Jack Khattar
SUPERNUS PHARMACEUTICALSAbout Jack Khattar
Founder of Supernus Pharmaceuticals and its President, CEO and Secretary since 2005; age 63 with more than 30 years in pharma commercialization and drug delivery; MBA (Wharton) and BBA (American University of Beirut) . Board director since 2005; only non‑independent director; Board chair role is separate (Chair: Charles Newhall), limiting dual‑role concentration risk . Performance context: multi‑year growth in gross product sales and positive net earnings, with cumulative TSR in 2024 at 152.45 on a $100 base (2019–2024) .
| Performance Metric | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Gross Product Sales ($MM) | 1,021 | 1,181 | 1,071 | 1,101 |
| Net Earnings ($MM) | 53.4 | 60.7 | 1.3 | 73.9 |
| Company TSR (Value of $100) | 122.93 | 150.38 | 122.01 | 152.45 |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Supernus Pharmaceuticals | Founder; President, CEO & Secretary; Director | 2005–present | Led strategy, commercialization and pipeline development in CNS; long‑tenured operator-founder |
| Shire Laboratories (subsidiary of Shire plc) | President & CEO; Board member | 1999–2005 | Led drug delivery business; member of Shire plc executive committee (1999–2004) |
| Shire plc | Executive Committee member | 1999–2004 | Corporate strategy and operations at the parent company level |
| CIMA Labs | Executive officer; Chairman of management committee; business development lead | ~1995–1999 | Corporate alliances, strategic planning; drug delivery expertise |
| Merck, Novartis, Playtex, Kodak | Marketing and business development roles | Pre‑1995 | Global commercial experience across US, Europe, Middle East |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| scPharmaceuticals (public) | Chairman of the Board | Current | Public company governance and commercialization oversight |
| Cognition Therapeutics (public) | Chairman of the Board | Current | Neurodegeneration focus aligns with CNS portfolio |
| Navitor Pharmaceuticals (private) | Director | Current | Development‑stage biotech exposure |
| New Rhein Healthcare | Advisory Board | Current | Private equity vantage point on healthcare investments |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 963,000 | 1,001,500 |
| Target Annual Bonus (% of base) | — | 75% |
| Actual Annual Bonus Paid ($) | 830,588 (paid early 2024 for 2023) | 826,254 (paid early 2025 for 2024) |
Notes:
- 2024 Corporate Objectives achievement certified at 110%, driving CEO bonus outcome .
- Say‑on‑pay support in 2024 exceeded 95%, indicating strong shareholder alignment with program design .
Performance Compensation
Annual Incentive (Cash)
| Metric | Weighting | Target | Actual | Payout |
|---|---|---|---|---|
| Aggregate Corporate Objectives (financial + pipeline) | 100% (CEO) | 75% of base = $751,125 | Achievement 110% of objectives | $826,254 |
Key 2024 Corporate Objectives included: FDA approval and launch for SPN‑830; SPN‑812 filings/study milestones; SPN‑817 Phase 2a topline and Phase 2b initiation; SPN‑820/821 Phase 2 progression and manufacturing; SPN‑840 sNDA requirements; specified gross/net revenue and adjusted EBITDA targets; new discovery program IND and manufacturing goals .
Long‑Term Incentives (Equity)
| Award Type | Grant Date | Size | Exercise/Price | Vesting |
|---|---|---|---|---|
| Stock Options | 2/22/2024 | 322,000 | $27.94 | 25% per year over 4 years, service‑based |
| Performance Share Units (PSUs) | 6/24/2024 | 193,200 | — | Vest upon achievement of specific objectives within defined windows (≤10 years) |
PSU performance objectives for CEO (established 6/24/2024) include: exceeding combined 2024–2025 non‑GAAP operating earnings or net product sales guidance by a specified percentage; timely FDA approval for SPN‑830; discovery platform “hit” by Dec‑2025; new patent filing by 2027; execution of a 2025 corporate development transaction; positive Phase II data on SPN‑820 within specified period .
Equity grant timing policy: annual grants in late Feb/early Mar to align with performance cycle; options priced at same‑day close; policy to avoid opportunistic timing; “spring‑loading” disclosure shows only ~1% price change around disclosures for 2/22/2024 options .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 4,033,533 shares; 7.0% of outstanding as of 4/22/2025 |
| Ownership Breakdown | Includes 1,005,600 shares held by KBT Trust and 2,019,250 options exercisable within 60 days (as of 4/22/2025) |
| Options Exercised (FY2024) | 250,000 options exercised; value realized $6,837,950 |
| Selected Outstanding Option Tranches (12/31/2024) | 150,000 exercisable / 50,000 unexercisable @ $29.61 exp. 2/19/2031; 125,000/125,000 @ $32.20 exp. 2/22/2032; 70,000/210,000 @ $38.60 exp. 2/23/2033; 0/322,000 @ $27.94 exp. 2/22/2034 |
| Outstanding PSUs (12/31/2024) | Unearned award counts include tranches of 20,000; 25,000; 35,000; and 154,560 with stated market values per table |
| Ownership Guidelines | CEO required to hold 3x base salary within 5 years (policy adopted 2020) |
| Hedging/Pledging | Hedging prohibited; pledging and margin accounts prohibited |
| 10b5‑1 / Trading Controls | Blackout windows; pre‑clearance required; Rule 10b5‑1 plans subject to CFO approval and cooling‑off periods |
Employment Terms
| Provision | Terms |
|---|---|
| Employment | At‑will; original agreement 12/22/2005; amended 2012, 2014, 2016, 2018, 2023 |
| Severance (no change in control) | If terminated without cause or resigns for good reason: 18 months base salary; last annual bonus paid over 18 months; 18 months benefits continuation; non‑compete and non‑solicit at least 1 year |
| Change‑of‑Control | Upon termination following a change in control, all stock‑based awards fully vest and remain exercisable per plan terms (double‑trigger equity acceleration); cash severance economics mirror standard severance per 12/31/2024 illustration |
| 12/31/2024 Estimated Cash Benefits | Base salary continuation $1,502,250; bonus $830,588; benefits $29,020 (same amounts shown across scenarios in table) |
| Clawback | Dodd‑Frank compliant policy; mandatory recovery after restatement; discretionary for fraud/intentional misconduct/gross negligence; applies to cash and equity |
| Anti‑repricing | No stock option repricing without shareholder approval |
| Deferred Comp | Legacy SERP for CEO (no new Company contributions) |
Board Governance (Director Service, Roles, Independence)
- Director since 2005; Class I nominee in 2025; serves as President, CEO & Secretary and Director .
- Board leadership separated: CEO (Khattar) and independent Chairman (Newhall); only Khattar is non‑independent .
- Committees fully independent; CEO not listed on Audit, Compensation, Governance & Nominating, or Science Committees .
- Attendance: all directors except Ms. Sensenig attended ≥75% of 2024 board/committee meetings; Khattar attended the 2024 annual meeting .
- Employee director receives no additional director compensation .
Compensation Structure Analysis
- Cash vs Equity Mix: Significant equity weighting via large options (322k) and PSUs (193.2k) in 2024; aligns upside with performance and stock appreciation .
- Performance Metrics: CEO annual bonus solely tied to Corporate Objectives (financial and pipeline), with 2024 achievement at 110%; PSUs further hard‑wire multi‑year operating, regulatory, discovery, BD, and clinical milestones .
- Peer Benchmarking: Program calibrated vs selected commercial biopharma peers; in 2024 Company at 51st percentile revenue, 39th market cap, 67th 1‑yr TSR, 61st headcount among peers .
- Governance Features: Robust clawback, anti‑hedging/pledging, consistent grant timing, and anti‑repricing policy; 2024 say‑on‑pay support >95% .
Related Party and Risk Indicators
- Related Party: Employment of CEO’s adult daughter (Associate Director, Marketing); 2024 total comp $182,616; approved and reviewed under related‑party policy .
- Section 16 Compliance: One late Form 4 filing for Mr. Khattar in 2024 (and one for Dr. Bhatt) .
- Prohibited Practices: Hedging and pledging prohibited; margin accounts prohibited; strict pre‑clearance and 10b5‑1 plan controls .
- Say‑on‑Pay: >95% approval in 2024, indicating low pay‑program controversy .
Director Compensation (Context)
- Non‑employee director program uses cash retainers plus equity (options and RSUs); employee director (Khattar) receives no separate board pay .
Equity Award and Ownership Tables (Additional Detail)
Selected outstanding CEO equity awards as of Dec 31, 2024:
| Grant | Exercisable | Unexercisable | Exercise Price | Expiration |
|---|---|---|---|---|
| 2/19/2031 tranche | 150,000 | 50,000 | $29.61 | 2/19/2031 |
| 2/22/2032 tranche | 125,000 | 125,000 | $32.20 | 2/22/2032 |
| 2/23/2033 tranche | 70,000 | 210,000 | $38.60 | 2/23/2033 |
| 2/22/2034 tranche | — | 322,000 | $27.94 | 2/22/2034 |
Unearned PSUs as of Dec 31, 2024 (select counts and values per proxy table):
| Tranche | Unearned Units | Market/Payout Value |
|---|---|---|
| PSU Tranche A | 20,000 | $723,200 |
| PSU Tranche B | 25,000 | $904,000 |
| PSU Tranche C | 35,000 | $1,265,600 |
| PSU Tranche D | 154,560 | $5,588,890 |
Investment Implications
- Alignment: High insider ownership (7.0%) and significant unexercised/PSU exposure tie CEO wealth to multi‑year operating, regulatory, discovery and BD outcomes; hedging/pledging prohibitions and ownership guidelines further reinforce alignment .
- Incentive Intensity: 2024 corporate achievement at 110% and large 2024 PSU grant increase the emphasis on execution of SPN‑830 approval/launch, SPN‑820 Phase II data, discovery milestones, and revenue/earnings outperformance into 2025; favorable for near‑ to mid‑term operational drive .
- Retention/Transition Risk: Cash severance (18 months salary + last bonus) is moderate; double‑trigger equity acceleration at CoC preserves award value, but no elevated cash multiple on CoC; non‑compete one year reduces near‑term competitive risk if departure occurs .
- Governance Watch‑items: Late Form 4 filing and employment of a family member are minor governance flags, albeit disclosed and overseen; Board leadership split and committee independence mitigate dual‑role concerns .
- Performance Lens: Gross product sales grew from $1,021MM (2021) to $1,101MM (2024) with positive 2024 net earnings ($73.9MM); TSR recovered in 2024 (152.45) after 2023 dip, aligning realized pay with performance frameworks .