Philip D. McLellan
QuidelOrthoAbout Philip D. McLellan
Philip D. McLellan is Chief Operations Officer (COO) of QuidelOrtho, appointed effective November 15, 2024 after serving as Senior Vice President of Operations since November 2020; he is 56 and holds a B.S. in Mechanical Engineering from Georgia Institute of Technology . He previously led operations across multiple life sciences divisions at Thermo Fisher Scientific for 11 years and held global automotive manufacturing roles at Toyota Motor Manufacturing for 13 years, giving him deep experience in large–scale, lean operations . Company performance context for FY2024: revenue $2.783B (respiratory $504M; non-respiratory $2.279B), labs revenue up 3.9% in constant currency ex-COVID/non-core; the annual cash plan’s Company metrics (revenue and Adjusted EBITDA) were achieved above target, driving a 105% payout of the Company and Individual components . The firm highlighted cost‑savings initiatives and momentum into 2025, relevant to McLellan’s operations remit .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| QuidelOrtho | SVP, Operations | Nov 2020–Nov 2024 | Led enterprise operations through integration and cost initiatives; promoted to COO |
| Thermo Fisher Scientific | Division Operations Leadership (Laboratory Consumables, Genetic Analysis, Bioproduction) | 11 years | Scaled life sciences manufacturing and supply chains across multiple businesses |
| Toyota Motor Manufacturing | Global automotive manufacturing roles | 13 years | Lean manufacturing and global plant operations experience |
Fixed Compensation
| Component | FY2024 | Notes |
|---|---|---|
| Base Salary ($) | 515,000 | Increased upon promotion in Nov 2024 |
| Target Bonus (% of Salary) | 75% | COO target under 2024 Cash Incentive Plan |
| Actual Bonus Paid ($) | 405,563 (paid Apr 2025) | 105% of target Company and Individual components based on above‑plan results |
| 2025 Target Bonus (% of Salary) | 75% (threshold 15.8%; max 112.5%) | Structure mirrors 2024 plan |
Performance Compensation
| Metric | Weighting | Threshold | Target | Max | Actual | Payout Mechanics |
|---|---|---|---|---|---|---|
| Revenue (Company Component) | 40% | $2,619M | $2,757M | $2,895M | $2,779M | Linear; achieved above target → 105% Company component |
| Adjusted EBITDA (Company Component) | 60% | $550M | $550M | $605M | $557M | Must meet to fund plan; achieved above target → 105% Company component |
| Individual Component | 30% of total bonus | N/A | N/A | N/A | Management set at 105% for goals advancing efficiency, cost savings, customer excellence, profitable growth | Linear 25–125% range; funded by Company results |
Vesting and award mix:
- FY2024 equity for McLellan (as non‑executive program): 9,713 time‑based RSUs vest in equal annual installments over 3 years from grant; 9,714 non‑qualified options vest 1/3 annually, strike $39.08 .
- FY2025 equity: target $1,000,000 split ~50/50 between options (14,692) and time‑based RSUs (14,693), each vesting 1/3 annually .
- Retention awards (May 2024): $100,000 cash payable June 30, 2025; $200,000 (4,749) RSUs fully vest June 30, 2025, with acceleration if involuntary termination without cause before that date (subject to release/compliance) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 28,273 shares (includes 13,538 options exercisable within 60 days; 5,182 RSUs vesting within 60 days; 2,643 fully vested RSUs with no voting/dispositive power) |
| Ownership % of Outstanding | <1% (asterisk category in proxy table) |
| Outstanding Awards (12/29/2024 close $44.25) | Unvested RSUs: 9,713 (Apr 22, 2024 grant; 3-year schedule) valued $429,800; retention RSUs 4,749 valued $210,143; legacy RSUs also disclosed with market values |
| Options | Unexercisable options: 9,714 (strike $39.08, exp. 04/22/2034); additional legacy option positions; in-the-money value of unvested options used in CIC illustration: $50,221 |
| Stock Ownership Guidelines | Section 16 officers must hold 2× salary; retain 50% of shares from awards until compliant; executives meet or are in compliance by retaining shares |
| Hedging/Pledging | Prohibited; no approvals granted to permit pledging for current employees or directors |
Upcoming vesting/selling pressure indicators:
- June 30, 2025: retention RSUs (4,749) vest and $100,000 cash retention paid (absent separation) .
- Annual anniversaries: one‑third of FY2024 RSUs/options vest on each anniversary of Apr 22, 2024; FY2025 awards vest one‑third annually from grant approval in Jan 2025 .
Employment Terms
| Term | Summary |
|---|---|
| Employment Status | At‑will for McLellan (and other executives) |
| Severance (Non‑CIC) | Lump sum 2× highest salary in prior 3 years + 2× average cash bonus over prior 2 years; $25,000 transition stipend; up to 2 years continued health benefits; standard release and compliance conditions |
| Change‑in‑Control (CIC) | Double‑trigger benefits; immediate vesting of unvested equity upon CIC termination (performance awards deemed earned at greater of target or actual through CIC date) |
| Potential Payments Illustration (as of 12/27/2024) | Involuntary not for cause: $1,030,000 salary; $441,141 bonus; $285,059 RSU acceleration; $49,798 healthcare; $125,000 other payments; CIC totals include RSU acceleration $735,258 and options acceleration $50,221 |
| Indemnification Agreement | Entered into in connection with appointment to COO (form previously filed) |
Clawbacks:
- Nasdaq‑compliant clawback for incentive‑based compensation (including TSR/stock‑price metrics) with 3‑year lookback upon required accounting restatement; discretionary provisions to recover other compensation and a supplemental policy targeting misconduct or “Just Cause” events (3‑year lookback; avoidance of double recovery) .
Compensation Structure Analysis
- Mix and risk: McLellan’s long‑term incentives are 50/50 options vs time‑based RSUs (no PSUs), consistent with peer practices for non‑CEO senior roles; this lowers performance‑metric risk versus PSU-heavy structures used for CEO/CFO .
- Retention emphasis: 2024 cash/RSU retention awards with acceleration upon involuntary termination suggest near‑term retention priority during leadership transition and cost program execution .
- Performance metrics: Annual bonus tied 40% to revenue and 60% to Adjusted EBITDA (plan funded only if Adjusted EBITDA target met); FY2024 achieved above plan, yielding 105% payouts .
- Peer benchmarking: Compensation practices informed by a refreshed 2024 peer group and Compensia/Radford market data; broader senior executives increased use of performance‑based RSUs, though McLellan’s mix remained options/RSUs .
Say‑on‑Pay & Shareholder Feedback
- 2024 say‑on‑pay approval exceeded 94%, and the program emphasizes pay‑for‑performance alignment; annual say‑on‑pay continues .
Risk Indicators & Red Flags
- Hedging/pledging prohibited; none approved for current insiders .
- Enhanced clawback coverage (Nasdaq rule 5608) and supplemental misconduct recovery .
- FY2024 internal control material weaknesses were identified (revenue/AR/rebates controls; deferred tax asset realizability; interim goodwill assumption review controls remediated by Q4), which may affect bonus/TSR PSU clawback applicability if restatements occur .
Investment Implications
- Alignment: Large ongoing time‑based RSU and option grants with strict ownership/retention guidelines and prohibitions on hedging/pledging support alignment, though absence of PSUs in McLellan’s mix reduces explicit metric linkage vs CEO/CFO .
- Retention and potential selling pressure: 6/30/2025 vest of retention RSUs and annual anniversaries on 2024/2025 grants are potential windows for insider activity; monitor Form 4s near those dates .
- Execution focus: With FY2024 bonuses funded by exceeding revenue/Adjusted EBITDA targets and cost‑savings initiatives highlighted, McLellan’s operations leadership is central to margin/efficiency trajectory into 2025 .
- CIC/severance economics: Standard double‑trigger CIC with full acceleration and meaningful cash severance in non‑CIC and CIC scenarios; retention awards accelerate upon involuntary termination—reduces departure friction in near term .