Martine Rothblatt
UNITED THERAPEUTICSAbout Martine Rothblatt
Founder, Chairperson, and CEO of United Therapeutics since its inception; age 70; director since 1996. Holds a Ph.D. (medical ethics, University of London), J.D., and M.B.A.; previously created SiriusXM and is a co-inventor on ten U.S. patents, with additional patents pending. Board designates a Lead Independent Director and maintains fully independent committees to mitigate dual-role governance risk (CEO + Chair); independent directors met in executive session four times in 2024 with 100% board/committee meeting attendance. 2024 Say‑on‑Pay approval exceeded 94%, and pay program emphasizes “at risk” compensation with 100% performance-based long‑term incentives.
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| United Therapeutics | Founder, Chairperson, and Chief Executive Officer | Since 1996 | Founded the company; long-tenured CEO/Chair providing strategic, scientific, and mission leadership. |
| SiriusXM (satellite radio) | Creator/founder | — | Built the satellite radio company prior to founding United Therapeutics, demonstrating entrepreneurial execution at scale. |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| IP/Thought leadership | Author; co‑inventor on ten U.S. patents | — | Publications and patents on ethics of xenotransplantation and AI provide context for UT’s organ manufacturing and advanced tech initiatives. |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base salary ($) | $1,402,290 | $1,476,379 | $1,512,401 |
| Target annual cash bonus (% of salary) | — | — | 125% (no change vs. 2023) |
| Actual annual cash bonus paid ($) | $3,909,114 | $4,161,000 | $5,625,000 |
| All other compensation ($) | $10,800 | $17,826 | $12,200 |
Notes:
- 2024 base salary set at $1,500,000 effective March 3, 2024 (reflected in pay); compensation structure is salary plus annual cash incentive and performance-based long‑term equity.
Performance Compensation
Annual Cash Incentive Framework (2024)
- Formula: Base Salary × Target Incentive % × Company‑Wide Milestone Attainment × Financial Multiplier (up to 300%). Metrics span financial (cash profits, revenue) and operational (manufacturing, R&D) goals; 2024 attainment 100%, financial multiplier 300%.
| NEO | 2024 Base Salary (A) | Target % (B) | Milestone Attainment (C) | Financial Multiplier (D) | Bonus Earned = A×B×C×D |
|---|---|---|---|---|---|
| Martine Rothblatt | $1,500,000 | 125% | 100% | 300% | $5,625,000 |
R&D milestone detail (illustrative drivers of C): 24 points for six registration-stage trials (e.g., TETON1/2, PPF, ADVANCE OUTCOMES, EVLP transplant study, ARTISAN), 6 points earlier-stage programs (UKidney, UHeart, new delivery), and 1 point for new product candidate (miroliverELAP IND).
Long-Term Incentive (100% performance-based; granted March 2024)
- Structure: 50% performance stock options (PSOs) tied to average cash profit margin (3-year performance 2024–2026); 50% performance stock units (PSUs), split between revenue growth and R&D achievements (3-year performance 2024–2026). Cliff vest at end of performance period if earned; option term 10 years.
| Grant date | Award type | Target shares | Max shares | Performance metric | Performance period | Grant-date fair value (target) |
|---|---|---|---|---|---|---|
| 03/15/2024 | Stock options (PSOs) | 82,410 | 247,230 | Average cash profit margin | 2024–2026 (cliff vest if earned) | $8,020,141 |
| 03/15/2024 | PSUs | 32,210 | 96,630 | Revenue growth (one tranche) | 2024–2026 (cliff vest if earned) | $7,594,474 |
| 03/15/2024 | PSUs | — | — | R&D achievements (separate tranche) | 2024–2026 (cliff vest if earned) | Included above |
Program design notes:
- 2024 CEO target total direct compensation: $17.375M (Base $1.5M, Target Bonus 125% of base, LTI target $14.0M; 80.6% of CEO target is LTI).
- No additional NEO equity awards in 2022; shift to 100% performance-based equity since 2017; continued shareholder‑responsive design changes.
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 3,193,762 shares (6.7% of outstanding) as of April 14, 2025. |
| Current exercisable options (direct) | 795,919 shares. |
| Current exercisable options (Options Trust) | 1,731,421 shares held by a trust for which Dr. Rothblatt is Investment Direction Adviser with sole investment/voting power; 3‑year trust term from March 31, 2023 (Bessemer Trust as trustee). |
| Other indirect holdings | Multiple trusts and charitable organizations; see proxy footnote details (e.g., 468,515 shares in shared-power trusts). |
| Insider transactions (2024) | Exercised 723,869 options, realizing $97,415,863; activity largely related to options nearing expiration. |
| Hedging/pledging | Prohibited for directors and executive officers under company policy. |
| Stock ownership guidelines (CEO) | Lesser of 6× base salary or 100,000 shares; all NEOs in compliance as of March 2025. |
Employment Terms
| Term | Key provisions |
|---|---|
| Employment agreement | Amended and Restated Executive Employment Agreement (initial 5‑year term; automatically extended 1 year annually unless either party gives ≥6 months’ notice; “rolling 5‑year” has no bearing on severance multiple calculations). |
| Compensation minima | Minimum base salary $180,000; 2024 salary set at $1,500,000; eligible for annual cash and LTI; automobile lease/maintenance/insurance provided. |
| Non‑compete/confidentiality | Prohibits competition for 5 years after last compensation payment; permanent confidentiality obligation. |
| Clawback | Nasdaq 5608‑compliant policy adopted July 2023 for recovery of excess incentive-based compensation after an accounting restatement (3‑year lookback). |
| Severance (without cause/Good Reason or resignation as Senior Advisor) | Lump‑sum of 3× base salary + 3× annual cash incentive (greater of prior year or average prior two years); pro‑rated current‑year bonus; 36 months benefits; 12 months outplacement; transfer of one company vehicle; immediate vesting of unvested PSOs/PSUs (performance-based awards vest at target). |
| Change in control (CIC) + termination | Same as above, with immediate SERP payment per plan terms. |
| CIC without termination | Immediate vesting of unvested equity if not assumed; SERP acceleration. |
| SERP (Supplemental Executive Retirement Plan) | Defined benefit; present value of accumulated benefit $14,420,997 at 12/31/2024; generally provides up to 100% of final 3‑year average gross salary less estimated Social Security, with vesting and payout rules by age/service and CIC. |
Potential payments illustration (as of 12/31/2024 event timing):
| Scenario | Salary + cash incentive | Equity vesting acceleration | SERP | Health/other | Total |
|---|---|---|---|---|---|
| Involuntary w/o cause / Good Reason / Senior Advisor | $21,144,000 | $39,105,037 | $14,420,997 | $154,967 | $74,825,001 |
| Disability | $1,500,000 | $39,105,037 | $14,420,997 | — | $55,026,034 |
| Death | $1,500,000 | $39,105,037 | $9,983,160 | — | $50,588,197 |
| CIC + termination | $21,144,000 | $39,105,037 | $14,420,997 | $154,967 | $74,825,001 |
| CIC without termination | — | $39,105,037 | $14,420,997 | — | $53,526,034 |
Governance and compensation practices:
- No excise tax gross‑ups; no option repricing/backdating; independent compensation consultant; hedging/pledging prohibited.
Board Governance (Service history, committees, independence)
- Role: Founder, Chairperson, and CEO; not independent due to management role. Board is >91% independent with fully independent Audit, Compensation, and Nominating & Governance Committees; Lead Independent Director (Christopher Patusky) sets agendas and leads executive sessions. Board and committees held 5 and 14 meetings respectively in 2024 with 100% attendance; independent directors held four executive sessions. Dr. Rothblatt does not serve on board committees.
Performance & Track Record (select metrics from Pay vs Performance)
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Revenue ($ in millions) | $1,483.3 | $1,685.5 | $1,936.3 | $2,327.5 | $2,877.4 |
| Net income ($ in millions) | $514.8 | $475.8 | $727.3 | $984.8 | $1,195.1 |
| Value of $100 investment (TSR) | $172.33 | $245.32 | $315.72 | $249.65 | $400.59 |
| Peer group value of $100 | $110.52 | $137.47 | $153.08 | $159.01 | $172.62 |
Say‑on‑Pay & Shareholder Feedback
- 2024 Say‑on‑Pay approval exceeded 94%; the company highlights a history of engagement and responsive program changes, including elimination of CEO excise tax gross‑up and shift to 100% performance-based equity.
Compensation Committee & Peer Framework
- Compensation Committee (Chair: Christopher Patusky; members: Raymond Dwek, Nilda Mesa, Louis Sullivan) uses an independent compensation consultant; oversees clawback and SERP; fully independent per Nasdaq standards.
Compensation Structure Analysis
- Elevated at‑risk mix: 80.6% of CEO target 2024 TDC in LTI; LTI is 100% performance‑based (PSOs/PSUs) with multi‑year metrics, aligning with sustained value creation.
- Annual bonus lever: 300% financial multiplier underscores significant upside tied to financial outperformance; 2024 paid at maximum financial factor with 100% milestone attainment.
- Shareholder‑aligned reforms: Removal of excise tax gross‑up and historic CEO TDC reductions toward ~50% of peer median (company disclosure) reflect responsiveness to investor feedback.
- Risk controls: No repricing/backdating; hedging/pledging prohibition; clawback for restatements.
Risk Indicators & Red Flags
- Dual role (CEO + Chair) mitigated by Lead Independent Director and independent committees.
- Large option exercises in 2024 ($97.4M value realized) largely driven by expiring options; watch for 10b5‑1‑plan activity in future Form 4s for selling pressure cadence.
- Pledging prohibited; no excise tax gross‑ups; no option repricing without shareholder approval; strong attendance and governance disclosure reduce governance risk.
Investment Implications
- Strong alignment: Heavy performance‑based equity, explicit multi‑year metrics (cash profit margin, revenue growth, R&D achievements), and robust ownership (6.7%) support pay‑for‑performance and long‑term alignment.
- Retention secured: Evergreen 5‑year contract, substantial CIC/severance protections, and SERP value ($14.4M) reduce near‑term retention risk but raise potential transaction costs in a strategic event (CIC total payout model ~$74.8M as of 12/31/24 scenario).
- Execution track record: Revenue and net income growth through 2024 with enhanced TSR vs. peer group; 2024 cash bonus at max financial multiplier signals internal outperformance against financial goals.
- Trading dynamics: 2024 option exercises were tied to expirations; continued monitoring of Section 16 filings advised to gauge future supply from exercises/settlements as 2023–2026 performance awards approach vesting.