Timothy Kelly
About Timothy Kelly
Timothy Kelly is Chief Financial Officer of Praxis Precision Medicines and has served as CFO since May 2021; he is 52 years old, with a B.A. in economics from the College of William & Mary and an MBA from Columbia Business School . Prior roles include CFO of Foundation Medicine (2019–Apr 2021) and a series of finance leadership positions at Roche/Genentech (2003–2019) including UK Pharma Finance Director (2017–2019) and Head of Group Strategic Planning (2013–2017) . Praxis’s total shareholder return (TSR) from 12/31/2020 to 12/31/2024 implies a $100 initial investment fell to $9.33, while GAAP net income (loss) for 2024 was -$183 million (values in millions) . Praxis states that it does not use financial performance measures to determine executive pay, focusing instead on clinical/R&D and business objectives .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Foundation Medicine, Inc. | Chief Financial Officer | 2019–Apr 2021 | Led finance and corporate management functions (accounting/tax, billing/reimbursement, procurement, corp dev, PMO, FP&A) . |
| Roche Pharma (UK) | Finance & Corporate Services Director | 2017–2019 | Country finance leadership and corporate services oversight . |
| Roche Group (Switzerland) | Head of Group Strategic Planning | 2013–2017 | Group-level strategic planning leadership . |
| Roche/Genentech | Various finance roles | 2003–2013 | Progressive finance responsibilities across Roche and Genentech . |
Fixed Compensation
| Metric | 2023 | 2024 | 2025 (effective Jan 1, where applicable) |
|---|---|---|---|
| Base salary ($) | 465,000 | 511,500 | 526,845 |
| Target annual bonus (% of base) | 40% | 40% | 40% |
| Actual annual bonus ($) | 204,600 | 409,200 | — |
Notes:
- 2024 corporate performance was certified at 200% of target; bonuses also incorporate individual performance objectives .
- Praxis focuses incentive objectives on financial/compliance milestones, portfolio advancement and clinical/R&D goals rather than financial KPIs .
Performance Compensation
Annual cash incentive structure and outcomes:
| Year | Metric framework | Corporate performance factor | Individual performance | Actual payout ($) | Vesting/timing |
|---|---|---|---|---|---|
| 2024 | Financial/compliance, CNS portfolio, genetics-informed pipeline, company transformation; plus role-based objectives | 200% of target | Incorporated (not quantified) | 409,200 | Paid after year-end per program |
| 2023 | Financial/compliance, CNS portfolio, genetics-informed pipeline, company transformation; plus role-based objectives | 110% of target | Incorporated (not quantified) | 204,600 | Paid after year-end per program |
Equity awards are the primary long-term incentive; Praxis uses stock options and RSUs, with vesting designed to promote retention and alignment .
Equity Ownership & Alignment
Beneficial ownership and outstanding awards:
| Item | Detail |
|---|---|
| Beneficial ownership (as of Apr 28, 2025) | 66,403 shares (<1% of SO), consisting of 3,745 shares plus 62,658 options exercisable within 60 days . |
| Shares outstanding reference | 20,368,909 shares of common stock outstanding as of Apr 28, 2025 . |
| Hedging/derivatives policy | Officers and directors are prohibited from hedging or derivative transactions in Company securities (e.g., options, collars, forwards, swaps, exchange funds) . |
| Pledging | No explicit pledging prohibition disclosed in the proxy; not disclosed . |
| Ownership guidelines | No executive stock ownership guidelines disclosed; not disclosed . |
Key outstanding equity awards at 12/31/2024 (selected CFO holdings):
| Grant/vesting commencement date | Instrument | Exercisable | Unexercisable | Exercise price | Expiration | Notes |
|---|---|---|---|---|---|---|
| 01/12/2024 | Stock option | 15,000 | 15,000 | $43.37 | 01/12/2034 | 50% vested at grant; balance: 25% after 1 year, then monthly over 36 months . |
| 01/12/2024 | Stock option | 9,099 | 27,301 | $56.94 | 07/29/2034 | 7/48ths vested on 07/29/2024; remainder monthly over ~41 months . |
| 01/07/2022 | Stock option | 4,074 | 1,525 | $271.65 | 01/07/2032 | Standard 4-year vesting (25% after 1 year, then monthly) . |
| 06/22/2022 | Stock option | 2,705 | 1,628 | $31.80 | 06/22/2032 | Standard 4-year vesting . |
| 01/12/2023 | Stock option (in lieu of prior cash bonus) | 2,830 | — | $44.40 | 01/12/2033 | Fully vested at grant . |
| 01/12/2023 | Stock option | 4,788 | 5,211 | $44.40 | 01/12/2033 | Standard vesting . |
| 05/25/2021 | Stock option | 11,933 | 1,399 | $296.10 | 06/01/2031 | Standard vesting . |
| 01/07/2022 | RSU | — | 800 unvested | — | — | RSUs vest in four equal annual installments . |
| 01/12/2024 | RSU | — | 7,800 unvested | — | — | RSUs vest in four equal annual installments; value at 12/31/2024: $600,288 at $76.96/share . |
Additional alignment and governance items:
- As of 12/31/2024, the Company’s stock price was $76.96 (used by the Company to value RSUs), implying the 2024 option grants at $43.37 and $56.94 were in-the-money at that date .
- Equity award timing: in 2024, grants were made within one business day following the filing/furnishing of a Form 8-K disclosing material information; CFO received 30,000 options at $43.37 on 1/12/2024; closing price change the next trading day was -5.38% (Item 402(x) disclosure) .
Employment Terms
| Term | Detail |
|---|---|
| Employment status | At-will . |
| Base salary (2025) | $526,845 . |
| Target bonus | 40% of base salary . |
| Severance (non‑CoC) | If terminated without cause or resign for good reason: 9 months base salary continuation; prior-year unpaid bonus if earned; pro‑rated current-year bonus based on actual performance; COBRA premium contribution up to 9 months (conditions apply) . |
| Change-in-control (double-trigger) | If terminated without cause or resign for good reason within 3 months before or 18 months after a CoC: lump sum = 1x (base salary + target bonus) plus pro‑rated target bonus; prior-year unpaid bonus if earned; COBRA premium contribution up to 12 months; 100% acceleration of all time‑based equity; performance-based awards per award terms . |
| 280G treatment | Cutback to avoid excise tax if it increases net after-tax benefit; no excise tax gross‑up . |
| Clawback policy | Awards subject to recoupment under Company clawback policy and applicable law, including restatements or errors . |
| Repricing prohibition | No option/SAR repricing or cash exchange without stockholder approval (outside limited corporate actions) . |
| Insider trading/hedging | Officers/directors prohibited from hedging and derivative transactions in Company securities . |
Compensation Structure Analysis
- Cash vs equity mix: 2024 total comp rose to $4.05M from $1.02M in 2023, driven by a large increase in option awards ($2.66M) and the addition of RSUs ($444k), signaling a shift toward a mixed equity package (options + RSUs) versus 2023’s options-only approach .
- Bonus outcomes vs goals: Corporate performance was scored at 200% in 2024 vs 110% in 2023, reflecting stronger achievement of disclosed non-financial objectives; Kelly’s bonuses increased accordingly ($409k vs $205k) .
- Award timing controls: 2024 grants were made immediately after material disclosures (Item 402(x) table), reducing spring-loading concerns .
- Governance and clawbacks: Plan embeds clawback/recoupment and prohibits repricing without stockholder approval, reducing shareholder risk .
Performance & Track Record
| Performance indicator | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| TSR value of $100 initial investment | 35.81 | 4.33 | 2.70 | 9.33 |
| GAAP Net Income (Loss), $mm | -167 | -214 | -123 | -183 |
Notes:
- Praxis discloses that it does not use financial performance measures to set executive compensation; metrics emphasize clinical/R&D and business milestones .
- 2025 proxy also notes Essential3 interim futility recommendation for ulixacaltamide Study 1; Company is completing both Phase 3 studies with readouts expected in Q3 2025, while advancing epilepsy programs—context for operational risk during Kelly’s tenure as CFO .
Related Party, Perquisites, and Other Considerations
- Perquisites: “All Other Compensation” for 2024 includes cell phone reimbursement, tax gross-ups on taxable long-term disability and wellness benefits, and Company 401(k) matching contributions .
- Related party transactions: Policy requires Audit Committee approval for related party deals; no CFO-specific related transactions disclosed .
Investment Implications
- Alignment and retention: Significant unvested options and RSUs with long-dated, monthly vesting schedules (notably the 2024 grants) support retention and alignment with shareholders; double-trigger CoC protection (1x cash + full time-based equity acceleration) is standard and suggests moderate retention risk absent a transaction .
- Incentive risk: The Company’s reliance on non-financial metrics (clinical/R&D milestones) and history of high corporate performance factors (200% in 2024) increase discretion and could decouple pay from TSR, which has been weak over the multi-year period .
- Selling pressure watchpoints: Annual RSU vesting (7,800 units from 2024 award) and ongoing monthly option vesting create potential periodic liquidity events; no hedging allowed, but absence of explicit pledging prohibitions is a governance watch item .
- Governance strengths: Clawback and anti-repricing provisions, plus disciplined award timing around disclosures, mitigate several pay-risk concerns .