Wesley Kaupinen
About Wesley Kaupinen
Wesley H. Kaupinen is President, Chief Executive Officer, and a Class I director of Palvella Therapeutics (PVLA). He is 47, joined the PVLA board in December 2024, and previously led Legacy Palvella as CEO and director from December 2015–December 2024. He holds an MBA from Wharton and a BA in Economics from the University of Virginia, with prior roles at Insmed, Quaker Partners, Apax Partners, Synthes and J&J Cordis . Pay-versus-performance data for 2024 (largely reflecting pre-merger Pieris) shows a TSR value of $3.97 for a hypothetical $100 investment and net loss of $17.4 million, providing context for incentive alignment and turnaround imperatives under his leadership post-merger .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Legacy Palvella Therapeutics, Inc. | Chief Executive Officer; Director | Dec 2015–Dec 2024 | Led rare-disease strategy and pipeline development (QTORIN rapamycin) |
| Insmed, Inc. | SVP, Corporate Development & Commercialization | 2013–Aug 2015 | Commercial and corporate development for rare diseases |
| Quaker Partners | Principal | Not disclosed | Life sciences investing (public and venture) |
| Apax Partners | Associate, Healthcare Group | Not disclosed | Private equity healthcare investing |
| Synthes; J&J Cordis Cardiology | Commercial & GM roles | Early career | Commercial and general management experience |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Primrose Bio | Director | Current | Nucleic acid/protein manufacturing technologies; licensing focus |
| Biocoat Holdings, LLC | Director | Prior | Company acquired by GTCR (exit) |
| Intact Vascular, Inc. | Director | Prior | Company acquired by Royal Philips (exit) |
| TELA Bio, Inc. (NASDAQ: TELA) | Director | Prior | Public medtech operating exposure |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $375,462 | $575,000 |
| Target Bonus (% of Salary) | 30% (legacy agreement) | 50% (increased Dec 2024) |
| Actual Bonus Paid ($) | $0 | $287,500 |
Notes:
- Target bonus increased from 30% to 50% of base salary in December 2024, tied to corporate performance objectives .
- 2024 corporate performance score was 100%, supporting full bonus payout .
Performance Compensation
| Component | Metric | Weighting | Target | Actual | Payout / Fair Value | Vesting |
|---|---|---|---|---|---|---|
| Annual Cash Bonus (2024) | Corporate performance score | Not disclosed | Performance vs. corporate goals | 100% | $287,500 | N/A |
| Stock Options (2024) | Option awards (grant-date fair value) | N/A | N/A | N/A | $4,534,999 | Time-based (see grants table) |
| Stock Options (2023) | Option awards (grant-date fair value) | N/A | N/A | N/A | $209,858 | Time-based (see grants table) |
Option grants detail:
| Grant Date | Shares Granted | Exercise Price ($) | Expiration | Vesting |
|---|---|---|---|---|
| Feb 23, 2023 | 21,433 (9,824 ex.; 11,609 unex.) | 9.79 | Feb 22, 2033 | 48 equal monthly installments |
| May 28, 2024 | 81,459 (15,274 ex.; 66,185 unex.) | 7.53 | May 27, 2034 | 48 equal monthly installments |
| Dec 13, 2024 | 417,806 (all unexercisable at YE) | 13.60 | Dec 12, 2034 | 48 equal monthly installments |
Equity Ownership & Alignment
| Measure | Value |
|---|---|
| Total beneficial ownership (shares) | 1,717,283 |
| Ownership as % of outstanding | 15.4% (based on 11,042,965 shares outstanding on Apr 14, 2025) |
| Breakdown – Direct | 44,410 shares held of record by W. Kaupinen |
| Breakdown – Trusts | 781,409 shares (Wesley H. Kaupinen 2019 Irrevocable Trust); 781,409 shares (Christine L. Kaupinen 2019 Irrevocable Trust) |
| Options exercisable within 60 days | 110,055 shares |
| Pledging/Hedging | Prohibited under Insider Trading Policy (no pledging, hedging, margin) |
| Ownership guidelines | Not disclosed |
Insider reporting compliance:
- Company disclosure indicates timely Section 16 filings for 2024, with one late Form 4 for another director (Kiritsy); no delinquency noted for Kaupinen .
Employment Terms
| Term | Detail |
|---|---|
| Employment Agreement Date | May 20, 2020 (Legacy Palvella) |
| Term | Indefinite; terminable at will (30 days’ notice for termination without cause or resignation without good reason) |
| Target Bonus | Increased to 50% of base salary in Dec 2024 (from 30%) |
| Severance (non-CIC) | 12 months salary continuation upon termination without cause or resignation for good reason; subject to release and restrictive covenants and solvency conditions |
| Good Reason / Cause definitions | Detailed definitions including material reduction in duties/compensation or relocation; cause includes felony, misconduct, breach of fiduciary duty, etc. |
| Change-of-Control Economics | 280G cutback to avoid excess parachute payments; no separate multiple disclosed for CIC; acceleration terms for Kaupinen not specified in proxy |
| Restrictive Covenants | Confidentiality; non-compete and non-solicit for 12 months post-employment; IP assignment |
| Clawback | Incentive compensation recoupment policy for restatements and hedging violations (prior 3 fiscal years) |
| Pledging/Hedging | Prohibited |
Board Governance
| Item | Detail |
|---|---|
| Board Service | Class I director; director since Dec 2024; term expiring at 2027 annual meeting |
| Independence | Not independent (CEO); all other current directors are independent |
| Committee Roles | None |
| Chair/CEO Structure | Independent Chair (George M. Jenkins); separated roles |
| Executive Sessions | Independent directors meet without management |
| Attendance | Post-merger 2024 Board held one meeting; all directors attended ≥75% of meetings |
| Director Compensation | Employee director; no separate director compensation |
Director Compensation (Non-Employee Policy context)
- Non-employee director retainers and option grants are specified in the policy; Kaupinen does not receive this compensation as an employee director .
Related Party Transactions (Alignment/Signals)
| Date/Type | Detail | Amount |
|---|---|---|
| Dec 13, 2024 PIPE | Purchased 1,470 shares at $13.9965 per share | $20,577 |
| Jun–Jul 2024 Convertible Note | Purchased principal amount; converted into PIPE shares at closing | $20,000 principal |
Performance & Track Record
- Pipeline/regulatory: QTORIN rapamycin has Breakthrough Therapy, Fast Track, and Orphan Drug Designations for microcystic LMs; SELVA Phase 3 underway (top-line data expected Q1 2026); TOIVA Phase 2 in cutaneous VMs initiated (top-line Q4 2025) .
- Clinical evidence: Phase 2 in microcystic LMs demonstrated clinician- and patient-reported improvements with low systemic exposure; safety profile generally mild/moderate TRAEs .
- Strategic focus: Topical mTOR inhibition via QTORIN platform for rare genetic skin diseases with no approved therapies; IP protection through 2038–2042 .
Say-on-Pay & Shareholder Feedback
| Year | Say-on-Pay Approval (%) |
|---|---|
| 2024 | ~98% |
Compensation Structure Analysis
- Increased at-risk equity: Option award fair value rose from $209,858 (2023) to $4,534,999 (2024), reflecting significant new grants including post-merger grants .
- Higher fixed cash: Base salary increased to $575,000 in 2024 from $375,462 in 2023; target bonus increased to 50% (from 30%) and paid at 100% of corporate score .
- Equity grants are time-based (monthly vesting), not disclosed as performance-vested; annual cash bonus tied to corporate goals (corporate score 100%) .
Vesting Schedules and Insider Selling Pressure
- Time-based option grants vest in 48 equal monthly installments (Feb 2023, May 2024, Dec 2024 grants); large Dec 2024 grant (417,806 shares) implies ongoing monthly vesting and potential future liquidity windows if options become in-the-money . Note: Hedging/pledging is prohibited; no Section 16 delinquency disclosed for Kaupinen in 2024 .
Equity Ownership & Pledging
- Significant “skin-in-the-game” through trusts, direct holdings, and near-term exercisable options; pledging and hedging transactions are prohibited by policy, reducing misalignment risk .
Employment & Contracts (Retention Risk)
- Retention supported by 12-month salary severance for termination without cause/good reason, but no explicit CIC equity acceleration disclosed; non-compete/non-solicit at 12 months suggests post-departure protections but also potential executive mobility constraints .
- 280G cutback limits excess parachute payments in CIC, which is shareholder-friendly but may reduce executive CIC payouts .
Investment Implications
- Alignment: High beneficial ownership (15.4%) and PIPE/convertible participation indicate strong alignment with shareholders; prohibition on hedging/pledging reduces misalignment risk .
- Incentive design: Shift to larger time-vested option grants post-merger aligns with long-term value creation but may create predictable supply from monthly vesting; cash bonus driven by corporate score (100% achieved in 2024) suggests management discretion will matter in future years .
- Execution risk: Value creation is highly dependent on QTORIN rapamycin clinical/regulatory outcomes (SELVA Phase 3; TOIVA Phase 2) and financing; failure to achieve milestones could pressure compensation justification and retention .
- Governance: Separate Chair/CEO and independent committees mitigate dual-role risks; Kaupinen not independent (as CEO) and holds no committee seats, reducing compensation committee conflicts .
All facts and figures cited from Palvella Therapeutics filings: DEF 14A (Apr 30, 2025) and 10-K (Mar 31, 2025) .