Gregory Sullivan

About Gregory Sullivan

Gregory Sullivan, MD, is Chief Medical Officer (since June 3, 2014) and Secretary (since March 2017) at Tonix Pharmaceuticals. He is 59 and previously served on Tonix’s Scientific Advisory Board (since October 2010). He holds a BA in Biology from UC Berkeley and an MD from Columbia University; he completed psychiatry residency and an NIMH-sponsored research fellowship at Columbia and has published 50+ articles on PTSD, stress, and anxiety disorders . Company performance context: three-year TSR fell sharply in 2024, and net income is negative, which frames pay-for-performance alignment discussions .

Company performance context (document-based)

Financial performance (S&P Global data)

Past Roles

External Roles

Fixed Compensation

• Current base salary set at $519,168 effective March 1, 2025 under employment agreement .
• No retirement plan, supplemental deferred compensation, or traditional pension benefits; no tax gross-ups .

Performance Compensation

Annual Cash Bonus

Equity Awards (Options)

• Some outstanding options have multi-year time-based tranches (e.g., 10% in 2023, 10% in 2024, 40% in 2025, 40% in 2026) .
• Company policy often grants annual options in February; certain awards are set at a 125% premium to grant-date closing price, reinforcing at‑risk equity alignment .
• No RSUs outstanding for named executive officers in 2024; no option exercises in 2024 .

Equity Ownership & Alignment

• Shares outstanding: 6,877,816 as of March 28, 2025 .
• Hedging and pledging prohibited for employees and directors under Insider Trading Policy; short sales and standardized options trading also prohibited .
• Stock ownership guidelines not disclosed in the proxy; no pledging reported .

Employment Terms

• Agreement Date/Role: Employment agreement dated June 3, 2014 to serve as Chief Medical Officer; initial 1‑year term with automatic 1‑year renewals unless notice given ≥60 days before term end .
• Base Salary: $519,168 as of March 1, 2025 per agreement .
• Severance (without Cause or for Good Reason): Lump sum equal to 12 months base salary; continuation of health benefits for 12 months; automatic acceleration of unvested stock awards that would have vested over the 12 months post‑termination .
• Death/Disability: Earned but unpaid base salary through end of month of termination .
• Definitions: “Cause” and “Good Reason” defined with standard triggers (fraud, felony, confidentiality breaches, gross negligence; material diminution of role/compensation, relocation, breach, non‑renewal) .
• Change-in-control: Company states no single‑trigger cash benefits or acceleration absent actual termination; severance terms rely on termination triggers (double‑trigger construct) .
• Limited perquisites; executives receive same benefits as non-executive salaried employees .

Compensation Structure Analysis

• Cash vs. Equity mix: 2024 compensation comprised salary ($499,200), cash bonus ($182,208), and option awards ($241,036) for total $922,444—equity remains a meaningful component, consistent with pay-for-performance .
• Option design: Premium strike options (e.g., 125% of market for certain grants) and time-based vesting with front-loaded and monthly schedules; some awards have stock-price goal vesting features, increasing at‑risk alignment .
• Governance safeguards: No retirement plans, no tax gross-ups, no single-trigger CIC cash benefits; timing policy avoids grants around MNPI disclosures .

Say‑on‑Pay & Shareholder Feedback

• 2022 advisory say‑on‑pay: Majority approval; Committee made no fundamental program changes; next say‑on‑pay vote at 2025 Annual Meeting .
• Frequency: Board recommends triennial (every three years) advisory vote frequency .

Risk Indicators & Red Flags

• Legal proceedings: Company discloses executives not involved in bankruptcy, criminal convictions, SEC/CTFC violations, SRO sanctions in past ten years .
• Related-party transactions: None in last two fiscal years; formal policy and committee oversight in place .
• Section 16 compliance: Company believes all executive and director filings were compliant in 2024 .
• Hedging/pledging: Prohibited—reduces alignment risk associated with collateralization or derivative hedging .
• Insider selling pressure: 2024 options began vesting 2/23/2025 and continue monthly for 24 months, creating incremental potential supply, but counts are modest (e.g., 224 total new options from 2024 grants) .

Investment Implications

• Alignment: Cash bonuses tied to equal weighting of Company and individual performance, plus premium‑strike options and staged vesting indicate meaningful at‑risk pay; prohibition on hedging/pledging supports shareholder alignment .
• Retention risk: Auto‑renewing contract with 12‑month salary severance and health benefits, plus 12‑month forward vest acceleration, offers moderate protection yet is not overly rich—balanced retention economics .
• Execution signal: Scientific depth (PTSD research, NIMH funding, >50 publications) suggests strong domain capability; however, negative net income and weak TSR in 2024 underscore execution and value-creation challenges for pipeline and commercialization .
• Trading signals: Monthly vesting from 2024 grants can add small, ongoing option conversion potential; no 2024 option exercises reported, and ownership remains <1%, limiting immediate selling pressure indications .
• Governance: No tax gross-ups, no single-trigger CIC cash acceleration, limited perquisites, and policies for grant timing around MNPI—generally shareholder‑friendly features .