Reshma Kewalramani
VERTEX PHARMACEUTICALS INC / MAAbout Reshma Kewalramani
Reshma Kewalramani, M.D., is Chief Executive Officer and President of Vertex Pharmaceuticals and a member of the Board since 2020; she is 52 and has served as CEO since April 2020 . Under her leadership, Vertex delivered 2024 net product revenue of $11.02B (+12% YoY; 10th consecutive year of double‑digit growth) and reached an all‑time share price high of $519.88 in 2024; 2024 TSR (value of $100 initial investment) was $183.92 vs. Nasdaq Biotech Index $118.20 . She led approvals/launches of ALYFTREK (CF), CASGEVY (SCD/TDT), and JOURNAVX (acute pain), and R&D advances across kidney disease, diabetes, pain, and more than 10 disease areas; the company surpassed adjusted non‑GAAP EBITDA and net income targets in 2024 . Education: B.A. and M.D. from Boston University; Internal Medicine residency and Nephrology fellowship at MGH/Brigham; Harvard Business School General Management Program alumna .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Vertex Pharmaceuticals | CEO & President | 2020–present | Led commercial diversification (7 marketed products), new approvals (ALYFTREK, CASGEVY, JOURNAVX), and double‑digit revenue growth in 2024 . |
| Vertex Pharmaceuticals | EVP & Chief Medical Officer | 2018–Mar 2020 | Oversaw late development across multiple disease areas and modalities . |
| Vertex Pharmaceuticals | SVP, Late Development | 2017–2018 | Advanced pipeline programs toward pivotal development . |
| Amgen | Roles of increasing responsibility; VP & Head of U.S. Medical Organization | 2004–2017 | Built and led U.S. medical operations; broad therapeutic leadership . |
| FDA (industry representative) | Endocrine & Metabolic Drug Advisory Committee | 2014–2019 | Regulatory advisory experience in endocrine/metabolic therapies . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Ginkgo Bioworks (NYSE: DNA) | Director | 2021–2024 | Board oversight at a public biotech platform company . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 1,396,154 | 1,500,000 | 1,600,000 (increase approved in 2024 review) |
| Target Bonus (% of Salary) | — | — | 150% (raised from 120% for 2024) |
| Actual Annual Bonus ($) | 3,784,500 | 4,050,000 | 4,941,600 (Company factor 142%; Individual factor 145%) |
Notes:
- Vertex reports bonuses under “Non‑Equity Incentive Plan Compensation” (paid in Q1 following performance year) .
Performance Compensation
2025 LTI awards granted for 2024 performance (value-based, split 50/50 PSU/RSU)
| Component | Performance Rating-Based Equity Modifier | Value ($) |
|---|---|---|
| Performance‑based RSUs (PSUs) | 127% | 8,572,500 |
| Time‑based RSUs (RSUs) | 127% | 8,572,500 |
| Total | — | 17,145,000 |
2024 equity grants (granted Feb 7, 2024)
| Award | Grant Date | Target/Earned Shares | Vesting | Grant-Date Fair Value ($) |
|---|---|---|---|---|
| Financial PSU (2024 net product revenue) | 2/7/2024 | Target 10,164; Earned 200% = 20,328 | Earned shares vest in three equal installments in 2025, 2026, 2027 | 4,286,464 |
| Non‑Financial PSU (3‑year R&D/clinical milestones) | 2/7/2024 | Target 10,164 (performance period 2024–2026; payout 0–200%) | Cliff vests after 3 years if earned (expected 2027) | 2,143,232 |
| Time‑based RSU | 2/7/2024 | 20,327 | Vests annually over 3 years; first installment vested Feb 17, 2025; remaining in 2026 & 2027 | 8,572,506 |
Additional realized performance:
- 2022 Non‑Financial PSU (3‑year period set in 2022) achieved 200% payout; earned shares vested Feb 26, 2025 .
Program design highlights:
- Annual LTI split: 50% PSUs (half financial, half 3‑year non‑financial), 50% RSUs; PSU payout range 0–200%; RSUs vest over 3 years .
- Company exceeded 2024 financial targets; financial PSUs paid at maximum (200%); 2022 three‑year non‑financial PSUs also paid at 200% .
- No stock options are currently granted to executives .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 41,813 shares; <1% of outstanding (257,080,844 shares as of 3/17/2025) . |
| Unvested RSUs (as of 12/31/2024) | 9,706 ($3,908,606), 17,982 ($7,241,351), 20,327 ($8,185,683) at $402.70/share . |
| Earned/Unearned PSUs (as of 12/31/2024) | Earned/vesting: 9,706 ($3,908,606), 17,982 ($7,241,351), 29,118 ($11,725,819), 20,328 ($8,186,086); Unearned (max assumption): 26,972 ($10,861,624), 20,328 ($8,186,086) . |
| 2024 Vesting/Exercises | 71,263 shares vested (value realized $30,294,626); 1,565 options exercised (value realized $421,721) . |
| Ownership Guidelines (Executive) | CEO must hold ≥6x base salary; as of 3/17/2025, all NEOs met holding requirements . |
| Hedging/Pledging | Prohibited for directors and employees . |
Interpretation: Material multi‑year vesting from 2024–2027 (RSUs and PSUs) creates scheduled Form 4 activity windows; anti‑hedging/pledging and ownership guidelines support alignment and mitigate pledging risk .
Employment Terms
| Provision | Terms |
|---|---|
| Employment Agreement | CEO eligible for board‑determined compensation and executive benefits; 12‑month non‑compete after termination . |
| Termination (no Change in Control) | Cash: 200% of (base salary + target bonus); prior year bonus if unpaid; pro‑rated current year bonus; equity: partial acceleration of awards that would vest within 12 months; benefits continuation up to 18 months . |
| Termination (Double‑Trigger Change in Control) | Cash: 299% of (base salary + target bonus); pro‑rated bonus; all cash incentives earned if unpaid; equity: full acceleration (target or earned for PSUs); benefits continuation up to 18 months . |
| Potential Payouts (as of 12/31/2024) | No CoC involuntary/good reason: $35.46M total; With CoC double‑trigger: $64.37M total; Death/Disability: $52.37M (includes equity acceleration valued at $402.70/share) . |
| Clawbacks | Dodd‑Frank compliant recoupment for restatements; separate clawback for fraud/intentional misconduct . |
| Career Employment/Retirement Vesting | Company‑wide provision; legacy participants (hired before 1/1/2025) receive partial acceleration per formula; new hires (on/after 1/1/2025) eligible for full acceleration after 10 years’ service (age and transition criteria apply) . |
| Tax Gross‑Ups | No excise tax gross‑up; amounts may be reduced to avoid 4999 excise tax, increasing after‑tax value . |
Board Governance
- Director since 2020; not independent (employee director). Employee directors do not receive director compensation; Dr. Kewalramani receives no board fees .
- Board separation: Chair (Executive Chairman Jeffrey Leiden) and CEO roles are separated; Lead Independent Director (Bruce Sachs) provides independent oversight; board annually reviews optimal leadership structure .
- Committees: All committees comprise independent directors; CEO is not listed as a committee member .
- Attendance: In 2024, the board met 8 times; all incumbent directors attended 100% of board and committee meetings .
- Say‑on‑Pay: 2024 approval ~91%; past five meetings averaged >91% .
- Shareholder proposal (2025): Advisory vote sought to require shareholder approval for severance >2.99x; board recommends against; CEO CoC severance cash multiple is 2.99x with double‑trigger and full equity acceleration .
Performance Compensation – Metric Detail
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| 2024 Net Product Revenue (Financial PSU) | 50% of PSUs (PSUs are 50% of LTI) | $10.465–$10.565B (100%); < $10.315B (0%); > $10.715B (200%) | $10.75B (FX‑adjusted per plan) | 200% | 3 equal installments in 2025, 2026, 2027 |
| 2022 3‑Year Non‑Financial Milestones (PSU) | 50% of PSUs (PSUs are 50% of LTI) | 3 program milestones (CF filings; ≥2 POCs including cell/gene; non‑CF NDA/BLA) | Achieved all 3 | 200% | Cliff vested 2/26/2025 |
Director Compensation (Employee‑Director)
- Employee directors (Executive Chair, CEO) receive no director retainers/fees; Executive Chair receives equity and a $70,000 annual payment to facilitate benefits participation per amended employment agreement; CEO receives no separate board compensation .
Compensation Structure Analysis
-
90% of CEO/NEO pay is performance‑linked (“at‑risk”) via PSUs/RSUs and annual cash incentives .
- Shift to RSUs/PSUs (no new options) lowers risk and emphasizes long‑term performance and retention .
- 2024 raises: CEO target bonus increased to 150% (from 120%); base salary to $1.6M; equity target held at $13.5M; LTI paid 50% PSUs/50% RSUs .
- Strong performance drove maximum financial PSU payout (200%) and maximum payout on 2022 non‑financial PSUs; annual bonus paid at company factor 142% and individual factor 145% for CEO .
- Clawbacks (restatements, misconduct), anti‑hedging/pledging, and stock ownership guidelines (CEO 6x salary) mitigate risk and align interests .
Say‑on‑Pay & Shareholder Feedback
- 2024 Say‑on‑Pay: ~91% approval; continued strong support and ongoing shareholder outreach (engaged ~70% of outstanding shares) .
- 2025 shareholder proposal on “excessive golden parachutes”: Board recommends against; notes NEO cash severance generally ≤1x base+bonus (except CEO 2.99x upon CoC) and double‑trigger equity acceleration only in limited scenarios .
Related Party Transactions
- 2024: One related party transaction disclosed (CFO’s daughter employed; ~$127,000 compensation); no related party transactions involving Dr. Kewalramani disclosed .
Expertise & Qualifications
- Physician‑executive (nephrology subspecialist) with deep clinical development leadership; prior VP Head of U.S. Medical Organization at Amgen; regulatory experience as FDA Advisory Committee industry representative; HBS GMP alumna .
Investment Implications
- Pay‑for‑performance alignment is strong: maximum PSU outcomes tied to exceeding revenue and strategic R&D milestones, with high at‑risk equity mix and robust clawbacks/ownership rules—supportive of long‑term shareholder value creation .
- Retention risk appears contained: outside CoC, partial 12‑month equity acceleration and 200% cash multiple with benefits; under CoC, 2.99x cash and full equity acceleration with double trigger—market‑standard but watch governance optics given shareholder proposal focus on parachutes .
- Insider selling pressure: sizeable 2024 vesting ($30.3M value realized) and multi‑year PSU/RSU schedules through 2027 imply periodic Form 4 activity; however, anti‑hedging/pledging policy and ownership guidelines mitigate misalignment concerns .
- Board structure mitigates dual‑role risk: CEO is not Board Chair; Lead Independent Director and independent committees provide checks/balances; 100% attendance underscores board engagement .
- Execution track record under Kewalramani (approvals/launches, revenue growth, TSR outperformance vs biotech index) supports confidence in pipeline-to-commercial translation; continued diversification (CASGEVY, JOURNAVX, renal programs) is a positive for multi‑asset risk balance .