Ramy Farid
About Ramy Farid
Ramy Farid, Ph.D. (age 60), has served as President since January 2008, CEO since January 2017, and director since December 2012; prior roles include SVP (2005–2007), VP Scientific Development & Product Management (2003–2004), and Product Manager (2002). He holds a B.S. in Chemistry (University of Rochester) and a Ph.D. (Caltech), with an NIH postdoc at the University of Pennsylvania; he currently serves on Vir Biotechnology’s board and previously on Structure Therapeutics’ board (Apr 2019–Jun 2024) . Pay-versus-performance data show 2024 TSR value of $60.43 on an initial $100 (vs peer $117.30), revenue of $207.5M, and net loss of $187.1M; CEO “compensation actually paid” was $0.67M in 2024 amid a program heavily linked to equity value . Say‑on‑pay support was strong at >98% in 2024, indicating broad shareholder alignment with compensation design .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Schrödinger | President | 2008–present | Overall P&L leadership and strategy execution across software and therapeutics |
| Schrödinger | CEO | 2017–present | Drove platform strategy, capital allocation, equity-linked incentives |
| Schrödinger | SVP | 2005–2007 | Senior leadership during growth stage pre-IPO |
| Schrödinger | VP, Scientific Dev. & Product Mgmt. | 2003–2004 | Advanced product roadmap and commercialization |
| Schrödinger | Product Manager | 2002 | Early commercialization and product-market fit |
| Rutgers University | Assistant Professor, Chemistry | Pre-2002 | Academic research and industry know-how relevant to SDGR’s platform |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Vir Biotechnology, Inc. (public) | Director | Current | Public biotech board service |
| Structure Therapeutics, Inc. (public) | Director | 2019–Jun 2024 | Public biopharma board service |
| Multiple SDGR co‑founded biotech companies | Director | Various | Portfolio governance and information flow oversight |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 | 2025 Plan |
|---|---|---|---|---|
| Base Salary ($) | 651,000 | 677,000 | 704,080 | 730,000 (3.7% increase) |
| Target Cash Incentive (% of Base) | N/A | N/A | 65% | 85% (raised 20 pts) |
| Non‑Equity Incentive Paid ($) | 374,976 | 365,580 | 526,300 (115% of target) | |
| Option Awards Grant‑Date Fair Value ($) | 2,877,355 | 2,067,787 | 3,162,113 | N/A |
Notes:
- 2024 base salary was raised 4% to $704,080 based on role criticality and performance; broader NEO increases ranged 4%–12.2% .
- 2024 annual cash incentive program paid at 115% of target based on company performance .
Performance Compensation
Annual Incentive (2024)
| Metric | Weight (Target) | Weight (Stretch) | Achievement | Weighted Performance |
|---|---|---|---|---|
| Software revenue growth vs 2023 | 50.0% | 8.0% | 100% | 50.0% |
| Drug discovery revenue | 3.0% | N/A | Below target | — |
| Reduce annual increase in operating expenses | 5.0% | 5.0% | 100%/100% | 10.0% |
| Generate data to support SGR‑1505 and SGR‑2921 development | 24.0% | N/A | 112.5% | 27.0% |
| Initiate Phase 1 for SGR‑3515 | 9.0% | N/A | 100% | 9.0% |
| Early discovery goals | 4.0% | 2.0% | 100% | 4.0% |
| External business initiatives and goals | 5.0% | 10.0% | 100%/100% | 15.0% |
| Total Corporate Achievement | 100% | 25% | — | 115% (overall) |
- CEO 2024 target bonus = 65% of base ($457,652 target); payout = $526,300 (115%) .
- 2025 target cash incentive increased to 85% to align with peers; goals set similarly to 2024 .
Long‑Term Equity (Grants, Vesting, Metrics)
| Year | Instrument | Size/Terms | Vesting | Notes |
|---|---|---|---|---|
| 2024 | Options | 126,000 @ $25.24; 87,271 premium‑priced @ $27.76 | 25% on 3/4/2025; then 2.0833% monthly through 3/4/2028 | Premium‑priced options align outcomes with appreciation |
| 2024 | PRSUs | 35,000 target (50%–150% payout) | Performance period through 12/31/2025; vests post 10‑K filing for FY2026 upon certification | Metrics: software performance, therapeutics performance, operating performance |
| 2023 | PRSUs | Target 22,800 (max 34,200) outstanding | Performance period ongoing; not yet certified as of 12/31/2024 | Three evenly weighted financial, business, and software metrics |
| 2025 | Options | 150,000 total: 60,000 @ $21.24; 90,000 premium‑priced @ $23.36 (110% of close) | 25% at 1‑yr; then monthly 2.0833% | At least 50% of LTI value in PRSUs+premium options for CEO |
| 2025 | RSUs | 37,500 | Equal annual installments over 4 years | Service‑based retention |
| 2025 | PRSUs | 37,500 target | Performance‑based; details per program | Continued focus on pay‑for‑performance |
Additional notes:
- For disclosure accounting, 2024 PRSUs had $0 grant‑date fair value as performance was not probable at grant; max grant‑date values if highest performance achieved would have been $1.33M for CEO in 2024 .
- Equity is predominantly at‑risk; 84% of CEO 2024 target mix at‑risk; 72% long‑term (primarily options) .
Equity Ownership & Alignment
Beneficial Ownership (as of Apr 1, 2025)
| Holder | Common Shares | Options Exercisable ≤60 Days | Total Beneficial | % of Common |
|---|---|---|---|---|
| Ramy Farid | 184,432 | 1,862,777 | 2,047,209 | 3.2% (of 64,179,002 common OS) |
- Shares outstanding: 64,179,002 common and 9,164,193 limited common; Farid holds no limited common .
- Ownership guidelines: CEO must hold equity equal to 3x base salary; as of Apr 21, 2025, all directors and execs except certain recent appointees met guidelines—implying Farid is in compliance .
- Anti‑hedging and pledging: Short sales and hedging are prohibited; pledging is generally prohibited with rare exceptions; no pledges by Farid (only Dr. Friesner pledged shares; reviewed by Audit Committee) .
- Rule 10b5‑1 plans: Officers/directors may utilize plans; trades execute under preset parameters .
Key Outstanding Equity Awards (12/31/2024)
| Grant | Exercisable | Unexercisable | Exercise Price | Expiration | Vesting Footnotes |
|---|---|---|---|---|---|
| Stock option | 160,527 | — | $3.07 | 5/10/2026 | Fully vested |
| Stock option | 334,432 | — | $4.34 | 11/29/2028 | Fully vested |
| Stock option | 896,280 | — | $17.00 | 2/5/2030 | Fully vested |
| Stock option | 143,750 | 6,250 | $102.48 | 2/27/2031 | 25% on 2/27/2022; monthly to 2/27/2025 |
| Stock option | 152,291 | 62,709 | $27.76 | 2/9/2032 | 25% on 2/9/2023; monthly to 2/9/2026 |
| Stock option | 38,940 | 46,020 | $23.29 | 2/9/2033 | 25% on 2/9/2024; monthly to 2/9/2027 |
| Stock option | 30,032 | 35,493 | $25.62 | 2/9/2033 | 25% on 2/9/2024; monthly to 2/9/2027 |
| Stock option | — | 126,000 | $25.24 | 3/4/2034 | 25% on 3/4/2025; monthly to 3/4/2028 |
| Stock option (premium) | — | 87,271 | $27.76 | 3/4/2034 | 25% on 3/4/2025; monthly to 3/4/2028 |
| PRSUs (2023 cycle) | — | — | — | — | Threshold 11,400 shown; target 22,800; max 34,200; performance ongoing |
| PRSUs (2024 cycle) | — | — | — | — | Threshold 17,500; target 35,000; max 52,500; performance through 12/31/2025 |
Implications:
- Substantial monthly‑vesting equity through 2028 can create ongoing supply from vesting and potential exercises, often executed via 10b5‑1 plans to manage insider trading windows .
Employment Terms
- At‑will employment (agreement dated May 11, 2010). If terminated immediately without 30 days’ notice, continuation of base salary and benefits for 30 days; current base salary $730,000 .
- Severance Plan:
- Non‑CIC without cause: 12 months base salary and up to 12 months COBRA contributions (CEO); no bonus multiple .
- CIC (within 12 months): Double‑trigger; lump sum 150% of base salary and 150% of target bonus; up to 18 months COBRA; time‑based unvested equity vests on termination; no tax gross‑ups (cut‑back vs full payment best‑net) .
- Illustrative CEO amounts (as of 12/31/2024): CIC termination—Severance $1,056,120; Bonus $686,478; COBRA $15,647; Non‑CIC termination—$704,080 salary; $10,431 COBRA; equity acceleration value for CEO not quantified in table (dashes shown) .
- Clawback: Adopted Oct 2, 2023; recovers erroneously awarded incentive compensation upon restatement; misconduct/fraud may trigger broader recovery beyond incentive pay .
Board Governance (Director‑Specific)
- Class I director; term through 2027; not independent due to CEO role .
- Board separates Chair and CEO; Chair is independent; thus no Lead Independent Director is designated .
- Committee memberships: CEO Farid is not listed on Audit, Compensation, or Nominating & Corporate Governance committees; those committees are fully independent .
- Director election support: ~81% votes cast supported Farid’s election at the 2024 annual meeting .
- Director pay: As an employee director, Farid receives no additional director compensation .
- Ownership guidelines for directors: 3x annual cash retainer; compliance broadly achieved by incumbents .
Performance & Track Record
| Year | TSR (Start $100) | Revenue ($000s) | Net Income (Loss) ($000s) | CEO “Comp Actually Paid” ($) |
|---|---|---|---|---|
| 2020 | 248.06 | 108,095 | (26,637) | 72,690,646 |
| 2021 | 109.12 | 137,931 | (101,219) | (21,063,411) |
| 2022 | 58.55 | 180,955 | (149,189) | (3,046,539) |
| 2023 | 112.16 | 216,666 | 40,720 | 9,660,192 |
| 2024 | 60.43 | 207,539 | (187,123) | 667,050 |
- 2024 goal attainment reflected strong software revenue performance and OPEX control, and drug program execution (SGR‑1505, SGR‑2921, SGR‑3515 milestones), driving cash bonus at 115% of target .
- Compensation design emphasizes at‑risk equity (including premium‑priced options and PRSUs), linking realized pay to TSR; 2024 say‑on‑pay support exceeded 98% .
Compensation Design, Peer Benchmarking, and Shareholder Feedback
- Independent consultant: Aon advises the Compensation Committee (no conflicts) .
- Peer groups include life sciences and software peers (e.g., 10x Genomics, BridgeBio, Recursion, Certara, Zuora) with size and revenue filters; target pay typically near 50th percentile .
- Program features and guardrails: no hedging, no option repricing, no SERP, no CIC tax gross‑ups; clawback policy in force; double‑trigger CIC; ownership guidelines for execs and directors .
- 2024/2025 adjustments emphasized broader PRSU usage across executives and continued premium‑priced CEO options following investor feedback; 2025 CEO target cash incentive raised to market .
Equity Ownership & Alignment Signals
- Alignment: Majority of CEO’s economic exposure via options/PRSUs; 84% of target mix at‑risk in 2024 .
- Pledging/Hedging: Prohibited (with limited, pre‑approved pledge exceptions; none for Farid) .
- Ownership guideline compliance: CEO meets 3x salary requirement as of April 2025 measurement .
Employment Terms (Additional)
- No automatic salary increases or guaranteed equity grants; base reviewed annually against peers and performance .
- Benefits/perquisites: No executive perquisites; broad‑based benefits and 401(k) matching apply .
Investment Implications
- Pay-for-performance architecture is strong: premium‑priced options and PRSUs amplify sensitivity to TSR and operating execution; cash bonus payouts (115% in 2024) reflect measured over‑achievement against pre‑set corporate goals .
- Retention risk appears manageable: material unvested equity vests monthly through 2028; double‑trigger CIC with 1.5x salary and target bonus provides some deal protection without single‑trigger acceleration; no gross‑ups .
- Governance offsets to dual role: Farid is an inside director but not Chair; board committees are independent; strong shareholder support for say-on-pay and adequate director vote support in 2024 .
- Trading supply watchlist: significant option holdings, including premium‑priced and time‑based options with monthly vesting, may lead to periodic 10b5‑1 selling as awards vest or approach expiration (notably 2026–2034 ladders) .
- Alignment: Ownership guidelines met; hedging/pledging restrictions and clawback limit misalignment and risk-taking; multi‑metric PRSUs (software, therapeutics, operating) tie leadership incentives to both platform and pipeline outcomes .