John Sheridan

About John Sheridan

John Sheridan, 69, is President and Chief Executive Officer of Tandem Diabetes Care and has served on the Board since June 2019; he became CEO in March 2019, following his tenure as EVP & COO since April 2013. He holds a B.S. in Chemistry (University of West Florida) and an MBA (Boston University) . Under his leadership, Tandem reported record 2024 sales of over $940 million, positive free cash flow, ~7% growth in the in-warranty installed base to ~480,000, and FDA clearance for Control-IQ+ for type 2 diabetes in early 2025, highlighting operational execution and pipeline progress . Shareholder support for pay practices remains strong (95.42% 2024 say‑on‑pay), and long-term incentives increasingly emphasize performance via gross margin and relative TSR metrics .

Past Roles

External Roles

Fixed Compensation

Multi-year summary compensation (CEO):

2024 base salary and target bonus:

Notes:

• 2024 salaries for NEOs increased 3% after no 2023 increases; CEO base moved to $732,021 in 2024 .

Performance Compensation

Short‑term (2024 Cash Bonus Plan) structure and results:

CEO 2024 bonus paid: $650,021 .

Long‑term incentives (2024 grants to CEO):

PSU performance curves:

• Gross margin (FY2026): Threshold 50% payout; Target 100%; Max 200% (linear interpolation) .
• Relative TSR vs Russell 3000 (2024–2026): 25th percentile=50%; 50th=100%; 75th=200% (linear interpolation) .

Program governance and recent changes:

• PSU weighting increased and TSR metric included; 2025 increases TSR weighting further; overall benchmarking shifted to 50th percentile beginning 2025; say‑on‑pay support 95.42% in 2024 .

Equity Ownership & Alignment

Beneficial ownership and outstanding awards (as of March 14, 2025 unless noted):

Additional context:

• As of 12/31/2024, all unvested stock options had exercise prices above the $36.02 year‑end close (i.e., unvested options were out‑of‑the‑money) .
• RSU vesting cadence (33% at 12 months, remainder quarterly) creates predictable ongoing vesting that can influence selling windows; PSU releases contingent on 2026 performance with release in 2027 .

Employment Terms

Severance framework (double‑trigger; change in control within 3 months before or 12 months after + involuntary termination or resignation for good reason):

• CEO receives 24 months of base salary at time of termination plus target bonus for the year of termination; full vesting of unvested options, RSUs and SARs; company repurchase rights lapse; other NEOs receive 18 months .
• No guaranteed employment terms beyond offer letters; no fixed-term employment agreements .

Potential payouts if termination occurred on 12/31/2024 in CIC scenario:

Notes:

• Accelerated equity values based on $36.02 closing price on 12/31/2024; unvested options had exercise prices above this level .

Clawback and other safeguards:

• Clawback policy (amended Oct 2, 2023) compliant with SEC/Nasdaq rules; enables recoupment of incentive comp and trading profits tied to restatements and misconduct .
• No excise tax gross‑ups; no hedging/pledging; no option repricing; double‑trigger CIC standard .

Board Governance

• Board service: Director since 2019; currently serves as CEO and director (employee; not independent) .
• Committee roles: None; CEO does not sit on Audit, Compensation, or N&CG committees (committee rosters exclude Sheridan) .
• Leadership structure: Independent Chair (Rebecca Robertson) separate from CEO; supports independent oversight and mitigates dual‑role concerns .
• Meeting attendance: Board met six times in 2024; each director attended 100% of Board meetings and at least 75% of their committees .
• Executive sessions: Independent directors meet in regular executive sessions (no employees present) .
• Independence: All directors except Sheridan determined independent under SEC/Nasdaq rules .

Performance & Track Record

• 2024 performance highlights: Record sales >$940M; positive free cash flow; ~7% installed base growth to ~480,000; U.S. launches for Tandem Mobi (Dexcom G6/G7); FDA clearance for Control‑IQ+ for type 2 in early 2025; pharmacy agreements covering ~20% of U.S. lives for Mobi .
• Operating initiatives: Progress toward profitability, operational efficiencies, convertible notes financing ($316M) to manage capital structure .

Compensation Structure Analysis

• Cash vs equity mix: Emphasis on at‑risk pay—STIP paid at 89.5% of target reflecting 86.9% revenue outcome; LTI delivered via RSUs and PSUs with 0–200% payout potential tied to gross margin and relative TSR .
• Shift to performance equity: Increased PSU weighting and TSR weighting (and further increase in 2025) signal stronger linkage to shareholder returns; benchmarking moved from 60th to 50th percentile beginning 2025 after investor feedback .
• Governance: No single‑trigger CIC cash severance or automatic vesting; clawback; no hedging/pledging; no option repricing; stock ownership guidelines .

Related‑Party Transactions and Red Flags

• CEO–CFO relationship: Sheridan (CEO) and Vosseller (CFO) are in a personal relationship; Board/Audit Committee implemented additional internal controls; compensation decisions for each are set by the Compensation Committee; disclosed as a related‑party consideration .
• Legal proceedings: None requiring disclosure for directors or executive officers .

Compensation Peer Group (for benchmarking)

• 2024 peer group included: AngioDynamics, Artivion, AtriCure, CONMED, Dexcom, Glaukos, Globus Medical, Haemonetics, ICU Medical, Inogen, Inspire Medical Systems, Insulet, iRhythm Technologies, LivaNova, Masimo, Nevro, QuidelOrtho, STAAR Surgical (peer use solely for comp comparisons) .

Say‑on‑Pay & Shareholder Feedback

• 2024 say‑on‑pay support: 95.42% approval; 2025 “say‑on‑frequency” recommended annually .
• Responsive changes: Greater PSU/TSR weighting and benchmarking shift to median reflect investor input .

Equity Grant and Vesting Detail (CEO)

• RSU vesting: 33% at 12 months; remaining 67% quarterly over next 24 months for 2022–2024 grants; 2021 grants vest over 48 months (25% at 12 months, then quarterly) .
• PSU timing: 2024 PSUs measured at end of 2026 and released in 2027; 2023 PSUs measured 12/31/2025; 2021–2022 PSUs measured 12/31/2024 and earned/released in 2025 .

Employment & Contracts

• No fixed‑term employment agreements; severance agreements in place for senior management as described above; benefits may terminate for confidentiality or competitive breaches .

Investment Implications

• Alignment and performance sensitivity: 2024 STIP paid below target (89.5%) on sub‑target revenue (86.9%), while LTI emphasizes FY2026 gross margin and relative TSR with up to 200% upside, increasing management’s leverage to multi‑year operating and share performance .
• Retention vs selling pressure: CEO has significant unvested RSUs/PSUs with near‑term 33% cliffs and quarterly vesting thereafter and multi‑year PSU measurement, supporting retention; unvested options were OTM at 12/31/2024, reducing forced exercise/selling pressure from those tranches .
• Governance risk monitor: The disclosed CEO–CFO relationship is mitigated by committee oversight and additional controls but warrants continued monitoring by investors; robust clawback, ownership guidelines (now compliant), and no hedging/pledging policies mitigate alignment and reputational risks .
• Change‑in‑control economics: Double‑trigger with 24 months of salary+target bonus for CEO and full equity acceleration create meaningful transaction incentives; at 12/31/2024, potential accelerated RSUs of ~$10.3M plus cash severance of ~$2.93M highlight event‑driven payout sensitivity .
• Shareholder sentiment and pay calibration: High say‑on‑pay support (95.42%) and peer benchmarking shift toward median suggest reduced pay inflation risk and responsiveness to investors, while TSR weighting increases heighten external performance accountability .