James McArthur
About James McArthur
James McArthur, Ph.D., 63, is PepGen’s President & Chief Executive Officer and a Class II director, roles he has held since January 2021 . He holds a Ph.D. in molecular oncology and a B.Sc. in biochemistry from McGill University, and completed post-doctoral fellowships at MIT and UC Berkeley . Under his tenure, PepGen advanced two clinical programs: PGN-EDO51 for DMD into two Phase 2 studies (with initial 5 mg/kg data reported and a 10 mg/kg cohort fully enrolled) and PGN-EDODM1 for DM1 into Phase 1/2 with dose-dependent splicing correction observed at 5–10 mg/kg, positioning both programs toward potential accelerated pathways pending regulatory feedback . The board has separated the Chair and CEO roles, with Laurie B. Keating serving as non-executive Chair, which supports independent oversight while McArthur leads strategy and execution .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| RA Capital Management, L.P. | Venture Partner | Aug 2020 – May 2021 | Brought investor/operator perspective immediately prior to joining PepGen |
| Imara (now Enliven via 2023 reverse merger) | Co-founder; President & CEO; Director | 2016–2018 (CEO), 2016–2020 (Director) | Advanced clinical-stage biotech; board experience through strategic transition |
| Vtesse | Founder | 2015–2017 | Created rare disease company acquired by Sucampo in 2017 |
| Tiburio Therapeutics | Founder | 2018 | Built newco platform in biopharma |
| Cydan Development | Founder | 2013 | Company creation vehicle for new therapeutics |
| Nightstar Therapeutics | Director | to 2019 | Board member through acquisition by Biogen (2019) |
| HealthCare Ventures | Entrepreneur-in-Residence | n/a | Company formation and venture incubation |
| Synovex/Adheron Therapeutics | Founding employee; Chief Scientific Officer; Consultant | 2006–2012 (CSO), 2012–2015 (Consultant) | Built platform leading to Roche acquisition in 2015 |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Friedreich’s Ataxia Research Alliance (FARA) | Member, Board of Directors and Scientific Advisory Board | Current | Patient advocacy alignment; scientific input to neuromuscular field |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 572,000 | 594,880 |
| Target Bonus (% of salary) | 50% | 50% (raised to 55% for 2025 in Feb-2025) |
| Actual Bonus ($) | 228,800 | 245,438 (based on 82.5% corporate goal achievement) |
| All Other Compensation ($) | 9,900 (401k non-elective) | 10,350 (401k non-elective) |
Notes:
- As an Emerging Growth Company (EGC), PepGen provides scaled compensation disclosure and is not required to hold say‑on‑pay advisory votes at this time .
- 2024 corporate performance was deemed achieved at 82.5% for bonus determination across NEOs .
Performance Compensation
Annual cash incentive (2024)
| Metric | Weighting | Target | Actual | Payout | Vesting/Timing |
|---|---|---|---|---|---|
| Corporate performance goals (specifics not disclosed) | Not disclosed | 50% of base salary | 82.5% of target | $245,438 | Paid Q1 2025 |
Option awards and vesting
| Grant Date | Securities (#) | Exercise Price ($) | Expiration | Vesting Schedule |
|---|---|---|---|---|
| 3/1/2024 | 300,000 | 16.62 | 2/28/2034 | 25% on first anniversary; remainder monthly over 36 months |
| 3/1/2023 | 275,000 total (120,312 exercisable; 154,688 unexercisable as of 12/31/24) | 15.25 | 2/28/2033 | 4-year schedule as above |
| 5/6/2022 | 466,095 total (301,019 exercisable; 165,076 unexercisable as of 12/31/24) | 12.00 | 5/5/2032 | 4-year schedule as above |
| 3/7/2022 | 40,815 total (28,060 exercisable; 12,755 unexercisable as of 12/31/24) | 11.23 | 3/6/2032 | 4-year schedule as above |
| 9/6/2021 | 434,335 total (347,794 exercisable; 86,541 unexercisable as of 12/31/24) | 8.96 | 9/5/2031 | 4-year schedule as above |
| 3/22/2021 | 325,054 total (317,631 exercisable; 7,423 unexercisable as of 12/31/24) | 2.71 | 3/21/2031 | 4-year schedule as above |
Option timing context (close-in-time to disclosures):
- 2024 annual grants (3/1/2024) occurred within four business days before 10-K filing; the stock declined ~14.7% from 3/5 to 3/7 close prices (16.63 → 14.18) .
- New-hire award to EVP R&D on 8/19/2024 occurred within four business days before related Form 8-K; negligible price change (9.83 → 9.85) .
Clawback: PepGen adopted a Dodd-Frank compliant recoupment policy effective Oct 2, 2023 for incentive-based compensation tied to financial reporting measures during the 3-year lookback in the event of a restatement .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 1,336,424 shares (3.9% of outstanding) as of March 31, 2025 |
| Composition | 1,334,730 options exercisable within 60 days; 1,694 shares held outright |
| Outstanding equity by grant (12/31/2024) | Exercisable: 317,631; 347,794; 28,060; 301,019; 120,312; 0; Unexercisable: 7,423; 86,541; 12,755; 165,076; 154,688; 300,000 (see table above) |
| Pledging/Hedging | Prohibited for executives and directors; no margin or pledging permitted per insider trading policy |
| Ownership guidelines | Not disclosed in proxy |
Plan overhang context:
- As of 12/31/2024, 6,142,855 securities were issuable upon exercise under equity plans, with 1,757,349 remaining available for future issuance; shares outstanding were 32,720,943 as of 3/31/2025 .
Insider selling pressure indicators:
- The 3/1/2024 CEO option grant (300,000) began vesting 3/1/2025 (25% cliff then monthly), creating regular vesting events that can coincide with open trading windows; pledging/hedging prohibitions mitigate alignment concerns .
Employment Terms
| Term | Detail |
|---|---|
| Employment agreement | Amended March 21, 2023; supersedes 2021 agreement |
| Target bonus | 50% through 2024; increased to 55% effective February 2025 |
| Termination without cause / good reason | 12 months base salary; up to 12 months COBRA premiums; prorated target bonus for year of termination; subject to release |
| Change-in-control (within 12 months) | 18 months base salary (lump sum); up to 18 months COBRA; target bonus for year (lump sum); full acceleration of time‑based unvested equity |
| 280G treatment | Best‑net cutback to avoid excise tax if it yields higher after‑tax amount |
Board Governance (Director Service, Committees, Independence)
- Board class/tenure: Class II director; term expires at 2027 annual meeting; director since 2021 .
- Independence: Not independent due to role as CEO; all other directors independent per Nasdaq/SEC rules .
- Committee roles: Not listed as a member of the Audit, Compensation, or Nominating & Corporate Governance Committees (those rosters exclude the CEO) .
- Board leadership: Chair and CEO roles are separated; Chair leads independent oversight .
- Attendance: Each director attended 75%+ of aggregate board and committee meetings in 2024 .
- Director pay: CEO receives no additional compensation for board service .
Director compensation framework (context for dual-role analysis):
- Non-employee directors receive cash retainers ($40k board; committee/Chair retainers) and option grants (Initial Award = 2x Annual Award; Annual Award = 13,000 options as of June 20, 2024) with standard vesting and sale event acceleration . The CEO receives executive compensation only .
Performance & Track Record
- DMD (PGN-EDO51): Phase 2 CONNECT1 low-dose (5 mg/kg) showed mean exon skipping of 2.15% at week 13 and increased dystrophin; 10 mg/kg cohort fully enrolled, with safety profile described and Health Canada permitting continued dosing at current dose levels; U.S. IND for CONNECT2 is on FDA clinical hold pending supportive data Q&A .
- DM1 (PGN-EDODM1): Phase 1 FREEDOM initial readout reported dose-dependent splicing correction at 5–10 mg/kg and a favorable emerging safety profile; Phase 2 FREEDOM2 open in Canada/U.K. .
- Regulatory designations: PGN-EDO51 holds orphan and RPDD; PGN-EDODM1 holds orphan and Fast Track .
No material legal proceedings involving McArthur were disclosed; the company noted no material legal proceedings for directors and executive officers .
Compensation Structure Analysis
- Mix/Levers: CEO compensation emphasizes long-dated stock options with standard four-year vesting; no CEO PSUs disclosed (2024 PSUs excluded CEO) .
- Pay-for-performance: Annual bonus determined by corporate goals (82.5% achievement for 2024); specific metric weights/thresholds were not disclosed under EGC scaled disclosure .
- Incentive risk controls: Clawback policy (restatement-based); prohibition on hedging/pledging; compensation committee independence and use of Pay Governance as external advisor ($212,670 in 2024) .
- Change in target bonus: Increase from 50% to 55% in 2025 raises fixed-target at-risk cash, modestly increasing guaranteed opportunity relative to base if goals are met .
Equity Ownership & Alignment Diagnostic
- Skin-in-the-game: 3.9% beneficial interest, predominantly via vested options, aligning outcomes with equity value creation .
- Overhang context: Significant company-wide option overhang and inducement plan capacity exist; ongoing vesting cycles can create orderly selling windows but pledging/hedging is prohibited, supporting alignment .
- Ownership policy: No executive stock ownership guidelines disclosed; monitoring adherence is therefore not applicable .
Employment Terms (Severance/CoC Economics) – Implications
- Standalone termination yields 12 months salary plus prorated target bonus and benefits, providing retention stability without excessive cash leverage .
- Double-trigger CoC protections (18 months salary, target bonus, benefit continuation, time-based equity acceleration) provide competitive protection through potential strategic transactions while maintaining time‑based equity alignment until termination .
- 280G best‑net cutback avoids inefficient tax gross‑ups, an investor‑friendly approach .
Investment Implications
- Alignment: High equity linkage via sizable multi-year option grants and a 3.9% beneficial stake aligns McArthur with long-term equity performance; prohibitions on hedging/pledging mitigate misalignment risks .
- Retention: Market-standard severance with enhanced CoC terms and ongoing vesting cadence support retention through key clinical/regulatory inflection points in 2025–2026 .
- Pay-for-performance rigor: Cash bonuses are tied to corporate goals (82.5% payout for 2024) but with limited disclosure of metric design/weights under EGC status, which reduces external visibility into performance calibration; independent committee oversight and clawback partially offset this transparency gap .
- Governance: Dual role as CEO and director, but not Chair, and no committee membership, with majority‑independent board and separated Chair/CEO roles, reduces independence concerns typical of combined roles .
- Trading signals: A 300,000‑share 2024 option grant began vesting in March 2025 and will continue monthly, creating predictable potential liquidity events in open windows; absence of pledging and presence of blackout policies may moderate selling pressure .