Phillip Frost
OPKO HEALTHAbout Phillip Frost
Phillip Frost, M.D., age 88, has served as OPKO’s Chief Executive Officer and Chairman of the Board since March 2007, with prior track record leading IVAX Corporation and Key Pharmaceuticals and serving on boards across healthcare and industry . Recent pay-versus-performance disclosures show company-selected measures included revenue and relative TSR; OPKO’s revenue was 713,142 for FY2024 with net income of (53,224), and the company TSR value (based on an initial $100 invested on 12/31/2019) was 100.00 versus the NASDAQ Biotechnology peer group TSR of 118.20 . The most important performance measures used in setting pay-for-performance for 2024 were Adjusted Operating Income, Revenue, and Relative Total Shareholder Return .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| IVAX Corporation | Chairman & CEO | 1987–2006 | Led growth and eventual sale of IVAX to Teva; broad pharma commercialization exposure |
| Key Pharmaceuticals | Chairman | 1972–1986 | Built scale and overseen sale to Schering-Plough; early pharma leadership |
| Northrop Grumman | Director | 1996–2009 | Large-cap governance experience in defense/aerospace |
| Ladenburg Thalmann Financial Services | Director (2004–2006); Chairman (2006–2018) | 2004–2018 | Capital markets experience; governance oversight |
| American Stock Exchange | Governor (1992–2008), Co–Vice Chairman (2001–merger) | 1992–2008 | Market structure leadership |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Cocrystal Pharma (NASDAQ: COCP) | Director | Current | Biotech board service |
| Non-Invasive Monitoring Systems (OTC: NIMU) | Director | Current | Medical device board service |
| Grove Bank & Trust | Director | Current | Financial institution governance |
| Morgan Solar | Director | Current | Energy technology board service |
| University of Miami | Board of Trustees; Chair (2001–2004) | 1983–Present | Academic and community leadership |
| Additional civic/academic roles | Various committees and boards | Various | Smithsonian Regent (2006–2010); multiple science and medical committees |
Fixed Compensation
| Metric (USD) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary | 960,000 | 960,000 | 960,000 |
| Bonus | — | 480,000 | 480,000 |
| Stock Awards (RSUs) – Grant Date Fair Value | — | — | 710,000 |
| Option Awards – Grant Date Fair Value | — | 824,000 | — |
| All Other Compensation | 12,200 | 13,200 | 13,800 |
| Total | 972,200 | 2,277,200 | 2,163,800 |
Notes:
- Non-employee director compensation structure is separate and does not apply to employee directors like Dr. Frost .
Performance Compensation
- Performance metrics: The most important measures used in setting pay-for-performance for 2024 were Adjusted Operating Income, Revenue, and Relative TSR (no specific weightings disclosed) .
- Say-on-Pay support: 97% approval at the 2024 annual meeting, with no resulting changes to policies .
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Adjusted Operating Income | Not disclosed | Not disclosed | Not disclosed | Discretionary elements per CD&A | Options/RSUs vest per schedules below |
| Revenue | Not disclosed | Not disclosed | 713,142 (FY2024) | Not disclosed | Equity vesting as below |
| Relative TSR | Not disclosed | Not disclosed | Company TSR value 100.00 vs Peer 118.20 | Not disclosed | Equity vesting as below |
RSU Awards (Granted 7/24/2024):
- 500,000 RSUs to Dr. Frost; vest 50% on 7/24/2026, then 25% on 7/24/2027 and 7/24/2028; grant-date fair value $710,000 .
Outstanding Options (as of 12/31/2024):
| Grant | Exercisable | Unexercisable | Strike ($) | Expiration |
|---|---|---|---|---|
| 3/18/2015 | 500,000 | — | 14.42 | 3/17/2025 |
| 4/01/2016 | 500,000 | — | 10.41 | 3/31/2026 |
| 6/21/2018 | 500,000 | — | 4.46 | 6/20/2028 |
| 7/01/2019 | 350,000 | — | 2.47 | 6/30/2029 |
| 6/04/2020 | 450,000 | — | 2.27 | 6/03/2030 |
| 2/19/2021 | 400,000 | — | 4.81 | 2/18/2031 |
| 5/18/2023 | 200,000 | 600,000 | 1.58 | 5/17/2033 |
Vesting conventions (for referenced grants): Generally in four equal annual tranches beginning one year after grant (per footnotes) .
Additional context:
- No option exercises or RSUs vested for Named Executive Officers in FY2024, indicating limited near-term selling pressure from vesting events .
Equity Ownership & Alignment
| Ownership Item | Detail |
|---|---|
| Total beneficial ownership | 249,330,142 shares; 36.97% of outstanding |
| Ownership structure | Includes 213,234,014 shares held by Frost Gamma Investments Trust; plus direct and other trust holdings; also includes options to purchase 2,900,000 shares |
| Shares outstanding basis | 671,601,520 shares outstanding on Feb 24, 2025 |
| Options (exercisable / unexercisable) | 3,350,000 exercisable across 2015–2021 grants and 200,000 exercisable + 600,000 unexercisable from 2023 grant (see table) |
| RSUs (unvested) | 500,000 granted 7/24/2024 with multi-year vesting schedule |
| Pledging & hedging policy | Prohibited without prior written consent; short selling/derivatives restricted; trading windows observed |
| Insider transactions signal | Dr. Frost purchased additional 3.75% convertible senior notes (144A) on the open market in Sep 2024, Feb 2025, and Mar 2025; notes initially convertible at $1.15/share but not prior to 9/15/2028 absent certain conditions |
Employment Terms
| Term | Status |
|---|---|
| Employment start date | CEO/Chairman since March 2007 |
| Employment agreement | None; no individual agreement disclosed for Dr. Frost |
| Severance | None disclosed for Dr. Frost |
| Change-of-control | 2007 and 2016 plans provide accelerated vesting of all awards upon a Change in Control; estimated value of acceleration for Dr. Frost ≈ $1.2 million at 12/31/2024 |
| Non-compete / Non-solicit | Not disclosed |
| Garden leave / Post-termination consulting | Not disclosed |
Board Governance
- Board service history: Elected/Nominated since 2007; currently Chairman & CEO; board fixed at eleven directors .
- Independence and leadership: Combined CEO/Chairman structure; lead independent director identified (Pfenniger); six directors are independent; committee chairs are independent .
- Committee roles: Dr. Frost does not sit on Audit, Compensation, Governance, Investment, or Succession committees; all are comprised of independent directors .
- Attendance and sessions: Board met six times in FY2024; independent directors meet in executive session at least twice annually .
- Director compensation: Non-employee directors receive retainers and options; employee directors like Dr. Frost are not in the non-employee director compensation table .
Compensation Committee Analysis
- Composition: Compensation Committee chaired by Dr. Richard M. Krasno, with Drs. Lachman and Medel; met six times in FY2024 .
- Process: Committee relies heavily on CEO recommendations for other executives; uses internally generated market data, not a formal external consultant; equity under the 2016 plan; RSUs introduced in 2024 to further incentivize retention and alignment .
- Say-on-Pay: 97% approval in 2024; no changes deemed necessary .
Related Party Transactions
- Convertible notes exchange and purchases: Frost Gamma Investments Trust participated in 2024 affiliate note exchange; conversion rate 869.5652 shares per $1,000 (≈$1.15/share); Dr. Frost subsequently purchased 144A notes on the open market in Sep 2024, Feb 2025, Mar 2025 .
- E-commerce Distribution Agreement: NextPlat (Dr. Frost >20% interest) agreement for OPKO-branded storefront on Tmall; amended Oct 2024 to extend term to 2026 and expand platforms .
- Corporate offices: OPKO leases principal office space from Frost Real Estate Holdings LLC; amended Aug 1, 2024 with rent terms escalating over five years .
- Aircraft reimbursement: Company reimbursed ~$131,000 for company-related use of aircraft beneficially owned by Dr. Frost (no reimbursement for personal use) .
- Investment holdings and governance interlocks: Several minority investments overlap with directors’ roles; Audit Committee oversees and approved related party transactions per policy .
SAY-ON-PAY & Shareholder Feedback
- 2024 Say-on-Pay approval: Approximately 97% of votes cast approved compensation; Board and Compensation Committee saw no need for changes .
Equity Performance Context
| Measure | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Company TSR value of $100 (12/31/2019 base) | 268.71 | 327.21 | 85.03 | 102.72 | 100.00 |
| Peer Group TSR (NASDAQ Biotech) | 126.42 | 126.45 | 113.65 | 118.87 | 118.20 |
| Net Income | (30,586) | (30,143) | (328,405) | (188,863) | (53,224) |
| Revenue | 1,435,413 | 1,774,718 | 1,004,196 | 863,495 | 713,142 |
Risk Indicators & Red Flags
- Dual role: CEO + Chairman concentration mitigated by lead independent director and independent committee chairs, but remains a governance risk for some investors .
- Related party breadth: Multiple transactions involving entities with Dr. Frost’s interests (notes, leasing, e-commerce, aircraft reimbursements) require ongoing scrutiny for alignment and arm’s-length terms; Audit Committee policy governs approvals .
- Pledging/hedging: Policy restricts pledging and derivative transactions without written consent; reduces misalignment risk, though exceptions may be permitted by consent .
- Insider selling pressure: No equity vesting or option exercises by NEOs in 2024; RSUs vest starting mid-2026, deferring near-term selling pressure .
Compensation Peer Group
- Benchmarking approach: Internally generated survey of ~12 biotech/pharma/lab companies; no formal externally defined peer group; significant reliance on CEO recommendations for other NEOs .
Expertise & Qualifications
- Medical and pharma leadership: Physician with decades of executive leadership across pharma development and commercialization; extensive board and civic roles .
Employment Terms Summary
| Item | Detail |
|---|---|
| Agreements | No individual employment agreement for Dr. Frost |
| Severance | None disclosed for CEO; certain other executives have 12 months salary/benefits if terminated without cause or for good reason |
| Change-in-control | Accelerated vesting of awards under 2007 & 2016 Equity Incentive Plans; estimated acceleration value ~$1.2 million for Dr. Frost (as of 12/31/2024) |
Investment Implications
- Alignment: Very high insider ownership (≈36.97%) aligns CEO interests with shareholders; RSU vesting horizons into 2026–2028 lower near-term equity selling pressure .
- Governance checks: Dual CEO/Chair role is offset by a lead independent director and fully independent committees, but investors may still ascribe a governance discount; transparent related party oversight mitigates but does not eliminate concerns .
- Performance linkage: Compensation framework cites Adjusted Operating Income, Revenue, and Relative TSR as key measures, but lacks disclosed weightings and targets; high Say-on-Pay support (97%) implies investor acceptance despite limited metric specificity .
- Trading signals: Dr. Frost’s open-market purchases of convertible notes with out-year convertibility (not before 9/15/2028) at ~$1.15/share equivalent suggest long-dated confidence and potentially supportive insider signaling, though equity dilution risk exists upon conversion depending on future prices .