Richard Dugan
Vanda PharmaceuticalsAbout Richard W. Dugan
Richard W. Dugan (age 83) is Lead Independent Director of Vanda Pharmaceuticals and has served on the Board since December 2005. He is a former Partner at Ernst & Young, LLP with senior leadership roles across the Mid-Atlantic and Pittsburgh offices, and is designated an Audit Committee financial expert under Regulation S‑K. He holds a B.S.B.A. from Pennsylvania State University and currently serves as the Board’s Lead Independent Director, presiding over executive sessions of independent directors .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Ernst & Young, LLP | Partner; Mid-Atlantic Area Senior Partner | 1976–2002; Senior Partner 2001–2002 | Senior leadership across audit and advisory; deep financial oversight experience |
| Ernst & Young, LLP | Mid-Atlantic Area Managing Partner | 1989–2001 | Managed regional practice operations and quality |
| Ernst & Young, LLP | Pittsburgh Office Managing Partner | 1979–1989 | Oversaw audit practice and client service |
| Middlebrook Pharmaceuticals, Inc. | Director | n/d | Public biopharma board experience |
| Critical Therapeutics, Inc. | Director | n/d | Public biopharma board experience |
| Xanthus Pharmaceuticals (private) | Director | n/d | Private biopharma board experience |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Public company boards (past 5 years) | None | — | Company discloses no other public boards within past five years |
Board Governance
| Committee | Chair | Members | 2024 Meetings |
|---|---|---|---|
| Audit Committee | Richard W. Dugan | Phaedra S. Chrousos; Anne Sempowski Ward | 10 |
| Compensation Committee | Anne Sempowski Ward | Richard W. Dugan; Tage Honoré | 6 |
| Nominating/Corporate Governance | Phaedra S. Chrousos | Stephen Ray Mitchell; Tage Honoré | 6 |
- Independence: Board determined Dugan is independent under Nasdaq and federal securities law standards; all members of Audit and Compensation Committees meet heightened independence requirements .
- Lead Independent Director: Dugan serves as Lead Independent Director and presides over regular executive sessions of independent directors .
- Attendance: The Board met 15 times in 2024; each director attended ≥75% of Board/committee meetings; all then‑serving directors attended the 2024 annual meeting .
- Audit Committee financial expert: The Board designated Dugan as an audit committee financial expert .
Fixed Compensation
| Year | Fees Earned or Paid in Cash (USD) | Notes |
|---|---|---|
| 2024 | $111,868 | Cash retainers and role-based fees |
| Program Term (Effective June 2024) | Compensation |
|---|---|
| Annual Cash Retainer | $50,000 |
| Lead Independent Director/Chairman (non-employee) | +$30,000 annual retainer |
| Audit Chair | +$25,000 annual retainer |
| Compensation Chair | +$20,000 annual retainer |
| Nominating/Gov Chair | +$15,000 annual retainer |
| Audit Committee Member (non-chair) | +$15,000 annual retainer |
| Compensation Committee Member (non-chair) | +$10,000 annual retainer |
| Nominating/Gov Committee Member (non-chair) | +$7,500 annual retainer |
| Expense Reimbursement | Travel/lodging/other reasonable expenses |
Performance Compensation
| Year | RSU Awards (USD fair value) | Option Awards (USD fair value) | Total (USD) |
|---|---|---|---|
| 2024 | $112,499 | $112,497 | $336,864 |
| Equity Grant | Value/Terms | Vesting | Performance Metrics |
|---|---|---|---|
| Annual Director RSU Grant | $260,000 fixed grant date value | 100% vests one year after grant (continuous service) | None; time-based vesting |
| Initial Director RSU Grant | $390,000 fixed grant date value | Vests in four equal annual installments (continuous service) | None; time-based vesting |
| Change in Control/Death | RSUs not fully vested become fully vested | Accelerated vesting on change in control or upon death | None; structural trigger-based |
Equity program changed in June 2024 from mixed options+RSUs to all RSUs; 2024 disclosed RSU and option values reflect awards granted during the year prior to full policy transition .
Other Directorships & Interlocks
| Category | Detail |
|---|---|
| Current public company boards | None in past five years |
| Prior public boards | Middlebrook Pharmaceuticals, Inc.; Critical Therapeutics, Inc. |
| Private boards | Xanthus Pharmaceuticals |
| Interlocks/conflicts | None disclosed for Dugan |
Expertise & Qualifications
- 25+ years as Ernst & Young Partner with senior leadership roles; deep audit and controls oversight .
- Audit committee financial expert designation; extensive experience on public company boards .
- Education: B.S.B.A., Pennsylvania State University .
Equity Ownership
| Holder | Shares Beneficially Owned | % of Shares Outstanding | Notes |
|---|---|---|---|
| Richard W. Dugan | 294,474 | <1% | Company deems RSUs vesting within 60 days and options exercisable within 60 days as outstanding for the holder; base outstanding shares 58,933,982 |
| Instrument | Outstanding | Vested | Notes |
|---|---|---|---|
| RSUs | 20,529 | 0 (as of 12/31/2024) | No RSU shares vested at year-end |
| Stock Options | 176,245 | 138,667 (as of 12/31/2024) | Exercisable status reflects vesting to date |
- Shares pledged as collateral: Not disclosed.
- Ownership guidelines and compliance: Not disclosed in proxy sections queried.
Governance Assessment
- Strengths: Dugan’s independence, Lead Independent Director role, and audit financial expert status provide meaningful counterbalance to combined CEO/Chair structure; committee leadership (Audit Chair) and regular executive sessions bolster oversight .
- Engagement: Board met 15 times with ≥75% attendance by all directors; Audit, Compensation, and Nominating/Gov committees were active (10/6/6 meetings) .
- Alignment: Director equity now primarily RSUs with time-based vesting; annual RSU grants ($260k) standardize equity exposure and simplify change-in-control treatment; 2024 mix included options ahead of the June 2024 shift .
- RED FLAGS (company-level context): CEO tax indemnity agreement includes excise tax gross-up under Section 4999 (shareholder‑unfriendly in many governance frameworks) ; multiple related‑party employments of CEO’s family with sizable RSU grants—approved with stated independence safeguards but may invite scrutiny from investors focused on nepotism risk . No Dugan-specific related party transactions disclosed.
- Net view: Dugan’s tenure and audit expertise support board effectiveness; the presence of a Lead Independent Director under a combined CEO/Chair structure is a governance mitigant. Attention points for investors include monitoring independence rigor around related‑party reviews and evaluating director equity design for pay‑for‑performance linkage (currently time-based with no financial metrics) .