Seth Lederman
Tonix Pharmaceuticals HoldingAbout Seth Lederman
Seth Lederman, MD, age 67, is President, CEO, and Chairman of Tonix Pharmaceuticals (TNXP), roles he has held since October 2011. He holds a BA in Chemistry from Princeton (1979) and an MD from Columbia (1983), previously serving as an Associate Professor at Columbia (1996–2017) and is an inventor on key Tonix IP, including TNX-102 SL’s eutectic composition and TNX-1500 (anti-CD154) . Pay-versus-performance disclosures show cumulative TSR deterioration (value of a $100 investment: $3.41 in 2022; $0.56 in 2023; $0.01 in 2024) alongside net losses of $(110)M, $(117)M, and $(130)M, respectively . As CEO/Chairman, he leads into a key regulatory catalyst: FDA PDUFA for TNX-102 SL (fibromyalgia) due August 15, 2025 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Columbia University | Associate/Assistant Professor | 1996–2017 | Discovered/characterized CD40-ligand (CD154); foundational IP for TNX-1500 |
| L&L Technologies LLC | Manager | 1996–Mar 2025 | Biopharma investing/consulting platform |
| Lederman & Co., LLC | Managing Member | 2002–Mar 2025 | Biopharma investing; indirect share ownership noted in TNXP beneficial table |
| Konanda Pharma entities | Managing Partner/Director | 2007–2008 | Private growth equity; chaired Validus & Fontus (portfolio companies) |
| Leder Laboratories Inc. / Starling Pharmaceuticals Inc. | CEO/Chairman | Since 2011 | Biopharmaceutical development leadership |
| Targent Pharmaceuticals (LLC/Inc.) | Managing Member/Director | Since 2000 / 2001–2006 | Founded/co-led; assets sold to Spectrum Pharmaceuticals in 2006 |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Research Corporation (NY non-profit) | Director | 2006–2011 | Board service at research-focused non-profit |
| US–Japan Business Council | Member | 2015 | Cross-border policy/business engagement |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 675,000 | 675,000 |
| Target Bonus % | Not disclosed | Not disclosed |
| Actual Bonus Paid ($) | — | 417,656 |
| Other Cash (Perqs, Pension, DC) | None disclosed; no retirement benefits; limited personal benefits | None disclosed; no retirement benefits; limited personal benefits |
Notes:
- No tax gross-ups; no single-trigger cash CIC benefits .
- Compensation consultant Aon engaged by independent Compensation Committee; no management conflicts .
Performance Compensation
| Award/Metric | Grant Date | Structure | Target/Price | Actual/Payout | Vesting |
|---|---|---|---|---|---|
| Stock Options (time-based) | 2/27/2024 | Options | 410 sh @ $1,177.60; 74 sh @ $1,177.60; 595 sh @ $1,472.00 (125% of grant-date close) | N/A | 410-sh grant vests 100% 6 months post-issue, in lieu of cash bonus ; 74/595-sh grants: 1/3 on 2/23/2025, then monthly over 24 months |
| Stock Options (price-vest) | Various (prior grants) | Price-vested options | Vest 1/3 at each 20-day avg close ≥ $3.84B, $4.48B, $5.12B (split-adjusted) | Not disclosed | Subject to 1-yr minimum service; then vest upon price milestones |
Additional details:
- Company indicates emphasis on pay-for-performance and pre-specified corporate/strategic goals; detailed annual bonus metrics not disclosed .
- Option awards commonly set at/above market; some grants at 125% of grant-date close .
- No options were exercised by NEOs in 2024 .
Multi-Year Compensation (CEO)
| Component ($) | 2023 | 2024 |
|---|---|---|
| Salary | 675,000 | 675,000 |
| Bonus | — | 417,656 |
| Option Awards (Grant-Date FV) | 1,375,065 | 717,111 |
| Total | 2,050,065 | 1,809,767 |
Pay vs performance (Reg S-K 402(v) “Compensation Actually Paid” and Company results):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| CEO “Compensation Actually Paid” ($) | (711,460) | 647,036 | 1,055,851 |
| Value of $100 Investment (TSR, $) | 3.41 | 0.56 | 0.01 |
| Net Income ($ Millions) | (110) | (117) | (130) |
Say-on-Pay: Majority approval in 2022; next advisory vote at 2025 annual meeting .
Equity Ownership & Alignment
| Holder | Shares Beneficially Owned | % of Outstanding | Breakdown |
|---|---|---|---|
| Seth Lederman | 793 | <1% (of 6,877,816 sh) | Includes 786 options exercisable within 60 days, 1 sh via Lederman & Co., and 1 sh via IRA |
- Company prohibits hedging and pledging of Tonix stock for all employees/directors (mitigates misalignment/forced selling risk) .
- Stock ownership guidelines (requirement or status): Not disclosed.
- Outstanding equity awards include multiple option tranches with time- and price-based vesting; see Outstanding Equity Awards table for full strike/tenor (reverse-split adjusted) .
Employment Terms
| Term | Key Provision |
|---|---|
| Agreement | Employment agreement dated Feb 11, 2014; initial 1-year term; auto-renews annually unless notice 60 days prior . |
| Current Base Salary | $702,000 as of March 1, 2025 . |
| Termination Without Cause / Good Reason | Lump sum 12 months’ base salary; 12 months COBRA; 12 months acceleration of unvested equity (as would have vested over next 12 months); plus accrued comp/benefits . |
| Death/Disability | Lump sum 6 months’ base salary; acceleration of unvested equity; plus accrued comp . |
| Change in Control (CIC) – Double Trigger | If within 90 days before or 12 months after a CIC, and terminated without Cause/for Good Reason: lump sum 36 months’ salary (18 months if concurrently entitled to Sale Bonus); 24 months COBRA (12 months if Sale Bonus applies); full acceleration of unvested equity . |
| Sale Bonus | If CIC enterprise value ≥ $50M during term or within 120 days post qualifying termination: 4.4% of enterprise value; terminates upon Board providing mutually agreed LTIP . |
| Definitions | Cause/Good Reason and CIC defined in agreement (e.g., >40% voting power change, asset sale, board turnover) . |
| Clawback | Not disclosed in proxy. |
Implications:
- CIC economics (36x months salary or 18x with Sale Bonus; plus 4.4% EV) are materially above small-cap norms; potential overhang in sale scenarios .
- No single-trigger cash benefits; acceleration requires termination (double-trigger), aligned with governance best practices .
Board Governance
- Roles: CEO also serves as Chairman; Board maintains a Lead Independent Director (James Treco) with defined authorities (independent sessions, agenda/schedule input, shareholder communication) to mitigate dual-role risks .
- Independence: Lederman is not independent; all other directors are independent under Nasdaq rules .
- Committees and Chairs: Audit (Chair: Treco), Compensation (Chair: Margaret Smith Bell), Nominating & Corporate Governance (Chair: Richard Bagger) .
- Meetings and Attendance (FY 2024): Board 11; Audit 10; Compensation 6; Nominating & Governance 4; each director attended ≥75% of Board/committee meetings; Lederman was the only director to attend last annual meeting .
- Director Compensation: Annual cash retainer $55,000 (Lead Director $75,000) plus options valued at ~$16,499 at grant; directors outstanding options ~33 each as of Dec 31, 2024 .
Related-Party Transactions and Policies
- Related-party transaction policy in place; no related party transactions in last two fiscal years .
- Insider Trading Policy prohibits hedging, pledging, short sales, and standardized options trading in Tonix stock .
- Repricing of options is prohibited without shareholder approval .
Performance & Track Record
- Pipeline execution: approaching PDUFA (Aug 15, 2025) for TNX-102 SL (fibromyalgia) after two positive Phase 3 studies; FDA Fast Track; CEO commentary underscores readiness to commercialize .
- Financial performance headwinds: Net losses remained large over 2022–2024; TSR declined sharply through 2024 per pay-versus-performance disclosure .
- Governance signals: Reverse stock split authority sought (1:2 to 1:250) and equity plan share increase (+1,000,000) to support capitalization and talent retention .
Investment Implications
- Alignment: High equity component and price-vesting options tie upside to shareholder returns; hedging/pledging prohibited. However, CEO’s current direct beneficial ownership (<1% post multiple reverse splits) suggests limited “skin in the game” in absolute share terms, though significant options exist; near-term vesting (e.g., 1/3 of 2024 grants on 2/23/2025; 6-month bonus replacement grant vested 8/27/2024) may modestly increase potential selling pressure upon liquidity events, subject to strike economics .
- Retention/Exit Economics: CIC/change-in-control terms (up to 36 months’ salary plus 4.4% of EV at ≥$50M) create a meaningful cost of leadership turnover and could influence sale negotiations; investors should model potential dilution/cash outflows under strategic scenarios .
- Governance Checks: Independent committees, no tax gross-ups, double-trigger acceleration, and anti-repricing policy are positive; CEO+Chairman dual role is partially mitigated by a strong Lead Director charter .
- Catalyst Risk/Reward: PDUFA outcome for TNX-102 SL is the central trading driver in 2025; success could reset pay-for-performance optics and equity value creation; failure would pressure retention and compensation alignment narratives .
Data sources: Tonix DEF 14A (Mar 31, 2025) and 8-Ks (Feb 4, 2025). Specific citations for each fact are provided inline.
Citations:
- Biographical background, roles, education, patents: ; age and titles: .
- Pay vs performance, TSR, Net Income: .
- Compensation tables and 2024 grants: .
- Vesting schedules (footnotes): .
- Outstanding equity awards summary: .
- Employment agreement terms (salary, severance, CIC, Sale Bonus, definitions): .
- Hedging/pledging prohibition: .
- Board independence, leadership structure, lead director responsibilities: .
- Committees, chairs, meetings, attendance: .
- Director compensation: .
- Beneficial ownership (CEO): .
- Related-party transactions policy and absence: .
- Reverse split and equity plan amendment context: .
- PDUFA and CEO commentary: .