Paul Kelly
About Paul Kelly
Paul Kelly, age 66, is Chief Operating Officer (effective January 1, 2025) and a Director at Relmada Therapeutics (RLMD), serving on the board since November 2015; he is not an independent director given his executive role and prior consulting engagement with the company . He holds a BA in Biochemistry from Brown University, attended the University of Rochester School of Medicine, and earned an MBA in Finance from the Simon School at the University of Rochester; his career includes senior sell-side biotech research roles and industry consulting . Company TSR in the pay-versus-performance disclosure was $10.90 in 2022, $12.91 in 2023, and $1.62 in 2024 (smaller reporting company disclosure) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Relmada Therapeutics | Director | 2015–present | Governance; previously chaired Compensation Committee and served on Audit; removed from committee roles effective 1/1/2023 |
| Relmada Therapeutics | Special Advisor to CEO | 2023–2024 | Advisory support during strategic pivot; consulting compensation replaced options not approved by shareholders |
| Relmada Therapeutics | Chief Operating Officer | Effective 1/1/2025 | Operational leadership for pipeline diversification and execution |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Mabon Securities; UBS; Volpe, Brown, Whalen; ING; Merrill Lynch | Equity Research Analyst (Biotech) | Began 1993; analyst roles prior to 2007 | Coverage and sector expertise; named to Fortune All-Star Analyst team (2000) |
| Various biotech companies and hedge funds | Consultant | Since 2007 | Strategic advisory across biotech; advised Spring Bank Pharmaceuticals and VisionGate |
Fixed Compensation
| Component | Value | Notes |
|---|---|---|
| Base Salary (COO) | $476,000 | Effective 1/1/2025 |
| Target Bonus % (COO) | 40% of base salary | Discretionary plan tied to corporate/individual goals |
| 2024 Cash Bonus | Not paid (company-wide NEO bonuses suspended for FY2024) | Board response to 2024 say-on-pay vote |
| 2025 Salary Increase | None (no NEO increases for FY2025) | Cost control measure |
Performance Compensation
| Metric | Weighting | Target | Actual/Payout | Vesting |
|---|---|---|---|---|
| Annual cash bonus (COO) | Discretionary; corporate goals emphasized | 40% of base salary | FY2024 bonuses not paid; FY2025 TBD | Annual cash; subject to Compensation Committee review |
| Long-term equity awards | As granted under 2014/2021 Plans | Not specified for FY2024 | FY2024 long-term awards not granted to NEOs | Options/RSUs per plan terms; single-trigger CIC acceleration in plan |
The company adopted a clawback policy in November 2023 covering incentive-based comp upon certain accounting restatements, compliant with SEC/Nasdaq rules .
Equity Ownership & Alignment
| Item | Amount | Detail |
|---|---|---|
| Total beneficial ownership | 1,095,113 shares (3.2% of outstanding) | 33,191,622 shares outstanding at 3/27/2025 |
| Common shares held directly | 212,295 | — |
| Vested options (total) | 882,818 (sum of enumerated vested options) | 41 @ $13.80; 20,500 @ $3.24; 125,000 @ $4.60; 130,400 @ $8.80; 94,000 @ $43.47; 132,000 @ $33.43; 262,500 @ $19.03; 93,750 @ $3.37; 24,627 @ $2.48 |
| Unvested options (total) | 134,796 | 37,500 @ $19.03; 56,250 @ $3.37; 41,046 @ $2.48 |
| Pledging | No pledging disclosed in proxy | Company does not prohibit hedging; no pledging policy disclosed |
| Ownership guidelines | Not disclosed for directors/executives | — |
Vesting pressure and exercisability:
- Employment agreement provides that upon termination without cause or resignation for good reason, all outstanding equity and long-term awards become fully vested and remain exercisable through original term; same structure applies if termination occurs within 12 months post-change-in-control .
- The 2021 Plan provides single-trigger acceleration of equity upon change-in-control (awards vest at 100% of target; options/SARs immediately exercisable), which can be shareholder-unfriendly and increases event-driven incentives .
Employment Terms
| Term | Details |
|---|---|
| Employment start (COO) | Effective January 1, 2025 |
| At-will / Term | At-will; standard benefits; 20 days vacation; 5 sick days |
| Non-solicitation | 24 months post-termination; client diversion prohibition |
| Severance (no CIC) | 6 months of compensation (salary + target bonus) lump sum; 12 months health benefits; full vesting and options exercisable for remaining term |
| Severance (CIC double-trigger) | If terminated without cause or resigns for good reason within 12 months of CIC: 6 months compensation lump sum; 12 months health benefits; full vesting and options exercisable for remaining term |
| Arbitration | AAA, New York; FAA governed; company pays arbitration fees; fee-shifting if employee does not substantially prevail |
| Indemnification | Existing indemnification agreement (dated 8/5/2015) remains in effect |
| Tax provisions | Section 280G “cutback to safe harbor” (no gross-up); Section 409A compliance mechanics |
| Retention Compensation (Aug 27, 2024) | $1,500,000 structured: 25% lump sum (paid 9/1/2024); remaining 75% quarterly over years 2–4; immediate vesting/payment on CIC |
| Retention Payments Status | Suspended (as of Jan 2025) pending value-creation milestones; initial lump sums were paid in Sept 2024 |
Board Governance
- Committee roles/history: Paul Kelly previously chaired the Compensation Committee and served on the Audit Committee; effective January 1, 2023 he no longer serves on either committee .
- Current committees (2025): Audit (Chair: Fabiana Fedeli), Compensation (Chair: Charles J. Casamento), Corporate Governance & Nominating (Chair: John Glasspool); Paul Kelly is not listed on any committee .
- Independence: Independent directors identified are Casamento, Glasspool, and Fedeli; Paul Kelly is not independent (executive/consultant status) .
- Board leadership: Chair and CEO roles separated (Chair: Charles J. Casamento; CEO: Sergio Traversa) .
- Attendance: Board met 5 times in FY2024; all directors attended .
- Anti-hedging: Company does not currently prohibit hedging transactions by insiders (governance red flag) .
Director Compensation
| Component | Amount | Year/Notes |
|---|---|---|
| Quarterly cash retainer (non-management directors) | $17,655 per quarter (2024) | — |
| Chairman additional compensation | $67,089 (2024) | — |
| Committee fees (annual, 2025) | Audit: Chair $23,540; Member $10,593; Compensation: Chair $17,067; Member $8,239; Corporate Governance & Nominating: Chair $17,067; Member $8,239 | No increase vs 2024 |
| Director compensation (2024) | Paul Kelly: $70,620 fees; $802,160 “All Other Compensation”; total $872,780 (cash replacement for options not approved) | Footnote notes special advisor/consultant status |
| Director compensation (2023) | Paul Kelly: $66,000 fees; $140,275 option awards; $534,000 “All Other Compensation”; total $740,275 | — |
Compensation Structure Analysis
- Shift toward cash retention in 2024: Retention agreements were used to offset lack of equity grants; initial lump sums paid Sep 2024; suspension in 2025 suggests tightening of cash outflows amid strategic pivot .
- Pay-for-performance tightening: No FY2024 bonuses or FY2024 long-term awards for NEOs; no FY2025 salary increases, in response to 2024 negative say-on-pay .
- Equity acceleration: Plan-level single-trigger CIC acceleration and employment-level full vesting upon qualifying termination increase event-driven payout sensitivity (potentially shareholder-unfriendly) .
- Anti-hedging gap: Absence of a hedging prohibition may weaken alignment signals .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay received a negative vote; the company engaged investors, reviewed equity granting practices, enhanced disclosures, and curtailed cash/equity awards for FY2024 and FY2025 to address concerns .
Performance & Track Record
- Career achievements: Fortune All-Star Analyst recognition (2000); decades of sector experience across major banks and consulting .
- Company TSR (disclosed): $10.90 (2022), $12.91 (2023), $1.62 (2024), indicating significant drawdown in 2024 amid program pivots .
- Strategic execution: Company pivoted from esmethadone (REL-1017) after negative interim analysis; in-licensed NDV-01 (NMIBC) and acquired Sepranolone (PWS/TS/ET) to diversify risk and focus on mid-/late-stage assets .
Employment & Contracts (Retention Risk)
- Contract type: At-will; severance protections (6 months comp + 12 months health) with full vesting/exercisability upon qualifying termination; double-trigger cash severance on CIC .
- Restrictive covenants: Robust 24-month non-solicitation and client diversion restrictions .
- Arbitration/indemnification/tax: AAA arbitration (NY); indemnification preserved; Section 280G cutback; Section 409A compliant .
Equity Plan and Change-in-Control Mechanics
- Equity plans: 2014 Plan and 2021 Plan in effect; 2025 proposal to add 2.0M shares to the 2021 Plan (shareholder vote May 23, 2025) .
- CIC terms (plan-level): Single-trigger acceleration of options/SARs and 100% of target for performance awards; ability for the Board to cancel awards and pay value at CIC .
- Severance table (company-wide): Illustrative cash and retention payments for executives; demonstrates sizable cash outflows upon termination/CIC, though Paul Kelly’s specific severance summarized above .
Related Party Transactions & Red Flags
- Related party: No Paul Kelly-specific related party transactions disclosed; company summary includes historical licenses unrelated to Paul .
- Red flags: Anti-hedging absence; single-trigger equity acceleration at CIC; cash replacement of unapproved options; negative say-on-pay in 2024 .
Expertise & Qualifications
- Education and credentials: BA in Biochemistry (Brown); attended University of Rochester School of Medicine; MBA (Simon School); extensive biotech research and consulting background .
- Board service: Director since 2015; dual role as COO and Director (non-independent) .
Investment Implications
- Alignment: Material personal ownership (3.2%) and large vested option base suggest skin-in-the-game, but anti-hedging gap and single-trigger acceleration dilute alignment quality .
- Event-driven incentives: Plan-level single-trigger acceleration and employment-level full vesting/exercisability on termination/CIC increase sensitivity to corporate transactions; monitor governance around potential strategic alternatives .
- Cash discipline: Suspension of retention payments and elimination of FY2024 bonuses/awards indicate tightening; positive for cash runway but watch retention risks for key talent including COO .
- Governance: Dual role (COO + Director) reduces independence; with committee leadership held by independent directors, oversight seems functional, but absence of anti-hedging policy remains a notable gap .
- Strategy execution risk: 2024 TSR decline reflects pivot uncertainty; success of NDV-01 and Sepranolone programs will be key; compensation actions align pay with performance (no FY2024 variable comp), reducing inflation risk .