Michael Benkowitz
UNITED THERAPEUTICSAbout Michael Benkowitz
President & Chief Operating Officer of United Therapeutics since 2016; joined the company in 2011. Age 53. Oversees sales, marketing, market access, patient relations, manufacturing, medical affairs, compliance, major administrative functions (HR, IT), business development, and key alliances, indicating broad operational control and execution responsibility . Company performance under his senior leadership in 2024: revenue up 24% vs. 2023; TSR +60%; net income ~$1.2B; EBITDASO margin 56% (industry-leading); cash profit margin 64% achieved vs. 50% target .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| United Therapeutics | EVP, Organizational Development | 2011–2016 | Built organizational capabilities; precursor to COO role |
| United Therapeutics | President & COO | 2016–present | Leads commercial, manufacturing, compliance, and admin functions; drives execution across core revenue levers |
External Roles
- Not disclosed in proxy/SEC filings reviewed (no external board/service roles identified specific to Mr. Benkowitz) .
Fixed Compensation
| Year | Base Salary ($) | % Change YoY | Target Bonus (% of Salary) | All Other Compensation ($) | Notes |
|---|---|---|---|---|---|
| 2024 | 1,200,000 | 6.2% | 85% | 36,128 | Other comp includes 401(k) match $12,200; perquisites (vehicle/allowance, event travel, family travel, physical exam excess) |
Performance Compensation
2024 Annual Cash Incentive Program
| Metric | Weight | Target | Actual 2024 | Credit Earned | Financial Multiplier Contribution | Notes |
|---|---|---|---|---|---|---|
| Cash Profit Margin | 25% | 50% | 64% | 100% | 100% | Above maximum → full milestone + 100% multiplier |
| Revenue | 25% | $2.6B | $2.877B | 100% | 100% | Above maximum → full milestone + 100% multiplier |
| Manufacturing | 25% | Two-year inventory; pass FDA GMP inspections | Achieved | 100% | — | Full milestone achieved |
| R&D | 25% | Points-based (target 25) | 31 points | 100% | — | Full milestone achieved |
| Total Milestone Attainment | — | — | — | 100% | — | |
| Financial Multiplier | — | Target→Stretch→Max | Both metrics at Max | — | 300% total (1+100%+100%) | |
| Payout Result | — | — | — | — | — | Benkowitz 2024 cash bonus earned: $3,060,000 |
Formula: Base Salary × Target % × Milestone Attainment × Financial Multiplier = Bonus. For Benkowitz: $1,200,000 × 85% × 100% × 300% = $3,060,000 .
Long-Term Incentives (Grants Made March 15, 2024; 3-Year Performance, Cliff Vest at 12/31/2026)
| Award Type | Performance Metric | Weight | Target Shares | Max Shares Granted | Grant-Date Fair Value ($) | Strike / Expiration | Vesting |
|---|---|---|---|---|---|---|---|
| PSOs (Performance Stock Options) | 3-Year Avg Cash Profit Margin | 50% | 42,380 | 127,140 | 4,124,422 | $235.78; 3/15/2034 | 0–300% earned; cliff at end of 2026 |
| PSUs – Revenue Growth | Avg YoY Revenue Growth (3 yrs) | 25% | 8,280 | 24,840 | 1,952,258 | N/A | 0–300% earned; cliff at end of 2026 |
| PSUs – R&D Milestones | Defined R&D achievements (3 yrs) | 25% | 8,280 | 24,840 | 1,952,258 | N/A | 0–300% earned; cliff at end of 2026 |
2024 equity grants were delivered at 300% of target shares (maximum performance-vesting opportunity), subject to 0–300% vesting based on outcomes at 12/31/2026 .
Prior-cycle Performance Awards Outstanding (as of 12/31/2024)
| Award | Max Unearned Units | Market Value ($) at $352.84 |
|---|---|---|
| 2023 PSUs – Revenue + R&D (each) | 17,790 + 17,790 | $6,277,024 + $6,277,024 |
| 2024 PSUs – Revenue + R&D (each) | 24,840 + 24,840 | $8,764,546 + $8,764,546 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 579,588 shares (1.3% of outstanding); includes 576,940 currently exercisable options held via trusts where he has sole investment/voting power |
| Stock Ownership Guidelines | President/COO: lesser of 3x salary or 30,000 shares; all NEOs in compliance as of March 2025 |
| Hedging & Pledging | Prohibited for executives & directors (insider trading policy); board policy prohibits pledging |
| 2024 Exercises | 149,700 options exercised; 32,200 STAP exercised; value realized $38,746,665 (options) and $3,130,162 (STAP) |
| Outstanding Performance Options (max) | 99,720 (2023 cycle); 127,140 (2024 cycle); strike $217.50 (2023); $235.78 (2024) |
| RSUs Unvested (max) | 2023: two tranches of 17,790; 2024: two tranches of 24,840; cliff vest subject to performance 12/31/2025 and 12/31/2026 respectively |
Employment Terms
| Provision | Summary |
|---|---|
| Employment Agreement | Effective June 2016; initial 3-year term with annual renewals unless notice; minimum base salary $650,000; 2024 base $1,200,000 |
| Benefits & Perquisites | Choice of company vehicle/lease or $1,300 monthly allowance; annual physical exam coverage beyond insurance; general employee benefits |
| Non-Compete/Non-Solicit | One-year non-compete/non-solicit post-termination; confidentiality obligations for 3 years |
| Severance (without cause) | Lump sum equal to base salary through remainder of agreement term |
| Change-in-Control (double trigger) | Cash severance = 2× base salary + 2× highest of prior-year bonus, bonus payable preceding termination year, or target bonus; 24 months healthcare; 6 months outplacement; stock options/PSUs vest at target if not assumed; SERP acceleration |
| Clawback | Nasdaq 10D-1 compliant; recovers excess incentive comp over prior 3 years upon required restatement |
Potential Payments Upon Termination (as of 12/31/2024)
| Scenario | Salary+Cash Incentive | Equity Acceleration | SERP | Health/Other | Total |
|---|---|---|---|---|---|
| Involuntary w/o cause / Good Reason | $581,918 | — | — | — | $581,918 |
| Disability | — | $19,487,417 | $6,789,316 | — | $26,276,733 |
| Death | — | $19,487,417 | $4,291,637 | — | $23,779,054 |
| Change in Control (with termination) | $6,663,084 | $19,487,417 | $9,271,544 | $77,692 | $35,499,737 |
| Change in Control (without termination) | — | $19,487,417 (if awards not assumed) | $9,271,544 | — | $28,758,961 |
Retirement & Deferred Compensation
- SERP present value: $9,330,590; formula targets up to 100% of final 3-year average base salary less estimated Social Security, prorated by years/15 if <15 yrs; vesting at age 60; change-in-control triggers lump sum acceleration; 12-month non-compete attached to SERP .
Compensation Structure Analysis
- Equity shifted entirely to performance-based PSOs/PSUs with 3-year cliff vest, emphasizing profitability (cash margins), sustained revenue growth, and R&D execution; no time-based grants to NEOs .
- Annual bonus design ties 50% to financial metrics (cash profit margin, revenues) and 50% to operational (manufacturing, R&D), with rigorous thresholds and a 300% financial multiplier only for above-maximum performance on both financial metrics—achieved in 2024 .
- Governance mitigants: clawback policy, no option repricing, no tax gross-ups, hedging/pledging prohibited, one-year minimum vesting with limited exceptions .
Say-on-Pay & Shareholder Feedback
- 2025 Say-on-Pay approval: 38,413,776 For; 1,763,712 Against; 29,225 Abstentions; indicates strong support for current program design .
- Compensation Committee engages shareholders and uses objective peer methodology; peer group includes large biopharma and biotech comparators; UTHR ranks high on profitability/productivity metrics .
Performance & Track Record
- 2024 company results: Revenue +24% YoY; TSR +60%; net income ~$1.2B; cash, equivalents, and marketable investments $4.7B; $1.0B returned via ASR; Tyvaso DPI best-selling product; robust supply chain (two-year inventories) .
- Pipeline progress: Registration-stage trials advanced (TETON series, ADVANCE OUTCOMES, EVLP), FDA IND cleared for UKidney in early 2025; R&D milestone score above target (31 vs. 25) .
- Productivity: ~$2.2M revenue per employee; top-tier EBITDASO margin vs peer group .
Risk Indicators & Red Flags
- Pledging/Hedging prohibited; no repricing of underwater options without shareholder approval; clawback in place; no excise tax gross-ups; strong Say-on-Pay support—collectively low governance red flags .
- Insider exercises in 2024 (149,700 options; 32,200 STAP; $41.9M value realized) could indicate liquidity events; monitor Form 4s for selling pressure and upcoming vest cliffs (2025, 2026) .
Equity Ownership & Alignment Details
| Category | Vested | Unvested/Unearned | Comments |
|---|---|---|---|
| Options (legacy time-based; multiple grants 2017–2019) | Extensive exercisable holdings; 576,940 currently exercisable via trusts | — | Suggests substantial in-the-money optionality already harvested/available |
| Performance Options (2023 & 2024) | — | 99,720 (2023); 127,140 (2024); subject to cash margin goals | Expire 3/15/2033 and 3/15/2034; strike $217.50/$235.78 |
| PSUs (2023 & 2024) | — | 17,790×2 (2023); 24,840×2 (2024) | Based on 3-year revenue growth and R&D achievements |
Compensation Peer Group
- Selection method: top 25 Nasdaq Biotechnology Index companies by revenue; objective criteria; peers adjusted annually for M&A .
- Peer list includes Amgen, Gilead, Vertex, Regeneron, Biogen, BioMarin, Incyte, Jazz, Exelixis, Illumina, Moderna, etc. .
- Relative standing: high rank on operating income, ROIC, ROA, revenue per employee; underscores pay-for-performance linkage .
Investment Implications
- Benkowitz’s incentives directly tied to profitability (cash margin), revenue scale, and R&D milestones over multi-year periods, with meaningful upside only at stretch/max performance—aligns with shareholders seeking durable growth and margin discipline .
- Retention risk appears mitigated: robust double-trigger CIC package (~$35.5M) and significant unearned performance equity vesting through 2026 create strong stay incentives; stock ownership compliance and no pledging reduce misalignment risk .
- Trading signals: large 2024 option/STAP exercises plus substantial unvested PSUs/PSOs imply potential supply near vestings (late-2025/2026); monitor insider Form 4 activity and performance outcomes on cash margin and revenue growth to anticipate vest realizations .
- Operational scope (manufacturing, commercial, compliance) under Benkowitz is central to execution of Tyvaso DPI growth, inventory robustness, and pipeline trial progression—sustained attainment of financial/operational milestones will drive incentive payouts and TSR .