11/01/2024 performance awards accelerate at 100% achievement |
| Severance (CIC Termination) | 18 months base plus bonus at 100% of target; 18 months COBRA; full vesting of time-based awards; performance-based awards accelerate at greater of actual achievement at CIC or 100% |
| CIC/Severance Value Illustration (12/31/2024) | Involuntary Termination Total $88,475,362; CIC Termination Total $55,711,014; CIC Acceleration (equity only) $43,411,978; includes COBRA and equity acceleration assumptions detailed by company |
| Clawback | All awards subject to clawback per policy and Nasdaq 10D rules; plan explicitly includes clawback |
Compensation & Incentives (multi‑year summary)
| Year | Salary ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive ($) | Total ($) |
|---|---|---|---|---|---|
| 2022 | 300,921 | — | 7,761,600 | 140,664 | 8,203,185 |
| 2023 | 401,484 | — | 8,199,982 | 366,900 | 8,968,366 |
| 2024 | 401,484 | 9,027,579 | — | 405,066 | 9,834,129 |
Performance & Track Record
- Natera’s 2024 execution: $1,696.9M revenue (+56.7% YoY), 3M tests processed, expanded coverage (Signatera/Prospera), product launches (Fetal RhD NIPT; Prospera Heart donor quantity feature), and positive cash flow ($86M) .
- Five‑year TSR ~369.87% (2020–2024), with executive pay‑versus‑performance alignment noted in proxy .
Board Governance
- Executive Chairman role separate from CEO (lead independent director in place); board intends next chair to be independent; eight of eleven directors independent (as of April 2025) .
- Committee independence: Audit, Human Capital, and Nominating/Corporate Governance & Compliance committees fully independent; Executive Chairman not a committee member .
- Attendance: All directors attended ≥75% of board/committee meetings in 2024; executive sessions of independent directors held generally at each meeting .
Director Compensation (program context)
- Non‑employee directors: annual equity retainer (2025: $355,000) and cash retainers (board member $60,000; additional retainers for lead independent and chairs); option to take retainers in RSUs; change‑in‑control full vesting of director RSUs .
Other Directorships & Interlocks; Related Parties
- MyOme transaction: collaboration/warrants; oversight via independent committee; Rabinowitz is MyOme chairman and founder; Natera beneficially holds ~16.5% (fully diluted) of MyOme; other Natera directors/executives also have stakes/roles; audit committee reviews significant related‑party transactions .
Compensation Structure Analysis (signals)
- Increased emphasis on performance equity (PSUs) with full three‑year measurement period starting 2024; payout curve up to 200% for 105% revenue achievement; aligns incentives with top‑line growth .
- Annual bonus metrics (revenue/gross margin/cash flow) yielded 119.1% payout for 2024; demonstrates tight linkage to operating outcomes .
- Clawback expanded (plan level) and hedging/pledging prohibited; stock ownership guidelines tightened in 2025 (CEO/directors 5x) .
Risk Indicators & Red Flags
- Family relationship: Chief Legal Officer Daniel Rabinowitz is Matthew’s brother (disclosed) .
- Related‑party exposure through MyOme mitigated by independent committee oversight, but remains a governance watch item .
- Large pending equity vesting tranches (PSOs/PSUs) in 2025 could create timing‑related selling pressure for tax settlement; company permits Rule 10b5‑1 plans and forbids hedging/pledging .
- Say‑on‑pay support strong (94.5% in 2024; 94.9% in 2023), indicating shareholder alignment to compensation practices .
Compensation Peer Group (benchmarking context)
- 2023 peer group included 10x Genomics; Exact Sciences; Ionis; Myriad; Neurocrine; Guardant; Ultragenyx; Repligen; Qualys; Quidel; NovoCure; etc.; Natera positioned ~64th percentile by market cap and ~58th percentile by revenue at the time .
- 2024 peer group updated (adds BioMarin, Sarepta, United Therapeutics); NEO pay philosophy targets ~75th percentile for long‑term incentive values .
Equity Plan Share Usage and Dilution (context)
- 2025 proposal increased reserve by 3.6M shares; projected overhang + available equaled ~15.7% of shares outstanding (below peer medians), with ~1.9% from vested options held by Executive Chairman .
Investment Implications
- Strong pay‑for‑performance design (three‑year PSUs, rigorous annual bonus metrics) aligns Executive Chairman’s incentives tightly with growth and margin/cash goals; combined with 5x ownership guidelines and clawback, alignment is high .
- Retention risk appears contained: significant unvested PSU/PSO over multi‑year periods and robust severance/CIC protections reduce voluntary departure incentives; however, watch for tax‑related selling pressure near vest dates (March/September 2025 for market‑cap PSOs) .
- Governance: dual role (Executive Chairman) and family relationship (CLO) are mitigated by separated CEO/chair roles, lead independent director, and independent committees; continued oversight of MyOme related‑party matters remains prudent .
- Shareholder sentiment is favorable on comp (mid‑90s% Say‑on‑Pay), suggesting limited near‑term governance overhang; continued execution on revenue/cash metrics sustains variable payout but also conditions future equity vesting .