Matthew Walsh
Organon &About Matthew Walsh
Matthew Walsh, 58, is Organon’s EVP & CFO (since 2021), with prior CFO roles at Allergan (2018–2020) and Catalent (2008–2018). He holds an MBA and a BS in chemical engineering from Cornell and is a CFA charterholder; he also serves on Certara’s board as Audit Chair (since 2020) . Under Walsh’s financial leadership, Organon reported 2024 revenue of $6.4B and adjusted EBITDA of $1.96B, with AIP payouts set at 134% based on company scorecard performance . Pay-vs-performance disclosures show Organon’s TSR value of a $100 investment at $48.05 in 2024 versus $129.75 for the peer group, highlighting TSR headwinds despite EBITDA delivery .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Allergan plc | EVP & CFO | 2018–2020 | Led finance at large-cap biopharma; capital allocation and portfolio optimization |
| Catalent, Inc. | SVP (2008–2012); EVP (2012–2018); CFO | 2008–2018 | Scaled CDMO operations; financing growth and M&A; operational excellence |
| Escala Group; GenTek | Finance & leadership roles | n/a | Corporate finance and leadership experience |
| Chemical & banking industries | Corporate development & related roles | n/a | Deal-making, capital markets, development expertise |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Certara, Inc. | Director; Audit Committee Chair | 2020–present | Software/consulting for life sciences; governance and financial oversight |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 849,385 | 890,077 | 900,000 |
| AIP Target (%) | 80% | 80% | 80% |
| AIP Target ($) | $679,508 | $712,062 | $720,000 |
| Actual AIP Paid ($) | 822,720 | 705,600 | 964,800 |
Notes:
- 2024 AIP payout driven by 134% company scorecard result (Constant Currency Revenue 40%, Adjusted EBITDA 40%, Organizational Health 20%) .
- Talent Committee approved 2025 TTDC increase of 10% for Walsh to align with market practices .
Performance Compensation
2024 Annual Incentive Plan (AIP)
| Metric | Weight | Target Design | 2024 Outcome | Impact |
|---|---|---|---|---|
| Constant Currency Revenue | 40% | Board-aligned annual plan | Exceeded target; within scorecard | Contributed to 134% payout |
| Adjusted EBITDA | 40% | Board-aligned annual plan | Adjusted EBITDA defined to exclude FX, certain BD expenses, SBC | Contributed to 134% payout |
| Organizational Health Priorities | 20% | Engagement, ERP deployment, TSA exits | 190% achievement | Lifted payout to 134% |
| Walsh Final Award ($) | — | Target $720,000 | Company scorecard 134% | $964,800 |
2024 LTI Grants and Vesting
| Instrument | Grant Date | Quantity/Terms | Vesting | Valuation |
|---|---|---|---|---|
| RSUs | 3/29/2024 | 45,213 shares | 1/3 annually over 3 years | Grant-date FV $849,985 |
| NQSOs | 3/29/2024 | 185,185 options @ $18.80 | 1/3 annually over 3 years | Grant-date FV $849,999 |
| PSUs (Target) | 3/29/2024 | 45,213 shares | 3-year cliff; metrics below | Grant-date FV $1,981,438 |
PSU performance metrics and design:
- 50% Three-year cumulative Free Cash Flow; 25% Three-year cumulative Constant Currency Revenue; 25% Three-year Relative TSR vs NYSE Arca Pharma Index; with a two-year cumulative Adjusted EBITDA threshold gating FCF/Revenue components .
- TSR payout schedule: 25th/55th/75th percentile → 50%/100%/200% (capped at target if absolute TSR negative) .
Historical PSU vesting outcomes:
- 2021 PSUs (TSR relative): 50.87% payout .
- 2022 PSUs (70% FCF; 30% TSR): 58.75% payout (FCF achieved 83.93%; TSR zero due to underperformance/absolute TSR cap) .
Equity Award Realization
| Metric | 2024 |
|---|---|
| Shares vested (RSUs/PSUs) | 105,612 |
| Value realized on vesting ($) | 2,000,931 |
| NQSO exercises | None |
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Beneficially owned shares | 133,084 |
| Stock awards currently exercisable or vesting within 60 days | 457,834 |
| Shares outstanding (record date) | 259,956,063 |
| Ownership as % of outstanding | ~0.051% (133,084 / 259,956,063) |
| Stock ownership guidelines | 3x base salary for execs (non-CEO); retain 50% of after-tax vested shares until met |
| Compliance status (company-wide) | As of Dec 2024, two NEOs met/exceeded; others on pace |
| Hedging/pledging | Prohibited for directors and specified key employees (including Section 16 officers) |
Outstanding equity (selected items at FY2024):
- Unexercised options: 5/4/2021 (193,302 @ $36.11), 8/17/2021 (44,642 @ $35.38), 3/31/2022 (47,766 exercisable/23,883 unexercisable @ $34.93), 3/31/2023 (43,256/86,514 @ $23.52), 3/29/2024 (185,185 unexercisable @ $18.80) .
- Unvested RSUs and PSUs market values disclosed (e.g., RSUs: $674,563; PSUs: $2,698,282) based on 12/31/2024 price .
Employment Terms
| Provision | Standard Terms | Walsh-Specific Values (as of 12/31/2024) |
|---|---|---|
| Employment agreement | Spin-related letter; no fixed term; governed by company plans/policies | Letter agreement; Severance/CIC plans apply |
| Severance (no cause) | Lump sum = 1x base + target AIP; pro-rata AIP (timing contingent); welfare benefits continuation (12 months) | Severance pay $1,620,000; pro-rata AIP $720,000; welfare $34,133 |
| Change-in-control (double trigger) | Lump sum = 2x base + target AIP; pro-rata AIP; welfare benefits continuation (24 months) | Severance pay $3,240,000; pro-rata AIP $720,000; welfare $77,201 |
| Equity in termination scenarios | Pro-rata or full acceleration per award terms; PSUs convert to time-based RSUs at target upon CIC | RSU acceleration: $435,309; PSU acceleration: $1,110,483 (no cause/retirement/death/disability); CIC termination RSU $1,149,720; PSU $2,644,102 |
| Clawback | NYSE Rule 10D-1-compliant; recover excess incentive comp on restatement; broader recoupment for egregious conduct | Applies to all NEOs |
| Non-compete/non-solicit | Release may include restrictive covenants | As applicable under Severance Plan |
| Hedging/pledging policy | Prohibited | Applies to Walsh |
Perquisites/other compensation (2024):
- 401(k) company contributions: $7,789; U.S. Non-Qualified Savings Plan contributions: $192,911; Total “All Other Compensation”: $200,700 .
Performance & Track Record
Financial Performance (Company)
| Metric | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|
| Revenues ($) | 6,304,000,000* | 6,174,000,000* | 6,263,000,000* | 6,403,000,000* |
| EBITDA ($) | 2,116,000,000* | 1,924,000,000* | 1,645,000,000* | 1,765,000,000* |
Values retrieved from S&P Global.
Additional 2024 performance highlights:
- Revenue $6.4B; Adjusted EBITDA $1.96B; Non-GAAP adjusted diluted EPS $4.11 .
- Free cash flow before one-time costs $967M; cash dividends returned $297M .
Pay vs Performance (TSR and Operating Metrics)
| Year | Value of $100 Investment (Organon TSR) | Peer Group TSR (NYSE Arca Pharma) | Net Income ($mm) | Adjusted EBITDA ($mm) |
|---|---|---|---|---|
| 2021 | 83.72 | 114.88 | 1,351 | 1,441 |
| 2022 | 79.65 | 120.52 | 917 | 2,232 |
| 2023 | 43.71 | 126.39 | 1,023 | 2,000 |
| 2024 | 48.05 | 129.75 | 864 | 2,109 |
Say-on-pay:
- 2024 approval: ~84% in favor .
Compensation peer group:
- Includes Agilent, Avantor, Bausch, Baxter, BD, Biogen, Boston Scientific, Catalent, Edwards, Elanco, Hologic, Intuitive, IQVIA, Perrigo, Regeneron, Revvity, Vertex, Viatris, Zoetis; recalibrated in 2024 (e.g., added Jazz, Incyte for 2025 peer group) .
Governance/Risk context:
- Company prohibits hedging/pledging; double-trigger CIC; option repricing without shareholder approval prohibited; robust clawback .
- Audit Committee reported no related party transactions requiring disclosure since Jan 1, 2024 .
- 2025 internal investigation found improper U.S. wholesaler sales practices for Nexplanon; small revenue pull-forward impacts; remediation underway; CFO provided detailed quarterly effects (e.g., $17M pull-forward in Q3’25 not offset in Q4’25) .
Investment Implications
- Pay-for-performance alignment: Walsh’s incentives are weighted to multi-year FCF and revenue with an EBITDA threshold, plus relative TSR—strengthening capital efficiency and growth focus; historical PSU payouts (50.9%–58.8%) reflect disciplined targets and TSR underperformance headwinds .
- Selling pressure/vesting calendar: 2024 RSU/NQSO grants vest 1/3 annually over three years; monitor vesting dates for potential Form 4 selling around anniversaries; Walsh realized ~$2.0M on 2024 vesting and has meaningful unvested RSUs/PSUs and unexercised options outstanding .
- Retention and CIC economics: Cash severance equals 1x salary+bonus; CIC at 2x with RSU/PSU accelerations—moderate protection reduces retention risk, but still material change-of-control leverage; welfare continuation varies by scenario .
- Ownership alignment: Walsh beneficially owns 133,084 shares and is subject to 3x salary guidelines with retention requirements; hedging/pledging is prohibited, supporting alignment; his stake (~0.051%) is modest relative to float, but combined with unvested equity and guidelines, promotes alignment .
- Trading signals: Watch for upcoming PSU certification/settlement windows, annual March grants, and policy developments affecting Nexplanon; internal control remediation could reduce quarter-end channel management volatility (less risk of pull-forward patterns) .