Michael Richman

About Michael Richman

Michael Richman (age 64) is NextCure’s co‑founder, President & CEO, and a director since October 2015. He previously served as CEO of Amplimmune (sold to AstraZeneca in 2013) and EVP/COO at MacroGenics; he holds a B.S. (Genetics & Molecular Biology, UC Davis) and an M.S.B.A. (International Business, San Francisco State) . Under his leadership, the company remains a clinical‑stage biotech with negative net income; cumulative TSR for 2024 implies $100 invested at 12/31/2022 was worth $55 at 12/31/2024, and net loss was $55.7M in 2024 vs $62.7M in 2023 . The board separates Chair and CEO positions, with Dr. David Kabakoff serving as independent Chair .

Past Roles

External Roles

Fixed Compensation

Multi-year CEO pay mix shows heavy equity with variable cash tied to corporate performance.

Notes:

• Target bonus opportunity: 50% of base salary for CEO in 2022–2024 .
• Director fees: Richman receives no additional compensation for board service (inside director) .

Performance Compensation

Annual bonus metrics and outcomes (2024), and equity award design and vesting.

• Annual bonus framework (2024): Weightings — 60% NC410/LNCB74 program progress; 5% other programs; 25% business development/financial; 10% HR . Results — 100% achievement in program and HR categories, 25% in BD/financial; payout at 81.25% of target (CEO paid ~40.6% of base) .

• Equity awards (2024 grants):
  • Jan 30, 2024: Options for 305,500 shares, vest 25% at 1‑year, then monthly over 36 months .
  • Mar 28, 2024: Options for 244,400 shares, single‑year cliff vesting at 100% on first anniversary .
  • Resulting potential vesting “overhang” dates: Jan 30, 2025 (first 25% on 305,500) and Mar 28, 2025 (100% of 244,400), which can create near‑term supply if exercised/sold .

Equity Ownership & Alignment

• Beneficial ownership (as of record dates): CEO is one of NXTC’s largest individual holders, with significant option exercisability within 60 days.

• Outstanding CEO option tranches at 12/31/2024 include multiple price strata; key lines shown below (full detail in proxy):

• Hedging/Pledging: Company policy prohibits hedging or monetization transactions in company securities without advance approval; no pledging disclosures specific to Richman were noted .

• Ownership guidelines: CEO required ownership level equal to 5x base salary (with in‑the‑money option value counted as defined); five‑year compliance window from executive status or by 2024 meeting for pre‑IPO officers . Compliance status for Richman is not explicitly disclosed.

Employment Terms

• Employment agreement (July 2020): CEO is entitled to base salary and an annual bonus targeted at 50% of base salary .
• Severance: If terminated without Cause or resigns for Good Reason, cash severance of 12 months’ base salary (18 months if termination occurs within 3 months prior to or 12 months after a Change‑in‑Control), plus continued health coverage for 12 months (18 months on CIC timing), subject to customary conditions .
• Equity acceleration: Options under the 2019 Plan fully vest (i) ≥15 days prior to a Change‑in‑Control if awards are not assumed/continued/substituted; and (ii) upon termination without Cause within 12 months post‑CIC if awards were assumed/continued/substituted (double‑trigger) .
• Clawback: Nasdaq‑compliant recoupment policy for erroneously awarded incentive‑based compensation following certain restatements, applicable to awards received on/after Oct 2, 2023 .

Board Governance

• Role: CEO and director (Class III) since Oct 2015; not independent .
• Board structure: Independent Chair (Dr. Kabakoff); Richman is not on the Audit, Compensation, or Nominating & Governance committees .
• Attendance: In 2024, each director attended at least 80% of aggregate board and committee meetings .
• Say‑on‑Pay: First advisory Say‑on‑Pay proposed in 2025 (no historical vote outcomes yet) .

Director Compensation (as a Director)

• Richman receives no incremental pay for board service; director fees and option grants apply to non‑employee directors only .

Compensation Peer Group (2024 Review)

Peer group used by the Compensation Committee (with Pearl Meyer) for 2024 benchmarking included 20 small/mid‑cap biotech peers (e.g., Actinium, Adicet, Bolt, Elevation Oncology, GlycoMimetics, Immuneering, Kezar, Kronos Bio, MEI Pharma, Sensei, Xilio, etc.) .

Performance & Track Record

• Pay vs Performance disclosure:
  • Compensation Actually Paid (CAP) to CEO: $885,071 (2023); $1,138,511 (2024) .
  • Company cumulative TSR value (base $100 at 12/31/2022): $81 (2023); $55 (2024) .
  • Net income (loss): $(62.723)M (2023); $(55.654)M (2024) .

• Financial operating trend (latest 8 quarters):

Values retrieved from S&P Global.*

Risk Indicators & Red Flags (selected)

• Nasdaq minimum bid price deficiency; board is seeking authority for a reverse stock split (1:5 to 1:15) to maintain listing; closing bid was $0.42 on Apr 23, 2025 and compliance window extends to July 30, 2025 (with potential extension) .
• No related‑party transactions since Jan 1, 2023 disclosed .
• Clawback policy in place; hedging prohibited without advance approval .

Vesting Schedules & Insider Selling Pressure

• Notable 2024 grants vesting in 2025:
  • 244,400 options with 100% vest on Mar 28, 2025 (potential single‑day supply) .
  • 305,500 options 25% vest on Jan 30, 2025, then monthly vest thereafter .
• CEO holds substantial in‑the‑money/near‑the‑money options across multiple strikes (see Equity Awards), which can create episodic selling windows upon vesting/exercise. Formal Form 4 transaction history not included here; no pledging disclosed .

Employment Contracts & Change‑of‑Control Economics

• Severance: 12 months base salary (18 months if within 3 months pre‑ or 12 months post‑CIC), plus medical continuation (12 or 18 months on same CIC timing) .
• Equity: Single‑trigger acceleration if awards are not assumed in a CIC; double‑trigger acceleration if terminated without Cause within 12 months post‑CIC when awards are assumed .
• Non‑compete/Non‑solicit specifics not disclosed in the proxy sections cited.

Board Service, Roles, and Independence Implications

• Dual role: CEO and director; not independent. Board mitigates by maintaining an independent Chair and regular executive sessions of independent directors .
• Committee independence preserved: CEO serves on no board committees .
• Attendance: At least 80% in 2024 by each director .

Say‑on‑Pay & Shareholder Feedback

• 2025 is the first year NXTC will hold the Say‑on‑Pay and Say‑on‑Frequency votes; board recommends FOR Say‑on‑Pay and annual frequency .

Compensation Committee Analysis

• Independent consultant: Pearl Meyer engaged; committee retains sole authority over advisor selection and assessed independence .
• Committee members are independent/non‑employee directors (Chair: Dr. Houston) .
• Peer group maintained and reviewed with Pearl Meyer for competitive positioning .

Investment Implications

• Alignment: CEO’s sizable beneficial stake (7.6%) and multi‑year time‑vested options support alignment, but 2024 single‑year cliff grant (244,400 options) created a concentrated vesting date in 2025 that can pressure near‑term float .
• Pay for performance: 2024 bonus paid at 81.25% of target driven by program execution, while TSR declined (to 55 from a $100 base over 2 years) and net losses persisted, reflecting typical clinical‑stage risk/reward timing mismatches; scrutiny on BD/finance under‑achievement (25% attainment) is warranted .
• Retention and CIC protection: Standard small‑cap biotech severance/CIC terms (12–18 months cash, medical continuation, equity acceleration) reduce retention risk through critical catalysts but can be dilutive in a sale scenario .
• Liquidity/listing risk: Active plan to secure Nasdaq compliance via reverse split authority is a governance and trading overhang; execution and communications around this will influence investor confidence and option exercise/sale behavior .